On July 8th, ASA and three other organizations submitted written comments to the Consumer Financial Protection Bureau (CFPB) in connection with a Request for Information on mortgage fees. In the letter, ASA and their partners called for the separate disclosure of fees paid to appraisers and appraisal management companies (AMCs) and urged the CFPB to use its existing statutory authority to require separate disclosure.
The letter emphasized that, under Section 1475 of the Dodd-Frank Act, CFPB had the right to require “a clear disclosure of…the fee paid directly to the appraiser by [an AMC]; and the administration fee charged by [an AMC].” Presently, these are both captured on a single line in the Loan Estimate and Closing Disclosure forms as an “appraisal fee”, allowing AMCs to extract significant fees from consumers – often greater than the fee paid to the appraiser – without having to provide separate disclosure of the AMC fee.
The letter concludes by emphasizing the absence of meaningful quality control functions within AMCs, and the need for CFPB and banking regulators to ensure that mortgage lenders fully understand the practices of AMCs they retain.
ASA was joined in the comments by the Appraisal Institute, the American Society of Farm Managers and Rural Appraisers, and MBREA. To read the full letter, click here.