Too often we receive complaints from Buzz subscribers who say no one is standing up for appraisers in the battle over Customary & Reasonable Fees. Well, we are excited to tell you that someone has emerged who is trying to do something to combat unreasonable fees. Joshua Walitt has spearheaded a campaign to create an online petition to send to the Consumer Financial Protection Bureau to have them re-investigate and evaluate customary and reasonable fees and how the laws are being followed. We sat down with Josh to discuss this petition and find out how appraisers can help launch this into the foreground for the CFPB.
Buzz: Josh, can you tell us a little about your background so far in the appraisal industry?
Josh: I am a Certified Residential Appraiser in Colorado, VA and FHA approved, and speaker to lending and real estate groups. I have been a Hearing Officer for the Mesa County Board of Equalization, and served on Colorado's "AMC Rulemaking Task Force" in 2013. I also write blogs and articles for various publications, and will soon be writing a column in our local newspaper reaching western Colorado. I am currently a Candidate for SRA Designation with the Appraisal Institute.
Buzz: Joshua, what do you think is the single most important issue for appraisers today?
Josh: There are a lot of issues affecting the appraisal industry today, but one of the biggest is Customary & Reasonable fees. The payment of unreasonably low fees by predatory clients has the potential of hurting not just appraisers, but the financial industry as a whole. Everywhere we look - HUD, the States, Interagency Guidelines, Fannie Mae, Dodd-Frank - there have been moves to set it right, so that fee is not the determining factor in engaging appraisers. I've thought about this for years and am vocal about appraisers charging what we are worth, but now that the CFPB adopted the Federal Reserve C & R Rules virtually word-for-word, I think it is time appraisers set the record straight from a regulatory perspective.
Buzz: How did this petition come about?
Josh: I originally wrote a lengthy letter, which was just too complicated and not focused enough. I sought out feedback from a variety of folks and solicited the help of some industry veterans to help me craft a C & R Petition. I think hosting it on this site can help to reach a large audience. Let me be clear: I know there is no simple solution, and a petition alone is not the only move appraisers can be making. But revisiting, correcting, or repealing the C & R Rules is one important step on the regulatory side of this issue.
Buzz: How else are appraisers battling low fees?
Josh: I think several fronts that need to be addressed are knowing how much our time is worth and looking at the time spent on each appraisal, the scope of work, quality, and other factors. And my favorite, which I use every day: Fee too low? Just say 'no'. I don't accept mini-fees in my business.
Buzz: What if C & R is not enforced?
Josh: Well, to begin with, that means the intent of Dodd-Frank is being thrown out the window. But beyond that, low fees are driving good appraisers out of the business and out of the lending appraisal arena altogether.
Buzz: You've been invited to speak at Valuation Expo this year. That's a big honor. What are you going to talk about?
Josh: Overall, my talk will cover various compliance-related issues as they relate to our everyday work - so sort of a discussion on practical applications of compliance in our work. Customary and Reasonable Fees will obviously be an item I cover! I don't want to step up to the podium and speak to anecdotes. I want to be able to point to the petition with solid evidence that appraisers are united on this very important issue. I encourage every appraiser to take a few minutes to read the petition and pass it along to your peers. With a strong response I believe the appraisal community can and will have a voice.
Buzz: Well, that is one step. But then how would C & R be determined?
Josh: There will be a link in the petition to participate in the C & R Survey by Clearbox. When you combine the petition with survey results it sends a powerful message to the regulators. In 2010 when I first looked into the C & R Rules issued by the Federal Reserve, one of the first justifications shared with me regarding the loophole was that there were no fee surveys available to lenders and AMCs, which even at that time was not correct. Together, with other fee studies out there in the industry, there will be no more claims that there is insufficient data or that there are no comments from the appraisal community.
Buzz: How does the petition work?
Josh: It's really a simple process: type your name and a few other items. It asks for an email for verification, but that doesn't appear on the site or to the public.
Buzz: Thank you for discussing this online petition with us and the Buzz readers.
Josh: Thank you for helping host the online petition. My hope is that appraisers across the country will take just a moment be part of the solution to this problem.
Buzz: Appraisers who would like to sign the online petition can CLICK HERE. This process should take less than 30 seconds and could help improve your livelihood drastically in the future.
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