On August 25, 2010, The Title/Appraisal Vendor Management Association (TAVMA) sent a letter to the Federal Reserve Board (FRB) requesting that implementation of the customary and reasonable fee provision in Title XIV of the Frank-Dodd act be delayed. The fine folks at Appraisal Scoop have a copy of the letter here.
In their letter, TAVMA states that “it is unclear whether the ‘customary and reasonable’ provision should be adopted in the 90 day interim final regulations.” TAVMA believes this portion of the legislation should not be implemented in the 90 days because it is not an appraisal independence requirement. Further, “customary and reasonable” is a vague standard lacking any coherent definition.
In their letter, TAVMA seems to support the reasonable and customary fee language used by the US Department of Housing and Urban Development (HUD) noting that the agency permits fee flexibility depending on several variables. TAVMA otherwise believes there are “no readily available authoritative surveys to gauge what constitutes a customary and reasonable fee from one jurisdiction to the next.” While one might consider the US Department of Veterans Affairs (VA) an authority, TAVMA argues that this appraisal fee schedule produces fees higher than many consumers expect to pay in a mortgage transaction.