CFPB addressing ‘junk fees’ -> need to separate Appraisal and [AMC] Management Fees!

[NJAPRAZE]

Consumer Financial Protection Bureau (CFPB) has extended the deadline for the public to share input and stories on their experiences with junk fees. The CFPB said it hopes to hear from more stakeholders–including consumers and small business owners–from across the financial marketplace about their experiences with fees associated with financial products and services, including mortgage application fees and closing costs like title insurance.

In the best interest of the public --- full disclosure of appraisal fees is necessary! What is often reported to consumers as "the appraisal cost" is often actually TWO SEPARATE FEES (i.e. the actual Appraisal Fee and the lender's management fee or what the lender may withhold as their own charge/fee cut); most AMCs DO NOT disclose their management charge and, as we know too well, these same companies are incentivized to maximum their own profit [via obtaining the highest spread between what they can "bill" lenders, etc for the "appraisal" and what they actually pay to their appraisal subcontractors who actually produce the reports!].

Other possible suggestions: use VA schedule to set minimum appraisal costs for FNMA lending?

Voice your opinion today... provide feedback to the CFPB; see link below:

https://www.federalregister.gov/documents/2022/02/02/2022-02071/request-for-information-regarding-fees-imposed-by-providers-of-consumer-financial-products-or#open-comment

Share with everyone you know -- let's start a movement!

 

[DWiley]

most AMCs DO NOT disclose their management charge

The issue is not the AMC disclosure. AMCs do disclose (to the lender) the fee paid to the appraiser and the total fee. When I worked at a large AMC every lender we worked with required that. But, it is the lender, not the AMC, the prepares the disclosures on the closing docs. An AMC cannot control how a lender discloses.

 

[NJAPRAZE]

The issue is not the AMC disclosure. AMCs do disclose (to the lender) the fee paid to the appraiser and the total fee. When I worked at a large AMC every lender we worked with required that. But, it is the lender, not the AMC, the prepares the disclosures on the closing docs. An AMC cannot control how a lender discloses.

which is the point -- settlement sheet / consumer disclosures; consumers don't know what they're paying for... what is appraisal fee? what is mgmt fee? shouldn't be kumped together and appear segregated/itemized

 

[Dublin ohio]

Here we go again. Borrowers do not give a rats patoot about AMC fees. They just look at the bottom line on the closing statement. How much would the difference be between AMCs. $50-$100. Do you really think that the borrower is going to "shop" AMC fees

 

[DWiley]

which is the point -- settlement sheet / consumer disclosures; consumers don't know what they're paying for... what is appraisal fee? what is mgmt fee? shouldn't be kumped together and appear segregated/itemized

I understand the point you are trying to make. My point was that your post places the blame for the consumer not knowing the breakdown on the AMC. It is not the AMC who creates the closing docs. Contrary to your assertion, AMCs do disclose the separation already. But, that generally doe snot find its way onto the closing docs - which the AMCs do not prepare.

 

[Dublin ohio]

AMCs do disclose the separation already. But, that generally doe snot find its way onto the closing docs

I have a couple of AMCs that require I disclose their fee.

 

[Meandering]

what is appraisal fee? what is mgmt fee?

Management fee????


You mean those racially biased appraisals are being "managed" and it's still happening????

Sounds like an opportunity for a bigger, better lawsuit by the "victims".


Yeah require disclosure of the "management" fee and what exactly they are being paid for.

 

[Zoe]

Two benefits. 1)More transparency to borrower and other parties that see TIL disclosures. 2) It will create more competition between AMC's

 

[NJAPRAZE]

Two benefits. 1)More transparency to borrower and other parties that see TIL disclosures. 2) It will create more competition between AMC's

competition - based on the actual service THEY provide versus incentivizing what they can squeeze from the appraiser

 

[NJAPRAZE]

Here we go again. Borrowers do not give a rats patoot about AMC fees. They just look at the bottom line on the closing statement. How much would the difference be between AMCs. $50-$100. Do you really think that the borrower is going to "shop" AMC fees

absolutely agree; borrowers won't want to absorb another of the lender's costs to do business (i.e. AMC mgmt), which are often negotiable