Three industry trade groups are urging the Federal Reserve to adopt an interim final rule on appraisal independence later this month, without addressing the issue of "customary and reasonable" fees for appraisers.
The American Financial Services Association, Consumer Mortgage Coalition and the Financial Services Roundtable Housing Policy Council argue that there are no reliable surveys or studies on appraisal fees.
Under the Dodd-Frank Wall Street Reform bill substantial fines can be levied against lenders for failing to pay appraisers their "customary and reasonable" fees: $10,000 a day for the first violation and $20,000 for the second.
Dodd-Frank directs the Fed to define specific acts and practices that violate appraiser independence by October 19, but it is not required to address C&R fees, the trade groups say in their letter to the Fed. "There is no language in the Dodd-Frank Act requiring the interim final rule to mention, let alone define, customary and reasonable appraisal fees," the groups say.
They want the issue of C&R fees deferred until the regulators working together issue an interagency final rule on appraisal independence. Such a delay would give the General Accountability Office time to complete a one-year study of appraisal fees, which is also mandated by the Dodd-Frank Act.
Industry groups and appraisal management companies have retained PriceWaterhouse Coopers to conduct a nationwide study of appraisal fees.
The Department of Veterans Affairs tracks appraisal fees for the VA Home Loan Program. Appraisal groups are urging the Fed to use the VA fee data for the interim final rule.
AFSA, CMC and the Roundtable contend VA tracks the maximum permissible fee in markets and it is not suitable for determining C&R fees.
