My New Blog

Okay.  The financial reform bill has passed.  I will be giving more details as soon as they are out.   This should mostly effect low paying AMC's.   They will now be forced to pay the proper rates for appraisals.  They will NOT be allowed to use previous AMC rates as a guideline.  They must use Third Party resources for the fees.   Currently, a la mode software shows the typical rate  in the Northern Virginia market area for a Conventional appraisal to be around $400.  The other huge thing is that AMC's will need to become licensed in the states and regulated by the states they service.  This should go a long way in getting rid of the bad AMC's that make a living by squeezing money out of honest hard working appraisers.   

Please note that I work with many honest and fair AMC's that do not gouge the appraisers they work with.  In fact, they are the only ones I do business with.  As an experienced appraiser, I do not currently take work from low ball AMC's.    

 This new law will mostly effect the bad AMC's who are extorting appraisers for their own gain.  If the AMC's do not comply, they can be fined $10,000 per day.  

The above text is my interpretation from reading the bill.  I will send out a mass e-mail to my clients once the details and time lines are better understood.

Hi Everyone,

Things are looking good for the financial reform bill (FRANK-DODD Bill).  This is going to have a lot of effect on Appraisers, AMC's and Lenders.   This is really big news, but I do not want to jump the gun.  Once this bill passes I will detail and attach articles showing the changes that will effect all parties involved in the appraisal and ordering process.    I am specifically interested in the sections that require all AMC's to be regulated and licensed.  Also, AMC's will have to pay reasonable and customary fees determined by third party organizations.  They can not use current AMC fees in the analysis because they are not accurate.   This should help stop the AMC's from extorting the appraisers and force them to charge the lenders a seperate fee.  This will require them to justify there value instead of just taking part of the appraisers fee!!!!!!

More to come.  stay tuned.

“We applaud the conference committee’s efforts and urge Congress to pass H.R. 4173,” said Appraisal Institute President Leslie Sellers, MAI, SRA. “We are extremely pleased that this bill will protect consumers by encouraging the use of highly trained and competent real estate appraisers with much-needed resources for oversight and enforcement.”

In addition to authorizing grant funding for state oversight and enforcement, H.R. 4173 would require that “reasonable and customary” fees be paid to appraisers. Appraisers have complained that with the growth of appraisal management companies since the Home Valuation Code of Conduct’s implementation in May 2009, they have experienced sharply reduced fees from AMCs. “Reasonable and customary” fees will reflect what the appraiser would typically be paid for the assignment absent the involvement of an AMC, with violations subject to severe penalties under the Truth in Lending Act.

“This is extremely important for consumers and mortgage lenders,” Sellers said. “With distressed sales prevalent in the market, it is critical that highly trained appraisers be actively involved in the mortgage market. In recent years, the inability to earn customary and reasonable fees has been a significant obstacle for many highly trained appraisers, whose experience is badly needed to assist with the economic recovery.”

Additionally, the measure would:
-Establish a federal appraisal independence standard, sunsetting the HVCC.
-Require AMCs to register with state agencies.
-Enhance appraiser competency provisions, including clarification regarding consideration of professional appraisal designations.
-Provide financial resources for oversight and enforcement.
-Separate AMC and appraisal fees on the HUD-1 Statement.