Do appraisal forms and documents need more transparency? At least one trade group says yes. The ""Appraisal Institute"":www.appraisalinstitute.org/ joined together with other organizations to petition the ""Consumer Financial Protection Bureau"":www.consumerfinance.gov/ for stronger buyer communication when it comes to information about appraisal costs and settlement forms.[IMAGE]
Teaming up with the ""American Society of Farm Managers and Rural Appraisers"":www.asfmra.org/, the Appraisal Institute wrote a letter to the CFPB calling for enhanced borrower-related measures in appraisal documentation. Specifically, the letter delivered to the government group asked for the separation of appraisal fees from administration and processing fees on settlement forms given to consumers when purchasing a property.
In its joint letter, the Appraisal Institute noted, ""We see no consumer benefit with continuing to bundle two separate services and not fully disclosing such information to borrowers. We urge the CFPB to revise these forms with a separate line for[COLUMN_BREAK]
Appraisal Management (or management fees in total) as Congress authorized last year when it enacted the Dodd-Frank Act.""
Additionally, the group requested that the CFPB increase buyer transparency ""by requiring full disclosure of costs incurred for appraisal services and costs for appraisal management services."" The Appraisal Institute went on to say, ""We believe that consumers deserve to know who is providing services relative to their loan and how much was paid.""
The recent letter comes in response to the suggested forms that would be issued to borrowers, which currently combines appraisal and appraisal management fees. The groups filing the document with the CFPB fears that those purchasing homes won't clearly understand the difference between the fees charged by appraisal management companies for administrative services an the actual cost incurred in the appraisal itself.
Within the letter, which included research from the ""National Association of Realtors"":www.realtor.org/, the groups made a nod to the rising costs borrowers are paying for appraisals, despite an estimated 40 percent reduction in reported appraiser fees for those in the field.
The Appraisal Institute also commented on the CFPB's special role in housing, stating, ""The CFPB... has a unique opportunity to improve transparency for borrowers by requiring full disclosure of costs incurred for appraisal services and costs for appraisal management services... we believe that consumers deserve to know who is providing services relative to their loan and how much was paid. This is the spirit of transparency and the core presumption with development of a consumer disclosure form.""