Customary and reasonable fees - 90 days

[Mile High Trout]

as of 09/03/2010 - This thread has 400 posts & 12,251 views.

Just for the record...

 

[Sulago]

I recently contacted an AMC regarding C&R fees and what their position was. I was told that the appraisers set their own fees, but must remain competive. I think this means that the AMC does not understand the meaning behind C&R, or isn't worried about the fines.

 

[prasercat]

I recently contacted an AMC regarding C&R fees and what their position was. I was told that the appraisers set their own fees, but must remain competive. I think this means that the AMC does not understand the meaning behind C&R, or isn't worried about the fines.

Just tell them next time that appraisers cannot be in a competitive market with a few banks that represent 80% of the lending business. Therefore, just as the "too big to fail" issue has affected many serious financial issues, it has also caused a non-competitive market place for appraiser fees with respect to lending business. That is the point of C&R fees, which represent fees associated with an actual competitive market outside of the lending sector. I don't think many of the frontline people understand the POINT and have to be educated in the face of their own corporate propaganda.

 

[Michigan CG]

I recently contacted an AMC regarding C&R fees and what their position was. I was told that the appraisers set their own fees, but must remain competive. I think this means that the AMC does not understand the meaning behind C&R, or isn't worried about the fines.

If the fees were competitive then more Certified General appraisers would work for AMCs. As a Certified General appraiser I find the fees to be insulting, not reasonable nor competitive. Therefore I do not work for these companies because of the the fees.

 

[Meandering]

Guys,

You miss the point.

No where, in any rule, or policy is an AMC allowed to negotiate your fees. By law they can only collect them and pass them on.

Fee spliting is illegal in accordance with RESPA.

AMCs must charge a C&R fee for their services, their C&R fee is NOT the difference between what the borrower paid and the AMC paid the appraiser.


On about January 21 2011 there will be a federal hotline to report these issues, oh and monitored enforcement. They will have to act.


.

 

[WorkingTogether]

Green Hornet, I can accept your sarcasm and degradating reaction: I believe the approach you are using is exactly the same approach that the current U.S. president takes whenever they feel that a good offense is to slander the other side. Congratulations! When will you be announcing that you are seeking public office in your state?

 

[Non Sequitur]

Guys,

You miss the point.

No where, in any rule, or policy is an AMC allowed to negotiate your fees. By law they can only collect them and pass them on.

And the new law doesn't prohibit appraisers from bidding against each other for work.

The AMC business model will change. They'll have to be happy with whatever the lenders will pay them and whatever they can nickle and dime appraisers for (software fee, portal fee, panel fee, etc.). All they'll do is lay off the worker bees, downsize office space and the top execs will still have their toys.

There will not be a shortage of appraisers who will bid close to, if not the same, fee that they're getting now. Large fee shops will be all over this. The indie appraiser will not only fail to gain any work from the big AMCs but will find that the full fee work form local lenders will be adjusted down because local lenders will have to compete and match the low fees on the GFEs of the big boys.

Unintended consequences: Appraisers who didn't need a federal law to set their fees will find that the new "customary and reasonable" will be set not by lenders but by hordes of ding-dongs trying to low bid for work.

IMO a year from now fees will level off to or near where they are now. The other provisions of HR 4173 will start to take shape and the "customary and reasonable" zombies will find out life isn't pretty on the other side.

 

[saxon]

I don't work for these people but this weasely email came in an from "Valocity" (I love the last part)....

An Important Message from Valocity Regarding Dodd-Frank As you all know, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law not long ago. For appraisers, the most important section is Title XIV, which among other things stipulates that appraisers should be paid "customary and reasonable" fees.

As a result, we have received numerous inquires asking what the impact of Dodd-Frank might be on the industry in general, when it will be officially implemented into practice, and how Valocity plans to ensure that it pays its panel appraisers the "customary and reasonable" fee for their market area.

In case you haven't seen the official language, HR4173, Section 1472, sub-section (i) Customary and Reasonable Fee, item 1 - IN GENERAL, states: "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."

Please rest assured that we at Valocity plan to take a proactive approach. We are actively engaged with key individuals in the appraisal industry and in Washington D.C., in an ongoing effort to gain maximum clarity on the complex appraisal-realted issues within the Dodd-Frank Act as quickly as we can. When the smoke clears and we have the desired clarity on the relevant portions of the law, we will communicate what we know to you, our valued panel appraisers.

Until then, our existing fee schedule applies.

Please know that we feel extremely fortunate to have a panel that consists of the best appraisers throughout the United States, and we look forward to continuing our mutually beneficial professional relationship for many years to come!

 

[Ryan Achenbach]

I just got an order from a new AMC.

Here's how I'm going to respond. Any thoughts? I believe we all need to start doing something like this. I think it's a step in the right direction. Stop accepting low fees!


Hello Erik,

You are requesting a full FHA appraisal with MC for $325? That is well below what is customary and reasonable. Maybe you are not aware of recent events regarding this. The Dodd-Frank Wall Street Reform and Consumer Protection Bill, which has just passed and signed into law by President Obama on July 21, 2010, states that there is a $10,000 fine per offense for failure to comply in regards to not paying what is normal and customary for appraisal services. Fees are set according to the scope of work and complexity of assignment.

Minimal fee for a FHA 1004 is $425 plus $25 for 1004MC, which is typical, customary and reasonable for this area according to all credible reports. I suggest that Transconvalue and your clients take heed to this bill. $10,000 per offense can add up quickly.

I will accept the assignment if you want to comply to this. If not, this correspondence will be submitted to the enforcement agency of the above mentioned protection bill.

Thank you,

FWIW, HUD mortgagee letter 2009-28 made this a specific FHA policy as per 1/1/2010...not sure if you want to preclude the Dodd-Frank part of your notice.

http://www.HUD.gov/offices/adm/hudclips/letters/mortgagee/files/09-28ml.pdf

I've done something similar once thus far, and simply never heard back from them.

 

[Kevin Mc]

I don't work for these people but this weasely email came in an from "Valocity" (I love the last part)....

An Important Message from Valocity Regarding Dodd-Frank As you all know, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law not long ago. For appraisers, the most important section is Title XIV, which among other things stipulates that appraisers should be paid "customary and reasonable" fees.

As a result, we have received numerous inquires asking what the impact of Dodd-Frank might be on the industry in general, when it will be officially implemented into practice, and how Valocity plans to ensure that it pays its panel appraisers the "customary and reasonable" fee for their market area.

In case you haven't seen the official language, HR4173, Section 1472, sub-section (i) Customary and Reasonable Fee, item 1 - IN GENERAL, states: "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."

Please rest assured that we at Valocity plan to take a proactive approach. We are actively engaged with key individuals in the appraisal industry and in Washington D.C., in an ongoing effort to gain maximum clarity on the complex appraisal-realted issues within the Dodd-Frank Act as quickly as we can. When the smoke clears and we have the desired clarity on the relevant portions of the law, we will communicate what we know to you, our valued panel appraisers.

Until then, our existing fee schedule applies.

Please know that we feel extremely fortunate to have a panel that consists of the best appraisers throughout the United States, and we look forward to continuing our mutually beneficial professional relationship for many years to come!

What a load of shtt.