The Virginia Coalition of Appraiser Professionals (VaCAP) is a non-profit group of volunteer appraisers. We serve to promote public confidence in the appraisal profession as one of its central tenets.
Since the beginning, Federal Regulation of the industry was initiated to “protect the public.” FIRREA, USPAP, HVCC, Dodd-Frank, state licensing of appraisers and appraisal management companies were inducted with consumer protection as the goal. Customary and reasonable fees, mandated by Dodd-Frank, are also to protect the consumer.
The final rules have been out less than a year. Dodd-Frank empowered the states to enforce customary and reasonable fees. However, it did not instruct the states on how to enforce customary and reasonable fees.
In Virginia, an AMC can use any presumption allowed in TILA, and be considered as having met the presumption of compliance. In order to have met the presumption of compliance, the AMC must 1) consider the type of property, 2) the scope of work, 3) the time in which appraisal services are required to be performed, 4) the appraiser’s work quality, and 5) the appraiser’s professional experience and professional record. The AMC must not engage in any anticompetitive acts in violation of state or federal law that affect the compensation paid to fee appraisers.
How could an AMC produce any evidence of how they arrived at the fee paid to the appraiser when the appraisal order is blasted to every appraiser via email or text message “with the first to respond gets the order?” What evidence and support will an AMC have when they have requested a fee and turn time from every appraiser that covers the geographic region? The only evidence an AMC will have is how they got the lowest fee accepted. Some AMCs operate with the assumption if the appraiser signs a statement agreeing a fee is customary and reasonable, they have complied with the law. This is simply not the case.
The Virginia Real Estate Appraiser Board is empowered to enforce customary and reasonable fees. The Board formed a committee to determine best practices, beginning with a public comment period, a public meeting by the committee, and much research and discussion. Ultimately, the committee compared the fee studies conducted in other states and compared them to the Veteran Affairs Fee Schedule in those states. The results were, in almost all the studies analyzed, the Veteran Affairs Administration Fee Schedule was very closely matched with other fee study results. Rather than go through all the expense and time of a fee study, the committee recommended to the Board they adopt the Veteran Affairs Administration Fee Schedule as a presumption of compliance that can be used. The Board discussed the recommendation of the committee in great length, accepted public comments, and interviewed an AMC representative that was present at the meeting. On February 23, 2016 the Virginia Real Estate Appraiser Board approved the Veteran Affairs Fee Schedule as a presumption of compliance for customary and reasonable fees.
The Virginia Real Estate Appraiser Board issued a guidance document to interpret and implement the requirements of 54.1-2021.1.B.2.k and 54.1-2022.1 of the Code of Virginia, and 18 VAC 130-160.15 of the Board’s Appraisal Management Company Regulations as a means of providing information or guidance of general applicability to the public.
In support of its appraiser members and to protect the public, VaCAP sent a courtesy notification along with a copy of the Guidance Document to every licensed AMC in Virginia explaining the actions of the Board. VaCAP received some very positive feedback from many AMCs. Unfortunately, VaCAP also received a response such as this from the CEO of one AMC:
“I have no idea who you are or why you are contacting my office. “
Regardless of which presumption the AMC uses to determine the fee paid to the appraiser, the burden of proof is on the AMC. They must provide the data, analysis and results of how the fee was determined in order to be in compliance. In all presumptions the fee paid to fee appraisers, as defined in in 226.42(f) (4) (i) of TILA, must be excluded from the data, analysis and results.
Although not every appraiser will benefit directly from the efforts of VaCAP and the Virginia Real Estate Appraiser Board, other state coalitions offer significant benefits to appraisers in their state. The ground work has been set making it easier for other states to follow Virginia’s lead. Of course other states have helped set the ground work for Virginia. If your state has a coalition, you should consider membership and volunteer. VaCAP works closely with other coalitions and every appraiser benefits from the efforts of the coalitions.
For more information on this effort by VaCAP, you can contact them directly at:
Virginia Coalition of Appraiser Professionals
P.O. Box 42314
Richmond, VA 23242
804-741-4968
E: info@vacaponline.com
www.vacaponline.com
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