Customary and Reasonable Fees

Is a new day dawning for residential appraisers that work for appraisal management agencies (AMCs)?

 If you read the newly enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173) that answer is YES.  We have all been hearing about the new law that requires AMCs to pay appraisers "customary and reasonable" fees.  So when should we be expecting a pay raise?  October 19, 2010 is the big day.

Talk about teeth.  Lenders and AMC that continue to pay appraisers "slave wages" after this date can be fined $10,000 to $20,000 PER DAY.

So who gets to decide what is "customary and reasonable."  We do (the appraisers).  And the kicker is that fees paid by known AMCs are excluded from setting the standard.  Now there are other agencies that get to have a say as well (The V.A. as an example) but AMCs do not.

The Appraisal Institute recently published a FAQ which provides some good insight.

I personally will be keeping a keen eye on how AMCs will be responding over the next few weeks.  They are no doubt going to try to find a loop hole.  But if we can now expect to get "full fees" from AMCs, I will probably start responding to their e-mails and phone calls.