Consumer Financial Protection Bureau Considering Mandatory Disclosures

Did you know that the appraisal fee that you pay when you refinance your home may not even go to the appraiser? The new Consumer Financial Protection Bureau (CFPB) is considering whether or not to mandate that homeowners be informed of where that money does go in order to prevent abuse of these funds in the future[1]. The CFPB fears that lenders may be taking substantial portions out of appraisal fees and keeping them for themselves or directing them to management companies, something that could be affecting the caliber of your appraisal. Given that the National Association of Realtors (NAR) reports that 70 percent of its members are reporting that appraisal fees have jumped in the past year by as much as $100, you definitely want to make sure that the money is going toward good appraisals rather than lining a management company’s pocket.

In fact, one past chairman of the Florida State Appraisal Board has gone so far as to say that in today’s real estate market, “the borrower receives no benefit” from appraisal management services. He accused lenders of simply using the services to generate additional money in fees that could be paid to an affiliated management service while “this business arrangement is concealed from the consumer/borrower and the charge is misrepresented as an appraisal fee on the HUD-1,” he said. The CFPB could potentially address this problem by adjusting the types and number of disclosures required on HUD-1 settlement forms.

Do you think that appraisers are getting paid their fair share? What has your experience been with appraisal fees in the past year?

*God Speed*
TLD Investments LLC
http://www.tldinvestmentproperties.com

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