| Appraisal Orgs Seek RESPA Clarification Regarding AMCs and Fees to Appraisers The Appraisal Institute has called on the Department of Housing and Urban Development to ensure that lender management fees are not misleadingly represented as fees to appraisers on the Good Faith Estimate and HUD-1 documents.
Clarification, the group says, will allow consumers to see the actual costs of all services and alleviate concerns that pit the profits of appraisal management companies against customary and reasonable fees to appraisers.
“We believe a clarification by HUD is necessary to avoid consumers paying unnecessarily for services reported on the appraisal line of the HUD-1 that are actually part of a lender’s cost of doing business,” the Appraisal Institute wrote in an April 8 letter to HUD Secretary Shaun Donovan. They were joined by the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers.
Of concern to the appraiser organizations is that consumers are under the false impression that appraisal fees are going up. The appraiser organizations blame the confusion on an interpretation of the Real Estate Settlement Procedures Act that allows fees to an AMC to be passed through the appraisal line of the HUD-1. Such fees, for processing and administration functions, should be disclosed on the origination charge line, along with the other processing and administration charges, the groups said.
The appraiser organizations recommended several clarifications to HUD’s interpretations of RESPA that would distinguish the functions of appraisal and appraisal management.
To read the appraiser organizations’ letter to HUD, visit www.appraisalinstitute.org/newsadvocacy/downloads/ltrs_tstmny/2010/AI-ASA-ASFMRA-NAIFA_RESPA_FAQs-Final.pdf . To read HUD’s frequently asked questions relating to the new RESPA rule, visit www.hud.gov/offices/hsg/ramh/res/resparulefaqs422010.pdf . |
North Country Appraisal Services - Gaylord, MI
This is long overdue. Demands on appraisers for additional information and documentation have multiplied over the past 10 years with actual fees declining or, at best, remaining stable. The AMCs attempt to force lower fees on appraisers while the reported fees appear to increase as they profit by increased cost to consumers coupled with decreased fees to appraisers. This would provide transparency which even the lawmakers may recognize as a hardship to appraisers and the consumers. It would make it more difficult for the AMCs to dance around the appraisal fees actually paid to the appraisers.
Apr 15, 2010 08:16 AM
Hughes Appraisal Group Inc. HUD/FHA Approved) - Lehigh Acres, FL
LGBTQ PROUD !!!
Very Good and informative blog. I get comments all the time how the appraisers have raised their fees based on the HUD-1. I don't believe appraisal fees have gone up in over 6 years, at least not here in SW Fla
Apr 24, 2010 12:53 AM
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy
I agree, You and Richard have hit the nails on the head. Why anyone thinks its a good thing to allow the AMCs to continue to hide their fees from the public under the "appraisal fee" umbrella is more than any right thinker would understand. I think if people knew what was going on with their higher appraisal fee they are now being ask to pay, they would complain. Maybe that would make the lenders rethink their use of these expensive AMCs, & perhaps go a different direction, like the Mercury network, or others that are HVCC compliant ordering systems lenders can use that pay the appraiser their full fee.
AZ is in the process of getting a bill through to regulate AMCs & one provision that was attempted in the bill was to require the AMCs to disclose their fees separately from what was paid the appraser. It was taken out because the AMCs all complained too much. Gee, I wonder why?
Apr 24, 2010 04:55 AM
Rainmaker
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