Nc To Use VA Fees For C&R

[Eli]

It is basic price fixing 101.

It's really worse than that because a phone monkey can tell you that everybody who is getting work is charging $200 so for you to get any work you need to charge $200. That's the market power on price like fast food Giants had on cattle farmers. That's why the cattle farmers only had to file an antitrust lawsuit. The govt stepped in quick and Mickey d said please let me help.

 

[djd09]

Where is the UAD data on fees. Why doesn't CU rate them on fees paid?

 

[djd09]

C&R is a magic trick to distract from the disappearing money.

 

[Bob Ipock]

The law gives an Appraiser a place to file a compliant that will be looked at.

What were the options before the law, other than to "get better clients"?

To all appraisers, appraisal management companies, and interested persons:


As you may know, as of January 1, 2017, pursuant to SL 2016-61, appraisal management companies will be required to pay customary and reasonable fees to appraisers. The North Carolina Appraisal Board plans to undergo rulemaking regarding the enforcement of this law. Until rulemaking is completed, the Board has adopted a Guidance Document to implement the law on an interim basis.

The Guidance Document sets out two presumptions of compliance with the law. One of those ways is to pay a fee based on a government fee schedule. The Appraisal Board takes the position that the VA fee schedule is a government fee schedule, and paying the VA fee results in a presumption of compliance with the law.

It is important to note that the Board does not require appraisal management companies to pay the VA fee for every assignment. The VA fee is simply one method of compliance for an AMC. An AMC may pay a fee that is higher or lower, but must be able to show compliance with the law if a complaint is filed regarding the fee.

Attached is the Guidance Document that was unanimously approved at the Board’s December 13, 2016 meeting.

If you have any questions, please feel free to contact staff.


Charles McGill, Chairman

Donald Rodgers, Executive Director

 

[Bob Ipock]

To all appraisers, appraisal management companies, and interested persons:

NORTH CAROLINA APPRAISAL BOARD
5830 SIX FORKS ROAD

RALEIGH, NC 27609

TELEPHONE: 919-870-4854

FAX: 919-870-4859


E-mail: ncab@ncab.org

Website: www.ncappraisalboard.org



Guidance Document


Customary and Reasonable Compensation for Appraisers


On January 1, 2017, Session Law 2016-61 will become effective. SL 2016-61 states that:


For appraisal assignments of property secured by the principal dwelling of the consumer, an appraisal management company shall compensate appraisers in compliance with section 129E(i) of the federal Truth in lending Act (15 U.S.C. §1601 et. seq.) and regulations promulgated thereunder. The Board shall adopt rules necessary to enforce this subsection. Rules establishing customary and reasonable rates shall be based on objective third-party information such as academic studies and independent private sector surveys.


The Board anticipates beginning rulemaking on this law in the near future. Until that time, however, the Board issues this Guidance Document for AMCs and appraisers to interpret and implement the requirements of SL 2016-61.


According to 12 CFR §1026.42 there are two ways in which an AMC may comply with the new law.


1. AMCs are presumed to comply with the new law, if:



(a) The AMC (agent) compensates the appraisers in an amount that is reasonably related to recent rates paid for comparable appraisal services performed in the geographic market of the property being appraised. In determining this amount, a creditor or its agents shall review the factors below and make any adjustments to recent rates paid in the relevant geographic market necessary to ensure that the amount of compensation is reasonable:


(1) The type of property,

(2) The scope of work,

(3) The time in which the appraisal services are required to be performed,

(4) Fee appraiser qualifications,

(5) Fee appraiser experience and professional record, and

(6) Fee appraiser work quality


(b) The AMC (agent) and the Client (creditor) do not engage in any anticompetitive acts in

violation of state or Federal law that affect the compensation paid to fee appraisers,

including:


(1) Entering into any contracts or engaging in any conspiracies to restrain trade through methods such as price fixing or market allocation, as prohibited under section 1 of the Sherman Antitrust Act, 15 U.S.C. 1, or any other relevant antitrust laws; or

(2) Engaging in any acts of monopolization such as restricting any person from entering the relevant geographic market or causing any person to leave the relevant geographic market, as prohibited under section 2 of the Sherman Antitrust Act, 15 U.S.C. 2, or any other relevant antitrust laws.


2. AMCs are also presumed to comply with the new law by determining the amount of compensation paid to the fee appraiser by relying on information about rates that:


(a) Is based on objective third-party information, including fee schedules, studies, and/or surveys prepared by independent third parties such as government agencies, academic institutions, and private research firms,

(b) Is based on recent rates paid to a representative sample of providers of appraisal services in the geographic market of the property being appraised or the fee schedules of those providers, and

(c) In the case of information based on fee schedules, studies, and surveys, such fee schedules, studies, or surveys, or the information derived therefrom, excludes compensation paid to fee appraisers for appraisals ordered by appraisal management companies.


The Appraisal Board hereby states that the Appraisal and Inspection Fees Schedule for North Carolina appraisals published by the Department of Veterans Affairs, Atlanta Regional Loan Center (VA fee schedule) is a government agency fee schedule which AMCs may use as a presumption of compliance with SL 2016-61.



The Board does not require AMCs to pay appraisal fees only in accordance with the VA fee schedule. An AMC may pay a fee that differs from the VA fee, but must be able to show compliance with SL 2016-61 if a complaint is filed regarding the fee offered or paid to the appraiser.


The customary and reasonable fee for a complex assignment may reflect the increased time, difficulty, and scope of work required for such an appraisal and may include an amount over and above the customary and reasonable fee for non-complex assignments.







Rev. December 12, 2016

 

[Meandering]

To all appraisers, appraisal management companies, and interested persons:


As you may know, as of January 1, 2017, pursuant to SL 2016-61, appraisal management companies will be required to pay customary and reasonable fees to appraisers. The North Carolina Appraisal Board plans to undergo rulemaking regarding the enforcement of this law. Until rulemaking is completed, the Board has adopted a Guidance Document to implement the law on an interim basis.

The Guidance Document sets out two presumptions of compliance with the law. One of those ways is to pay a fee based on a government fee schedule. The Appraisal Board takes the position that the VA fee schedule is a government fee schedule, and paying the VA fee results in a presumption of compliance with the law.

It is important to note that the Board does not require appraisal management companies to pay the VA fee for every assignment. The VA fee is simply one method of compliance for an AMC. An AMC may pay a fee that is higher or lower, but must be able to show compliance with the law if a complaint is filed regarding the fee.

Attached is the Guidance Document that was unanimously approved at the Board’s December 13, 2016 meeting.

If you have any questions, please feel free to contact staff.


Charles McGill, Chairman

Donald Rodgers, Executive Director

To all state boards and appraisers.

AMCs and Lenders were required to pay Customary and Reasonable fees to appraiser since APRIL 11, 2011. That is when the law was effective.

But at least, 6 years later, appraisers are finally starting the read the law.


.

 

[sandpiperapp]

Justified or not the subject matter of C&R had an effect on fees paid. It appears to have caused them to trend higher.

I think that establishing the VA as one way of complying has some appraisers raising their fees. I think some of the AMCs do not want to get into this fight with appraisers as thier methods are not up to par as Mr Wiley suggested. They dont want to be the test case and would prefer if one of the bigger AMCs take it on, so the smaller players raise the fees paid to stay out of the fray. For Now

 

[DWiley]

I think that establishing the VA as one way of complying has some appraisers raising their fees.

I would not be surprised at all to see that - at least at first. But, as I have said many times, the driving force behind fees is the appraisers, not the AMCs or the lenders. If all appraisal fees were automatically raised to the VA rate at midnight tonight, within 10 seconds some appraisers would start cutting their fees, because they know no other way to market.

 

[Meandering]

I would not be surprised at all to see that - at least at first. But, as I have said many times, the driving force behind fees is the appraisers, not the AMCs or the lenders. If all appraisal fees were automatically raised to the VA rate at midnight tonight, within 10 seconds some appraisers would start cutting their fees, because they know no other way to market.

Probably has less to do with what marketing techniques appraisers "Know" for attracting residential work,

And more to do with, there is no such thing as "marketing" to sell those services anymore.

Fill out the profile,
buy the background check,
Fill in your fee schedule,
we'll call you if we need you.

Yup, nothing much to market.

.

 

[sandpiperapp]

It is kinda funny that many people put on the ol supply and demand blinders on when discussing C&R and totally ignore the many other dynamics effecting this issue.

Having gotten that off of my chest, at this time Mr Wiley is correct that appraisers are the only ones who can change the fee structure. The whole VA as C&R may be misinterpreted by those who think that this is only measure of compliance, and there is also a possibility that the naysayers may be wrong that it is just one of the methods of compliance. Only time will tell.

I think in the short term, as evidenced in Virginia, appraisers are raising their fees and getting them. I think some appraisers have been emboldened by the VA proclamation, and I think some of the smaller AMCs dont want to be the test case, so they are paying. Will it last? I dont know.

What I do know is that the appraisers that have survived the AMC debacle to this point, are a little stronger, a little more seasoned, and hopefully have a little more resolve that the 110,000 or so that were licensed back when Cuomo handed AMCs the golden goose.

Mr Wiley may be right that appraisers will start to undercut each other again, but maybe the few that are left will not. I cant answer that. I can only hope not. It is a different group that has survived than the one that was practicing at the start of the HVCC.