“Appraisal services are not one-size-fits-all, and we believe the Federal Reserve Board created a compliance structure for the payment of 'customary and reasonable' appraisal fees that reflects market realities..."
Washington, DC (PRWEB) July 14, 2011
Donald Kelly, executive director, Real Estate Valuation Advocacy Association (REVAA), appeared today before the House Financial Services Committee, Subcommittee on Insurance, Housing, and Community Opportunity to testify on behalf of REVAA and the Coalition to Facilitate Appraisal Integrity Reform (FAIR) on Mortgage Origination: The Impact of Recent Changes on Homeowners and Businesses.
The testimony comes just prior to the Federal Reserve Board transitioning its rulemaking authority to the Consumer Financial Protection Bureau (CFPB). Members of REVAA and FAIR advocate that the Federal Reserve Board, the CFPB, and Congress should continue to allow the marketplace to dictate appropriate appraisal fees.
“In the lead up the current financial crisis, inflated appraisal fees were the norm for many appraisers who, in partnership with overzealous mortgage brokers and lenders, produced appraisal reports that were impacted by inappropriate influence and coercion,” states Mr. Kelly in his testimony. “The resulting appraisals often reflected inflated values, which certainly did not constitute ‘high quality’ appraisals.”
Kelly cites the Dodd-Frank Act requiring that lenders and their agents compensate appraisers at a “customary and reasonable” rate for appraisal services in the market area of the property being appraised. REVAA and FAIR believe that the appraiser compensation standards promulgated by the Federal Reserve Board are in compliance with the Dodd-Frank Act and they reflect the variations in actual services and other factors that exist in the marketplace.
“Appraisal services are not one-size-fits-all, and we believe the Federal Reserve Board created a compliance structure for the payment of 'customary and reasonable' appraisal fees that reflects market realities and ensures that prices paid by consumers will remain competitive,” states Mr. Kelly.
A copy of the transcript is available here.
FAIR is a coalition of five of the nation’s largest appraisal management companies, which operate networks of individual appraisers and appraisal firms for the completion of appraisal reports. The five companies that comprise FAIR include: LSI, a division of Lender Processing Services, Inc.; ServiceLink Valuation Solutions, LLC, a Fidelity National Financial, Inc. company; Valuation Information Technology, LLC d/b/a Rels Valuation; CoreLogic, Inc.; and PCV/Murcor. Rels Valuation is an affiliate of CoreLogic, Inc. and Wells Fargo Bank.
The Real Estate Valuation Advocacy Association (REVAA) is an industry trade association dedicated to the maintenance and further development of high quality standards within the real estate valuation industry and the advocacy of related causes. REVAA promotes high ethical standards, political awareness, and the growth of the real estate valuation industry as a whole. REVAA is comprised of companies that produce and sell, or benefit from, real estate valuation products including Appraisals, Broker Price Opinions (BPOs), Automated Valuation Models (AVMs) and other innovative approaches that benefit mortgage investors, servicers, originators and borrowers. Learn more at http://www.revaa.org.