BUZZ: Larry, thanks for taking the time to speak with us. Can you tell our readers a little bit about your history in the appraisal industry and your current position.
DISNEY: Since 2003 I have been employed as the Executive Director of the Kentucky Real Estate Appraisers Board (KREAB), and from 1999 until September 2003 I was the Chief Investigator for Appraiser complaints with the KREAB. I began appraising real property assignments in 1977, and practiced full time from 1977 through 1999 when I was employed by the KREAB. Since 1982 I have developed and instructed qualifying education and continuing education courses for real estate licensees and real property appraisers. I hold the following licenses and designations, Kentucky Certified General Real Property Appraiser, Kentucky Real Estate Broker, designated SRA member of the Appraisal Institute, designated IFAS by the National Association of Independent Fee Appraisers, certified as an AQB USPAP Instructor, certified by the International Distance Education Certification Center as a Distance Education Instructor, and I am the immediate past president of the Association of Appraiser Regulatory Officials (AARO).
BUZZ: I understand you have an announcement to share with us. Do tell.
DISNEY: On Friday June 19, 2015 the Kentucky Real Estate Appraisers Board accepted the study for “Kentucky Residential Real Estate Appraisal Fees for 2014.”
BUZZ: What were some of the reasons for this study?
DISNEY: During a meeting in 2014, the KREAB approved to issue a request for proposal (RFP) to develop a fee study of residential real property appraisal fees completed throughout all areas of Kentucky. The study was requested because of a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the board belief that the Appraisal Subcommittee (ASC) will expect the board to have a process in place assist in the requirement to comply with section 129E(a) – (i) of the Truth in Lending Act, 15 U.S.C. 1639e (a) – (i), and the regulations thereunder.
When issued, the Dodd-Frank Act included the language – “Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies.”
While there was no specificity given for the agency or group to enforce the provision, it was apparent that regardless of the agency or entity identified to enforce the act when allegations are levied for AMC failure to pay customary fees, it was the opinion of the KREAB that there must first be an independent, objective and unbiased study of customary fees developed to use in debating and resolving the matter. It was determined that the one source having the greatest credibility to develop the results would be an institution of academic studies or a third party source that possessed similar resources for completing an independent survey.
BUZZ: Who developed your fee study for you?
DISNEY: The KREAB issued the Request for Proposal through the Kentucky Department of Procurement. The process requires specific language, including a detailed scope of work for the job task being requested. Following the exposure time of one month, the board did receive one response from Southeastern Louisiana University Business Research Center. Following a review of the scope of work, and discussion with the personnel at Southeastern Louisiana University the board approved the proposal and work began. The research was developed, the study was completed and the results were presented to the board in June 2015.
BUZZ: How will this fee study affect appraisers in Kentucky?
DISNEY: The impact for both Kentucky credentialed appraisers and registered AMCs remains to be seen. The study was accepted by the board less than one week ago, therefore, it is much too early to gauge any results or have any comments from appraisers, lenders, borrowers or Kentucky registered AMCs.
The fee study included a survey of fees from each of the one-hundred twenty (120) counties within the Commonwealth of Kentucky, and specifically six (6) different appraisal form uses and types, 1) form 1004, 2) 1004 for FHA, 3) 1004C, 4) 1025, 5) 1073, and 6) 2055.
The fee study will not be used by the board for purposes of settling any dispute of fees outside the intent of the board complying with the expectations of the Dodd-Frank Act. Also, the study did not include requests for varying complexity of assignments.
BUZZ: When the AMC Final Rules were issued did it affect any of the laws Kentucky already had in place?
DISNEY: The existing Kentucky real statutes will be evaluated by legal counsel for a determination of what, if any, statutory revisions will be required to the current statutes. It is possible that much, if not all, of the expectations and requirements can be put addressed by administrative regulation. However, it is much too early to make a definitive statement about the impact.
On behalf of the board and staff of the KREAB, we request that if anyone has questions or wishes to comment on the study, please contact the KREAB at 859-623-1658 or firstname.lastname@example.org, email@example.com, firstname.lastname@example.org or email@example.com.
Have any comments or would you like to submit content of your own? Email firstname.lastname@example.org