By Dan Bradley, SRA, CDEI
I like to think of myself as a realist, as opposed to being an optimist or a pessimist. For me, the glass is neither “half full” nor “half empty”; it contains approximately 6 ounces. When it comes to the issue of customary and reasonable fees, however, my take is that not only is the metaphorical glass half empty, but the beckoning oasis that has been promising to fill up the glass is merely a mirage.
When the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law, mandating that lenders and AMCs pay customary and reasonable fees, appraisers everywhere stood and applauded (some quite literally!) The Act did not specify exactly what was customary and reasonable – instead this responsibility was delegated to the Federal Reserve Board. In late October 2010, the FRB released an interim final rule for implementation of the Dodd-Frank Act, and it appears that customary and reasonable has been defined to mean essentially whatever an appraiser is willing to accept. Allow me to explain…
They’ve done it again! The Illinois Real Estate Appraisal Board has published another gem of an article in their August 2010 newsletter. So good is the article, in fact, that we felt compelled to reprint it here so that appraisers nationwide can enjoy it.
With the passage of H.R. 4173, lawmakers slipped in a statement referring to appraisers being paid a customary and reasonable fee for assignments in a given market area.
Well…that’s just dandy. What does that mean?
Don’t look to Congress to define it. They’ve already clapped their hands together like blackjack dealers at the end of a shift and moved on to something else.
Is it what an appraiser is paid by an AMC? Is it what a bank pays?
On July 21, 2010, President Obama signed H.R. 4173, which is known by its short title, the Dodd-Frank Wall Street Reform and Consumer Protection Act. It has been widely hailed as the most significant financial and lending reform since FIRREA in 1989.
Much has been made of the “appraiser-friendly” provisions in this new law; some of these are more meaningful than others. This law actually contains a series of amendments to existing federal laws, including the Truth in Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
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