Wednesday, November 16, 2011

GAO on Residential Appraisals

I scanned, but did not read this 60-page report. It appears to be a presentation of data gathered by the GAO, with no meaningful recommendations for actions, beyond telling various governmental agencies that they need to talk to each other about this topic.

Yes, this is old-ish news, as the report was published last July. I just stumbled across it and thought it might be useful to have posted here.


“Other lenders and industry groups are having fee studies done in order to comply. Because these studies cannot include the fees AMCs pay to appraisers, some industry participants, including some AMC officials, expect them to demonstrate that appraiser fees should be higher than what AMCs are currently paying.

If that is the case, these lenders would require AMCs to increase the fees they pay to appraisers to a rate consistent with the findings of those studies. The expected result would be an increase in appraisal costs for consumers, as well as potential improvements in appraisal quality.

However, some lenders are evaluating the possibility of no longer using AMCs and managing their own panels of appraisers, which would eliminate the AMC administration fee from the appraisal fee that consumers pay.

Some regulatory officials and lenders told us that lenders can still recover the cost of managing the appraisal process from the consumer in other ways—for example, through higher application fees, origination fees, or interest rates.”

Residential Appraisals: Opportunities to Enhance Oversight of an Evolving Industry


Full Report (pdf)

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