The CFPB and the individual recent appointed to head the agency have been in the news quite a bit recently. Without offering any opinion about the agency, the appointments, and the politics, it is important to be aware of the CFPB's massive rule making authority.
This week, Ken Harney writes about the CFPB reviewing ways to bring more clarity and better disclosure to fees associated with Real Estate Transactions. The focus of the story is the failure to inform borrowers of the fact a significant part of the fee may be paid to an affiliate or subsidiary of the lender. The CFPB is considering rules to require disclosure of the portion of the appraisal fee retained by Appraisal Management Companies.
Ken writes:
One of the fees being scrutinized might surprise you: appraisal charges. Why do they need clarifying? Doesn’t just about everybody who applies for a mortgage, whether it’s to buy a house or refinance, have to pay $450 to $600 — sometimes more — to find out what the property is worth?and
Say you’re charged $550. There is no hint that the appraiser may be getting $250, with the rest going to the management company and the lender. The CFPB is considering whether to shed light on this by mandating two disclosures: what the appraiser is paid and what the management company is taking.
Frank Gregoire, a past chairman of the Florida Real Estate Appraisal Board, which oversees and regulates the industry in that state, says that while appraiser independence is important, banks and their affiliated management firms are raising the costs of appraisals to consumers without improving services.
Defenders of management firms, such as Donald E. Kelly, executive director of the Real Estate Valuation Advocacy Association, strongly disagree. Kelly says management firms perform the “back office” functions — including reviews and quality control — “that in the past were done by lender staff and employees.” In other words, they earn the money they get. And there’s no pressing need for consumers to see additional disclosures. They just need to know the bottom line.
Read the article HERE.
On the floor, next to my desk, is a stack of appraisal reports. Borrowers, lenders, real estate agents, and other appraisers sent them my way as examples of shoddy work and lack of quality control by AMCs. How do appraisal reports pass through a quality control check when the appraiser cites ZILLOW or TRULIA as the source of his date of sale, time, or market conditions adjustment, and that it is based on data from a zip code, not a market area? >
Wondering.
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6 comments:
stop already, it's over, You blew it. we are all out of business because of NON unionized spoiled little brats like AI an IFA. the fees are 40 for a drive by, 145 for a full. No one can live on that. WE are done, out of business. And it's all your fault. SO stop bitching and change carers like i had to after 22 years.Hope you all choke on your bullshit
Thanks for the comment, anonymous. The fees you cite are not ones acceptable in my corner of the world.
Place your bets now on whether they will shed light on this injustice or opt for accepting yet more bank bribes to bury the issue.
My Vote: I have no doubt they'll a accept the bank bribe.
For the record I also vote the first guy's comments as being from an insane lunatic. LOL Does he really think Frank (a working appraiser) was behind this mess?
The hijacking of the appraisal industry was a direct result of long term plans by the banking lobby with the assistance of Andrew Cuomo.
Mr. Gregiore, Frank Dodd stipulates that appraisers must be paid customary and reasonable fees. Has there been any lawsuits brought against lenders for non-compliance with this aspect of the regulation? I work with some AMC's that raised the fees paid to appraisers after Frank-Dodd went into effect, and at least one major lender who seems to be enough concerned that they have placed the following verbage on assignments I receive through AMC's with which they work: "The client has established Reasonable and Customary Fees for all appraisal assignments. The fee for an (fill in the report type) in the State of Florida is: $xxx.xx" The fee they have "established" is usually higher than fees paid by other competing AMC's. It seems like a small number of lenders are starting to get worried. Is this because some appraiser's have been able to win a few lawsuits?
As anyone who has done business with AMC's knows, most of them review your work. However, most of these "reviewers" are not certified appraisers, and they are almost always located out of state. Since appraisal review falls under USPAP and state license provisions, what is Florida doing to investigate and punish this unlicensed activity? Also, when appraisers are brought up before the board, are these AMC's with their out of state reviewers also held accountable?
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