The American Guild of Appraisers has filed a Freedom of Information Act (FOIA) request with the Federal Reserve Board seeking a wide variety of documents related to the regulations on customary and reasonable compensation of fee appraisers that were issued by the board in October 2011.
‘It is clear that appraisal management companies have interpreted rules issued by the Fed as permitting practices that result in real estate appraisers being compensated at levels that are far below 'reasonable and customary fees' as required in the Dodd-Frank Act,’ says Peter Vidi, president of the guild. ‘We want to learn whether the Fed intended this result and, if so, why. We hope that these documents will shed light on why the board chose to create two conflicting 'safe harbors' for compliance with these regulations – one of which permits appraisal management companies to rely upon the considerably lower rates that they themselves pay appraisers in determining what compensation is considered 'customary and reasonable' in direct violation of the Dodd-Frank law.
‘We are hopeful that these documents will allow us to better understand the seriousness with which these issues have been considered and the potential for future corrective action,’ Vidi adds.
The FOIA request was filed by the law firm Garvey Schubert Barer, which has been retained by the guild to explore all avenues including possible litigation to correct a regulation that is in violation of the Dodd-Frank Act.