FHA Warns Appraisers on Fees

The Federal Housing Administration is warning appraisers not to increase their fees significantly as a result of a newly revised valuation sheet and other Homebuyer Protection Plan reforms. In a mortgagee letter, FHA Commissioner William Apgar contends that the FHA has not increased appraisers' liability and that the agency will even refrain from stepping up enforcement actions until March 1, 2000. "Consequently, there is no reasonable explanation for a significant increase in fees," Mortgagee Letter 99-32 says. While the FHA does not regulate appraisal fees, Mr. Apgar points out that FHA lenders should use appraisers that charge reasonable and customary fees. "Any amount above what is reasonable and customary cannot be paid by the mortgagee," Mr. Apgar says in the mortgagee letter.