April 1st came and went with no good news regarding Customary and Reasonable fees and what the AMCs are doing to the appraisal industry in whole. I believe it was little more than a coincidence that it was also April Fools Day.
May 21st came and went without the world coming to an end. I also find this a little more than a coincidence that the Consumer Finance Protection Bureau will be taking over rule-making and enforcement in regards to Dodd-Frank Customary and Reasonable fee provisions.
Either way I am excited!
I know a lot of the Appraiser Coalitions as well as the AGA will be contacting them immediately, if they have not already set up meetings and sessions regarding the AMCs role in destroying an entire profession.
The Dodd-Frank provision requires that appraisers be paid a “customary and reasonable fees” and new federal interim guidance concerning lender compliance with the new rules.
The appraiser fee and independence provisions contained in Dodd-Frank were designed to address concerns that lenders were using less expensive appraisal management companies (“AMCs”) hired or owned by lenders at the expense of independent, high-quality appraisals. As a result, AMCs may be a regulatory target of the CFPB after the Bureau’s July 21, 2011 transfer date.
The Bureau will assume rule-making and enforcement authority for Dodd Frank’s appraisal fee provisions after July 21st. Notably, the CFPB will be enforcing Dodd-Frank’s penalties for lenders violating appraiser independence standards which are currently $10,000 a day for the first violation and $20,000 a day for each additional violation.
I hope we see some rule-making in terms of customary and reasonable fees, but I have a feeling it is going to be many years until there is a positive outcome if this is the only steps we take.
Please get involved with your local coalitions and find out what they are doing to improve our appraisal industry.
You can find a list of Appraiser Coalitions on my Website.