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For All You Price Fixing Advocates - F T C Weighs In

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Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Wednesday, May 31, 2017-- Valuation Review:

"The Federal Trade Commission (FTC) has filed a complaint against the Louisiana Real Estate Appraisers Board (LREAB), alleging that the group is unreasonably restraining price competition for appraisal services in Louisiana, contrary to federal antitrust law. The complaint will be submitted to adjudication before an Administrative Law Judge, who will review it and render an initial decision, according to a release from the FTC.

In the administrative complaint, the FTC alleges that the Louisiana appraiser’s board limits the freedom of individual appraisers and their customers to engage in negotiations to set appraisal fees for real estate appraisals in Louisiana.

According to the FTC’s complaint, the Dodd-Frank Act “required appraisal management companies to pay a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.” The FTC alleged in its complaint that the appraisal board’s regulations exceeded the scope of the federal mandate.

“Specifically, the board required appraisal fees to equal or exceed the median fees identified in survey reports commissioned and published by the board. The board then investigated and sanctioned companies that paid fees below the specified levels. The complaint alleges that Dodd-Frank neither requires nor authorizes the restrictions that the board placed on appraisal fees,” the release said."
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Hey Elliott,
Wasn't there federal legislation requiding Customary and Readonable Fees. Maybe FHFA can defend the LA board.
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I am fine with fixed prices for conforming properties, if the fixed price is up there where it needs to be.
So soar like an eagle, not trot like a turkey. :peace:

For non conforming properties we go with tried and true negotiations. Shoot for the moon.
The appraiser decides what is conforming and what is not.
Because of course the client thinks everything is a conforming slam dunk. :leeann:
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I am fine with fixed prices for conforming properties, if the fixed price is up there where it needs to be.
:leeann:
Undoubtedly most appraisers would be fine with fixed fees as long as the fee was high, however that would never work with the FTC
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Hey Elliott,
Maybe FHFA can defend the LA board.
Won't happen. FHFA has nothing to do with appraisal fees or enforcement of C&R. Aside form that, the FTC is the lead federal agency in charge of enforcing anti-trust law and no other federal agency is going to get involved with defending the LA board or any other defendant in an anti-trust complaint that is being pursued by the FTC.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
U.S. CodeTitle 15 › Chapter 41 › Subchapter IPart B › § 1639e
15 U.S. Code § 1639e - Appraisal independence requirements
(i) Customary and reasonable fee
(1) 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.

(2) Fee appraiser definitionFor purposes of this section, the term “fee appraiser” means a person who is not an employee of the mortgage loan originator or appraisal management company engaging the appraiser and is—
(A) a State licensed or certified appraiser who receives a fee for performing an appraisal and certifies that the appraisal has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice; or
(B) a company not subject to the requirements of section 3353 of title 12 that utilizes the services of State licensed or certified appraisers and receives a fee for performing appraisals in accordance with the Uniform Standards of Professional Appraisal Practice.


Maybe AG Jeff Sessions will be defending the LA board.
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Hey Elliott,
Wasn't there federal legislation requiding Customary and Readonable Fees.
According to the FTC complaint, the Dodd-Frank law (which is the law mandating C&R) specifically states that it is superseded by existing anti-trust laws. Here is the applicable language from the FTC complaint:

20. Dodd-Frank includes a provision known as an “antitrust savings clause.” DoddFrank provides that “[n]othing in this Act … shall be construed to modify, impair, or supersede the operation of any of the antitrust laws.” In other words, Congress specifically directed that Dodd-Frank was not intended to displace generally applicable antitrust principles, including the prohibition on unreasonable agreements in restraint of trade.
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
TLDR, show me the money! :leeann:
 

timd354

Elite Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Maybe AG Jeff Sessions will be defending the LA board.
No, The AG does not defend defendants against the enforcement actions of a US Gov't agency....that is not what the AG's office does.
 
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