I am happy to report that appraisals are coming in at sales price for Palos Verdes homes that I have sold this past year. After the new Fannie Mae appraisal changes, we were all experiencing appraisers from out of the area being assigned to Palos Verdes real estate appraisals and they were coming in low as they did not know the area. This was true for both Palos Verdes homes sales and refinances.
Yesterday, a LA Times article regarding appraisal fee disclosure discussed the issue of who is actually getting paid for these new higher priced appraisals and where the appraisers are coming from. Why would you care about that? Because, the appraisers are sometimes getting paid only half the fee (and to find appraisers who will work for that lower fee, they were coming from out of the area) “…while the balance flows to an enterprise you have never heard of — an appraisal management company — that assigns the job to the appraiser. That management company, in turn, may be a wholly owned by or in a joint venture or affiliate relationship with your lender, which may be pocketing a significant portion of your appraisal dollars.” Click here to read entire article.
Now the Consumer Financial Protection Bureau may require the appraisal fee be broken down to indicate how much is actually going to the appraiser and how much the appraisal management company is taking. A decision should be made before summer.