Clearly there are some ROV requests which cross over into coercion. To deny that would be unreal. Complaints in those cases should be filed... aggressively.
Here is my forecast of what will happen if the regulators get 1,000s of complaints, many of which (I predict) will be unfounded-
1. Some bad actors will be caught
2. Entities such as VA, FHA, and Fannie/Freddie will come out with a more specific statement about the expectation that ROVs be addressed (keep in mind, the original question of this thread was if an ROV needed to be addressed in the report; it is my opinion that it does not. An email is sufficient... for now)
3. Clients who are subject to Dodd-Frank/IFR, and TILA will make sure in their engagement agreement that addressing an ROV is part of the assignment-conditions. Some will require that it be addressed in the body of the report
4. The clients will get #3 blessed by the regulators; there will be a standardization of how such requests are made. It will include clear language why the request is in compliance with the regulations. A one-page ROV will probably turn into 4-5 pages
5. Appraisers do not have to agree to it; and their recourse is to not accept the assignment. Those who do accept the assignments and fail to address the ROVs if they are part of the assignment-conditions will likely be dropped from the client's approved panel... unless the request can be shown to violate the regulations.
6. Certainly, there will be those clients who violate #5; but it is unrealistic to think that sophisticated lenders cannot devise a process that fits within the regulatory requirements and will be more or less "bullet proof" if no clear violation is found
So, what exists now as more or less a non-standardized (and perhaps, non-regulator vetted) process by the various clients (how they request an ROV)
will get standardized into a process which will make it difficult not to respond in the manner that many object to. Further, with a standardized process, I would expect that some of the ROVs that are not passed on to the appraiser will be passed on because the process (blessed by the regulators) will create somewhat of a
safe harbor (if you follow this process, you'll be fine).
We've seen this movie before. No one wants to or stops to consider the unintended consequences.
That's my prediction.
Better (IMO) to set the fee to the particular client, and base that fee on how they require/expect things to be done. If ROVs are part of their routine process, I'm going to charge more for their work... or let someone else take it on.
The regulations are designed to protect appraiser independence... but the over-riding objective is consumer protection and sound lending procedures (they are not separate... but they are not equal in their scale).
Right now, the process allows for consumers (and other stakeholders) to provide the lender with additional information for the appraiser to consider.
The argument here is that the lender should filter those requests such that the outcome is only requests that actually result in a change get sent to the appraiser (and, "change" doesn't mean a change in value. "Change" means that the appraiser is going to do something because of the ROV that s/he didn't do before.. which could be, "Yeah; I considered this new data but it doesn't move the needle."). That's substituting the lender's judgment for the appraisers. And you can bet that consumer groups will argue that the lender isn't the boots-on-the-ground expert that the appraiser is, so it is the appraiser that should make that determination. And the last sentence doesn't mean that the floodgates are open (they are not now) nor does it mean we cannot file a complaint when the ROV turns into coercion.
What it does mean (again, IMO) is that this is not a problem as far as the larger mortgage-finance universe is concerned.
They won't argue that coercion is a good thing; they'll agree that coercion is unacceptable.
They will argue that providing additional data for the appraiser to consider is not coercion.
My last comment on this in this thread.