Customary and reasonable fees - 90 days

[Ann O'Rourke]

The big issue is how the regulators will set the fees. Plus, what fees will be set? Drivebys, desktop appraisals, high end homes, etc.

Here is a quote below from yesterday's email sent by me to 14,000 appraisers. Looks like some appraisers posting here didn't receive the email or understand the 90 day period to set regulations. It can't be enforced now. If you want to check it out yourself, read that section of the act, including implementation.
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Reasonable and customary fees

Here’s what is in the new law:
"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."

My comments
No one has any idea what will happen. Implementation is scheduled within 90 days. I spoke today with Bob Clark of the California Office of Real Estate Appraisers about enforcement. He is waiting to find out what is happening also. We’re all waiting for something to happen.

There may be some changes already. This week I received a relocation appraisal order that said “We do not dictate fees however we ask that you charge what is typical and customary for the scope of work within your area.”

Ann O'Rourke

 

[CANative]

So who is going to pick up the AMCs fee?

 

[moh malekpour]

High Ann,
This section of the law appears to be for certain type of appraisals.

Property appraisal requirements
‘‘(a) IN GENERAL.—A creditor may not extend credit in the form
of a higher-risk mortgage to any consumer without first obtaining
a written appraisal of the property to be mortgaged prepared in accordance
with the requirements of this section.
‘‘(b) APPRAISAL REQUIREMENTS.—
‘‘(1) PHYSICAL PROPERTY VISIT.—Subject to the rules prescribed
under paragraph (4), an appraisal of property to be secured
by a higher-risk mortgage does not meet the requirement
of this section unless it is performed by a certified or licensed
appraiser who conducts a physical property visit of the interior
of the mortgaged property.

What does physical property visit mean to you? to me, it means interior/exterior inspection. If that is what it means, then driveby and desktop are not allowed for high risk loans.
The law has indicated the sources for establishment of customary and reasonable appraisal fees for each particular area and AMCs are not one of the sources. I don't think it is too difficult to establish the set fee based on those sources.

) EXCEPTION FOR COMPLEX ASSIGNMENTS.—In the case of
an appraisal involving a complex assignment, the customary
and reasonable fee may reflect the increased time, difficulty,
and scope of the work required for such an appraisal and include
an amount over and above the customary and reasonable
fee for non-complex assignments.

This is the exception for high end homes

 

[rijman]

The big issue is how the regulators will set the fees. Plus, what fees will be set? Drivebys, desktop appraisals, high end homes, etc.

I agree, it won't be easy for nationwide companies to determine customary and reasonable fees for every appraisal order in every market. I am aware of the A La Mode fee study although it included only standard URAR fees the last time I saw it.

Thanks for the update.

 

[AnonApprsr]

“We do not dictate fees however we ask that you charge what is typical and customary for the scope of work within your area.”

This. This is the way to be done. Pulte does it this way as well.

 

[chicago guy]

I saw it in another thread, but wouldn't reasonable and customary fees be whatever RESPA forms have shown on appraisal line over the last few years. In theory this seems the most logical way to determine what is reasonable and customary. In practice, how would one track these fees and how far back would they go? Do these fees then become permanent?

 

[AnonApprsr]

The only definition of Reasonable and Customary should really come from this forum. We should be the voice for all appraisers. I'd trust the group that makes us, more than any other to make these decisions.

 

[tr05]

I agree, it won't be easy for nationwide companies to determine customary and reasonable fees for every appraisal order in every market. I am aware of the A La Mode fee study although it included only standard URAR fees the last time I saw it.

Thanks for the update.

A La Mode=Mercury Network=AMC

Their study cannot be used to determine reasonable and customary.

 

[NC Appraising]

The "reasonable and customary fees" should come from post HVCC. Anything after the HVCC is considered to be bad data for very obvious reasons.



Also, if you have a website, please put your fees on there.

This way it does not matter who searches, all will get the same results, and the AMC's can't say that "Alamode" screwed with results, etc.

 

[Kevin A. Spellman]

Ann it is great to see your name here. You are a wonderful speaker, enjoyed your seminar when you were here in the Boston area a few years ago.

There should be a regulation that only one appraisal-fee can be imposed to an applicant. This could keep the ordering to the most qualified, geographically competent service provider and not to a low-ball service provider that can put the applicant at risk to pay for a field-review and or a second appraisal.