APPRAISERS COMPLAIN ABOUT FEES
Designed to avoid conflicts of interest and undue pressure on appraisers, under the recently adopted Home Valuation Code of Conduct (HVCC), in connection with certain loans, mortgage brokers can no longer hire appraisers. Rather, the HVCC required the formation of appraisal management companies (AMC) to act as an intermediary between the lender/broker and the appraiser. But, this structure has, in the view of many appraisers, created other problems.
Appraisers are now complaining that after the AMC takes its share of the appraisal fee paid by the borrower, the fee paid to the appraiser is not sufficient. According to AppraiserSupport.com [now defunct], the vast majority of appraisers are now being paid less than $250 per appraisal report. As explained on that website:
Brokers and Consumers are not ALLOWED to contact and hire the most qualified appraiser. Everyone who wants an appraisal must use an Appraisal Management Company who charges for a quality appraisal and sends out the appraisal order to bid – hoping to find the cheapest appraiser in the area. The Appraisal Management Company collects the full fee from the consumer and pays the least amount possible to the actually licensed appraiser.
It will certainly be interesting to see how the appraisal industry and regulators resolve this apparent problem.