The Federal Trade Commission announced Jan. 10 that it will hear oral arguments next month on motions filed by the FTC and the Louisiana Real Estate Appraisers Board. The LREAB in November filed a motion to dismiss the complaint filed against it by the FTC, while the FTC filed motions for partial summary judgment and for opposition to the LREAB’s motion to dismiss.
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Editor’s Note: Following this article’s publication, the Louisiana Real Estate Appraisers Board issued a new statement regarding the stipulation and order it entered into with Coester Appraisal Management Group.
The Louisiana Real Estate Appraisers Board has fined an appraisal management company $5,000 for failing to pay “customary and reasonable” fees to appraisers.
It marks the first time a state has taken action against an AMC under a provision of the Dodd-Frank Act.
Coester Appraisal Management of Rockville, Md., was ordered Thursday by the Louisiana appraisal board to use a third-party appraisal fee schedule compiled by the Southeastern Louisiana University Business Center in Hammond, La.
The company also must submit detailed quarterly activity reports to the state appraisal board for a year and forfeit all rights of appeal, said Bruce Unangst, the board’s executive director.
A provision of Dodd-Frank requires that mortgage lenders pay appraisers “customary and reasonable” fees.
But appraisers have long complained that AMCs take a cut of their appraisal fees, in violation of the law.
Unangst said the Louisiana board intends “to continue to move aggressively in providing a level playing field for all industry participants.”
The Dodd-Frank appraisal standards were created to address the fee compression that is said to have resulted from the Home Valuation Code of Conduct, which took effect in 2009 and barred loan officers and brokers from selecting appraisers. Many blame the HVCC — which sought to prevent commissioned sales representatives from bullying appraisers into inflating valuations — for driving business to appraisal management companies that act as middlemen. Traditionally, AMCs took a cut of the fees for the appraisals they arranged.
http://www.nationalmortgagenews.com/news/compliance/louisiana-fines-appraisal-firm-for-not-paying-reasonable-fees-1052745-1.html
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The regulation was aimed at boosting housing market protection by making sure mortgage companies and banks wouldn’t receive faulty financial advice from cheap appraisers.
But Habitat for Humanity — which relies on appraisers who volunteer their services for free — says it’s created a regulatory headache for their more than 1,400 U.S. affiliates who fear they’re bucking Dodd-Frank in accepting free appraisal services.
“Dodd-Frank reforms were passed with the good intentions of protecting consumers and taxpayers and of stopping predatory lending that targeted lower-income families and contributed to the foreclosure crisis,” said Christopher Ptomey, Habitat for Humanity International’s director of government relations.
“However, provisions in the law … created unintended consequences for Habitat for Humanity.”
The Consumer Financial Protection Bureau (CFPB) officials signaled to Habitat that they’re exempt from the regulation, but the group isn’t taking any chances.
Senate Banking Committee Chairman Richard Shelby (R-Ala.) included a provision in his financial overhaul bill that would exempt Habitat from the regulation. Sen. Rob Portman (R-Ohio) reintroduced legislation earlier this month aimed at addressing the same issue.
“Common sense,” was how Shelby put it. “[It’s] one of the many ways that this legislation helps consumers and rightly addresses the unintended consequences of Dodd-Frank.”
Even Sen. Sherrod Brown (D-Ohio) said the issue “merits further discussion.”
But Brown criticized Shelby for including such a provision in his overhaul, which progressives like Brown oppose for other reasons.
“It shouldn’t be included in a sweeping package of Wall Street reform rollbacks that would threaten safety, soundness and consumer protection,” Brown said. “Opening the door to risky, high-cost mortgages seems to counter Habitat’s mission.”
Habitat’s Ptomey, however, said the group “greatly appreciates Sen. Shelby’s efforts to include protection for donated appraisals.”
CFPB officials declined comment for this story but provided a 2014 letter that CFPB assistant director for regulations Kelly Thompson Cochran sent to Habitat officials.
The letter seemingly indicates that appraisers who volunteer their services are not in violation of Dodd-Frank regulations.
“When a state-licensed or certified appraiser voluntarily chooses to donate appraisal services for a consumer credit transaction and to perform an appraisal without receiving a fee,” Chochran wrote in the 2014 letter, “we do not believe the appraiser is acting [in the same intent as the regulation].”
Still, the regulatory confusion has drawn criticism from the housing industry.
“The fact that the Consumer Financial Protection Bureau has been unwilling to clarify issues such as this is troubling,” the Appraisal Institute, which represents real estate appraisers, wrote in a comment letter to Shelby and Brown on the issue.
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repost from: http://www.bloombergview.com/articles/2014-07-20/dodd-frank-s-four-years-of-doing-nothing
Four years after President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, polling suggests that most Americans think it hasn’t done enough to protect them from a repeat of the 2008 financial crisis, a disaster from which the global economy has yet to fully recover.
Unfortunately, they’re right. …continue reading the rest of this post: In 4 years Dodd-Frank has yet to create a fail safe system
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Fellow Professional Appraiser,
I am asking you to take a moment from your busy day to PARTICIPATE in an important industry effort.
That issue is referred to within Title XIV of the Dodd-Frank legislation as “Customary and Reasonable Fees”:
http://appraisalbuzz.com/online-petition-to-make-a-difference-in-customary-and-reasonable-appraisal-fees
CUSTOMARY AND REASONABLE FEE
In General – Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies.
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PCV was one of the first appraisal management companies I worked for when the HVCC was passed. Not only were they one of the great companies that saved me from bankruptcy, but they had great fees and were easy to work with.
Boy have times changed!!!!
Over the last few years, the company once known for being fair and loyal to appraisers quickly has become one of the most hated appraisal management companies around. First it was the gradual lowering of fees, then came the excessive review department. Honestly their reviewers had to have been paid to find an error on every single file, regardless of how silly the request was. Every single file, to explain an adjustment that was already explained, etc… More detail or explanation when not needed. I assume since there were no other error standing out on the appraisals I sent in, that the requests just became more and more silly. It was horrible, and I was not the only one to refuse work from them.
Occasionally I still get requests from them though. I am shocked at how low their fees are these days. They are one of the major reasons why appraisers are still not getting customary and reasonable fees.
They work on an appraisers fear. If you do not accept their low fees or try to get more money, they won’t send you offers anymore. If that is one of your primary clients, you become worried about making ends meet and paying the bills. What are you to do?
SIGN UP TO BETTER AMCs! GET MORE ESTATE WORK!
LEARN HOW TO MARKET YOUR BUSINESS AGAIN – local search marketing, relationship management, mailers, door to door, website, local directory listings, print advertising
Do whatever it takes, but please, for the good of the group
REFUSE ALL NOT CUSTOMARY AND REASONABLE WORK
This is the only way our industry will improve. This is the only way to put these losers like PCV Murcor out of business.
Want to know the worst thing about PCV Murcor? From their website they have been practicing ‘appraiser independence’ since 1981. The company was founded by an appraiser, and is still owned by an Appraiser who holds a MAI designation.
Wow, what an A hole. That appraiser should get the biggest A hole appraiser of the century award. Helping to destroy our profession. Who is he/she? I really want to know. Is the owner / current owner Keith Murray? That is the information I found on their about page.
What a complete looser and one of those bottom feeding appraisers that is against the fellow appraiser, not looking to help each other out one bit.
http://www.pcvmurcor.com/about_30yrs.html
How about letting them know. Either do it anonymously or with your contact information like I did. Make sure you fill out every field and mark ‘sales’ checkbox or something, otherwise it won’t submit properly:
http://www.pcvmurcor.com/Contact_Us.aspx
Name: Customer Service
Email: customerservice@pcvmurcor.com
Phone (909)623-4001
Amazed…. Owned and operated by an Appraiser. What a real jerk.
So do everything you can to help make this industry better. There are a TON of great AMCs out there. There is so much estate work around that you should be more than busy.
If you have any feedback, please leave it here and I will get back to you. If you know of any other bottom feeder AMCs that people should completely refuse work from, please list them here as well.
Now is the time to take back our profession. There is way more work than appraisers these days. We must demand customary and reasonable.
Bryan Knowlton
http://www.appraisersclub.com
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SCOTTSDALE, Ariz., May 15, 2012 /PRNewswire-USNewswire/ — The American Guild of Appraisers (AGA) today announced that the Coalition of Arizona Appraisers (CoAA) has voted to affiliate their organization with the American Guild of Appraisers.
In a meeting held in Scottsdale, Arizona on May 8, 2012, a quorum of the Coalition of Arizona Appraisers met with leaders from the AGA and Office and Professional Employees International Union (OPEIU) and finalized the affiliation. “The issues that face us as individual appraisers today reach far beyond our individual states; to think anything less would be naive,” said John Dingeman, vice president of CoAA.
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This past February, the American Society of Appraisers and the National Association of Independent Fee Appraisers (NAIFA) contacted the Consumer Financial Protection Bureau to explain the importance of itemizing the separate fees collected in the appraisal process for the prototype Good Faith Estimate (GFE) and settlement forms.
The CFPB continues to test different variations of the forms, the ASA and NAIFA sent another letter to reiterate the importance of separating the AMC fees from what is paid to the appraiser.
read the letter here:
March 30: Read the NAIFA and ASA Follow-Up Letter to CFPB Re: Disclosure of AMC Fee on Revised GFE/Settlement Form
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Implementing the Dodd-Frank Act: The Federal Reserve Board’s Role
The Federal Reserve Board is responsible for implementing numerous provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act” or “DFA”), sometimes in conjunction with other government agencies. Listed below are the implementation initiatives recently completed by the Board, as well as several of the most significant initiatives that the Board expects to address over the next few months. Timeframes for upcoming initiatives are estimates and may be adjusted.
Initiatives Completed
Initiatives Planned: January to March 2012
Initiatives Planned: April to June 2012
Dodd-Frank Act: Statutory Dates For Actions
Initiatives Planned: April to June 2012
“Financial Company” Definition
The Board expects to request comment on a re-proposed rule to establish the standards for determining when a company is predominantly engaged in financial activities and qualifies as a “financial company.” (DFA Section 102(a)(6))
Real Estate Appraisal Requirements
The Board, along with other Federal regulatory agencies, expects to: (1) request comment on a proposed rule to implement appraisal requirements for higher-risk mortgages, and (2) issue final rules restricting acts and practices to ensure appraisal independence and to require reasonable and customary fees for independent appraisals. (DFA Sections 1471, 1472)
Real Estate Appraisal Management Company Registration and Reporting
The Board, along with other Federal regulatory agencies, expects to request comment on a proposed rule to establish minimum requirements for registration and reporting of appraisal management companies. (DFA Section 1473)
Residential Mortgage Appraisal Portability
The Board, along with other Federal regulatory agencies, expects to request comment on a proposed rule on residential mortgage appraisal portability requirements. (DFA Section 1472)
Real Estate Appraisal Automated Valuation Models
The Board, along with other Federal regulatory agencies, expects to request comment on a proposed rule to implement quality controls for real estate appraisal automated valuation models. (DFA Section 1473)
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On Capitol Hill, the American Guild of Appraisers (AGA) is petitioning the Federal Reserve Board and the Consumer Financial Protection Bureau to overturn a recently adopted rule that stands in opposition to regulations contained in the Dodd-Frank Act.
The AGA wrote the organization’s plea based on the assertion that the Fed’s new rule poses a threat to “the viability of professional appraisal practice and undermines the legitimacy of real estate appraisals.”
The legislation in question was put in place last year by the Fed, and the regulation allows appraisal management companies (AMCs) to cut fees for appraisers. In its petition, the AGA stated that AMCs control up to 80 percent of the appraisal market and that, by allowing such companies to pay appraisers only a fraction of customary and reasonable fees, the law makes it possible for AMCs to offer fees that are nearly 50 percent below prevailing appraisal rates.
…continue reading the rest of this post: AGA Petitions Federal Reserve, CFPB
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