Wow! It is amazing. It looks like all the work banding together as an industry has worked. All the appraisal orders I received today were in the $300-$400 range! Dodd-Frank really came through on this one.
The federal government must have really put the scare in to the appraisal management companies and laid down the law.
The Appraisal Subcommittee even gave me a call back and sent out a few reply emails concerning my questions that were previously left unanswered prior to today, 04/01.
I guess I shouldn’t have been so opinionated regarding comments like ‘I won’t hold my breath’ and ‘business as usual’, etc…
Things really can be different, things really can change.
And on all days, it happened on 04/01. Wow! Amazing. I can’t wait to see what next week brings.
On a more serious note…. I got permission to reprint this article from WorkingRE.com
Below is an article I received from WorkingRE.com on the subject of Customary & Reasonable Fees. I have contacted the ASC, my local appraiser coalition and some other well informed appraisers about what we should do if your don’t have the same experience as I noted above.
I am currently looking from a definitive answer to questions regarding Dodd-Frank and if it completely unenforceable, a waste of time regarding ‘customary and reasonable fees’, and if we are going to need a law degree to get anywhere on this issue.
At this time I have no answers for you, but I will soon! Make sure to sign up to my Appraiser Marketing System for future updates. I will also be adding a ton of new ‘Busy Appraiser Podcasts‘ to Itunes today, so you can download them there or find them under Podcasts on my website.
Happy April Fools Day! But make sure to read the article below from David.
Challenging Low Fees
By David Brauner, Editor
As the April 1 implementation date of Dodd-Frank looms, attorneys at the Federal Reserve direct appraisers to a method for challenging low fees (see last issue: Customary Fees: Good, Bad and Uncertain). Here’s where to find the information.
According to Federal Reserve Board attorneys, Section 312(c) of Dodd-Frank (reprinted below), lays out which agencies regulate which types of transactions- this is the “where” to properly file complaints. It revises section 3 of the Federal Deposit Insurance Act.
Section 1100 (A)(8) of Dodd-Frank (below) sheds light on the authority under which provisions of the Act are enforced. This Section revises the enforcement provisions of the Truth in Lending Act (with cross references the FDI Act), according to a Board spokesperson.
With implementation of Dodd-Frank only a few days away a new chapter begins. A Federal Reserve Board attorney told WRE in a recent interview that according to the Interim Final Rule (IFR) recent market fees do not necessarily meet the first presumption of compliance (customary). The Board attorney said, “Someone can rebut the presumption(s) of compliance with evidence that a fee is not reasonable or customary for a reason other than a condition addressed in a presumption of compliance. What evidence supports an allegation depends on the facts and circumstances of a particular case. The rule addresses compensation paid in a particular geographic market.’” (Read the article here: Fed Board Update: Customary and Reasonable Fees.)
The language addressing how and where to rebut low fees is reprinted below. In an interview at the release of the IFR, a Board attorney also pointed to the following language from the IFR, which she seemed to interpret as also reinforcing the notion that recent fees do not necessarily meet the “customary” test under the first presumption: “[T]he Board understands that some AMCs have begun requiring fee appraisers to agree that the fee is ‘customary and reasonable’ as a condition of obtaining the appraisal assignment. In these situations, the Board believes that an appraiser’s agreement that a fee is ‘customary and reasonable’ is an unreliable measure of whether the fee in fact meets the statutory standard.”
Appraisers are reporting, with greater regularity now as we move nearer to the Dodd-Frank implementation date, receiving inquiries from AMCs as to what their “customary and reasonable fees” will be come April 1. Many appraisers are tapping into the Working RE/OREP.org survey results for data. The penalties for noncompliance are stiff: $10,000 for each day any such violation continues and $20,000 civil penalties for subsequent violations. For many appraisers, of course, a return to customary and reasonable fees means staying in business.
WorkingRE.com is published by OREP.org, providing low-cost E&O insurance for appraisers, agents/brokers and other real estate professionals.