The American Guild of Appraisers (AGA), a national organization of real estate appraisers that is an affiliate of the AFL-CIO's Office and Professional Employees International Union, has retained a law firm as part of an effort to overturn recent federal regulations that cut the fees that appraisers are paid to perform appraisals.
‘If an appraiser is not paid a reasonable and customary fee and forced to comply with unrealistic turn times for an appraisal assignment, then the quality of the work product suffers,’ says Peter Vidi Jr., president of the AGA. ‘We are seeing unprecedented numbers of seasoned appraisers leaving the market, and those that remain are forced to cram more appraisals into the workweek in order to earn a living. The result inevitably will be less reliable appraisals and another round of poorly underwritten loans that could help to destabilize a fragile economy. The AGA feels that it is time to take a stand for the professional real estate appraiser.’
‘From a legal standpoint, it's quite clear that Congress intended that appraisers be paid reasonable and customary fees and that most appraisal management companies are simply violating the law,’ says Matt Schneider from Garvey Schubert Barer, the law firm retained to represent the AGA. ‘Unfortunately, the Federal Reserve has adopted regulations that appraisal management companies (AMCs) are interpreting as permitting and validating their practice of paying appraisers a fraction of what is a reasonable and customary fee. Regrettably, so far the Fed has been unwilling to take any action to ensure that both its regulations and the behavior of AMCs comply with the law.’
Schneider adds that his firm is reviewing all of the facts and the law and will be advising the AGA as to what options are available for legal action, which may include a lawsuit against the Federal Reserve Board.