Rumor has it increased appraisal fees are in our future. Since the HVCC and Dodd-Frank Act, this has been a controversial topic. Among the top issues that resulted:
- What is the Customary and Reasonable fee?
- How is the Customary and Reasonable fee determined?
- How much profit does the AMC make?
- How much profit should the AMC make?
- Should the government be regulating the residential appraisal process?
- Who is going to regulate AMCs?
While some of these issues have begun to get ironed out, some are still very much a huge question mark. Fortunately, it looks like the question mark regarding appraisal fees will soon be replaced with an exclamation point! Appraisers nationwide will be thrilled to see their fees go up.
Insiders are saying this change is necessary to improve the loan process. With the number of appraisers diminishing every year, their demand is at an all time high. Combine this with increased underwriting criteria and you will see the need for increased appraisal fees. This will help ignite the appraisal profession by allowing current appraisers to not only thrive, but to bring on trainees so the profession will continue to grow. Without trainees, there will be even less appraisers down the road, resulting in even higher demand and longer turn times, among other things. Mortgage professionals and borrowers need to prepare and welcome these changes. By being pro-active now, the industry will benefit tremendously in the long term.