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CFPB's Rural or Underserved Provisions-Added Fee

Answered by: 
John Burnett
Randy Carey

Question: 
An Appraisal Management Company, (AMC) is increasingly charging an additional fee of $150 and attributing its justification to the CFPB's Rural or Underserved provisions. My understanding and research does not support the AMC's claim allowing this added fee. I have spoken to others in the business and they have no experiences with such a fee, short of USDA-RD fees. Is this particular AMC correct in how it is treating these properties while citing the CFPB?
Answer: 

by John Burnett:

I don't see a connection between the cost of an appraisal (or of services of an AMC) and the provisions in the CFPB's regulations that involve loans made in rural or underserved geographies. The situation smells of a provider that's trying to justify passing its fee. You can always challenge the AMC's invocation of the rural/underserved provisions, by asking how they affect the need for, or allow, a surcharge. Or you can decide to find a different provider.

Answer: 

by Randy Carey:

I agree with John - smacks of potential redlining issues to base loan fees solely on geographic location of the property barring justification for the additional costs.

First published on 01/20/2019

Filed under: 
Lending
Filed under lending as: 
Appraisal

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