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#1933114 - 06/17/14 02:17 PM Appraisal Review Fee
Reg Booster Offline
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Joined: Aug 2010
Posts: 106
Midwest
If we charge a fee (for example, $100) on top of the $400 appraisal fee that is distributed to a third party appraiser for reviewing the appraisal to identify it meets all USPAP requirements - would we consider that additional fee of $100 a finance charge? I was thinking we would; however, the commentary for 227.4(c)(7) states "the cost of verifying or confirming information in connection to the item is also excluded".

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#1935738 - 06/26/14 03:16 PM Re: Appraisal Review Fee Reg Booster
Reg Booster Offline
100 Club
Joined: Aug 2010
Posts: 106
Midwest
bump

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#1948914 - 08/05/14 12:47 PM Re: Appraisal Review Fee Reg Booster
complyorelse Offline
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Joined: Nov 2007
Posts: 448
U.S.
I have the same question and have seen mixed answers. One company has a chart of fees published and it states the appraisal review fee is not a FC. However, there is a BOL thread from 2008 that states an appraisal review fee would be a FC.

Any help would be appreciated. Thank you.

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#1948921 - 08/05/14 01:09 PM Re: Appraisal Review Fee Reg Booster
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
12 CFR 1026.4(c)(7) Real-Estate Related Fees

1. Real estate or residential mortgage transaction charges. The list of charges in §1026.4(c)(7) applies both to residential mortgage transactions (which may include, for example, the purchase of a mobile home) and to other transactions secured by real estate. The fees are excluded from the finance charge even if the services for which the fees are imposed are performed by the creditor's employees rather than by a third party. In addition, the cost of verifying or confirming information connected to the item is also excluded. For example, credit-report fees cover not only the cost of the report but also the cost of verifying information in the report. In all cases, charges excluded under §1026.4(c)(7) must be bona fide and reasonable.

I'm not sure which BOL thread you are referring too, but it is either taken out of context or it is wrong.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1948968 - 08/05/14 02:29 PM Re: Appraisal Review Fee Reg Booster
complyorelse Offline
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Joined: Nov 2007
Posts: 448
U.S.
This is the post I was referring to.

Originally Posted By: Dan Persfull
This is the exact language from the Commentary:

In addition, the cost of verifying or confirming information connected to the item is also excluded. For example, credit report fees cover not only the cost of the report, but also the cost of verifying information in the report. In all cases, charges excluded under §226.4(c)(7) must be bona fide and reasonable.

There's a difference between "reviewing" and verifying and confirming the information.

If you are charging a fee for reviewing the credit report but you are not verifying or confirming the accuracy of the information then that fee is not excluded from the finance charge.

The only way your third party "reviewer" could be verifying and confirming the accuracy of the information is for them to do their own appraisal and then compare them side by side.

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#1948979 - 08/05/14 02:37 PM Re: Appraisal Review Fee Reg Booster
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
I guess I would have to disagree with Dan - of course you are pulling something up from 6 years ago. Only he can say if he still feels the same.

USPAP Compliance, Appraisal Review – Standard 3

In developing an appraisal review assignment, a reviewer must identify:
•The reviewer’s client and intended users
•The intended use of the review
•The purpose of the assignment
•The subject of the appraisal review assignment
•The date of the review
•The property and ownership interest appraised (if any) in the work under review
•The date of the work under review
•The effective date of the opinion in the work under review
•The appraiser(s) who completed the work
•The scope of work to be performed in the appraisal review

Further, the reviewer must develop opinions of:
•The completeness of the material under review within the scope of work applicable in the assignment;
•The apparent adequacy and relevance of the data and the propriety of any adjustments to the data
•The appropriateness of the appraisal methods and techniques used and develop the reasons for any disagreement
•Whether the analyses, opinions, and conclusions in the work under review are appropriate and reasonable and develop the reasons for any disagreement.

If that is not verifying or confirming, I'm not sure what is.......
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1948992 - 08/05/14 02:46 PM Re: Appraisal Review Fee Reg Booster
complyorelse Offline
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Joined: Nov 2007
Posts: 448
U.S.
OK. I really appreciate the feedback.

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#1948995 - 08/05/14 02:49 PM Re: Appraisal Review Fee Reg Booster
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
I guess I would have to disagree with Dan - of course you are pulling something up from 6 years ago. Only he can say if he still feels the same.

Six years ago I would defend that opinion but with the changes and review requirements from the Interagency Appraisal and Evaluation Guidelines issued in Dec 2010 I would not today.
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#1949463 - 08/06/14 11:54 AM Re: Appraisal Review Fee Reg Booster
complyorelse Offline
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Joined: Nov 2007
Posts: 448
U.S.
Thank you.

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