New Appraisal Rules Rankle Appraisers

Critics say new rules from Fannie Mae and Freddie Mac, which force lenders to use appraisal management companies, are raising appraisal costs for home buyers by as much as 20 percent to 30 percent. The new rules also allow for fees like “no show” penalties if the borrower misses an appointment with the appraiser. There also are extra charges for mortgages greater than $500,000. Appraisal costs under these rules must be paid for up-front with a credit or debit card rather than deferred until closing. Meanwhile, experienced appraisers say they are being forced to work for less while appraisal management companies are picking up the lion’s share. Appraisal management companies say that analysis isn’t fair. Rich Kuegler, a vice president at MDA Lending Services Inc., a national appraisal management company, says new fees compensate his and similar firms for "processing and administrative" duties that used to be handled by mortgage brokers and lenders. He also says that appraisers can expect greater volume working for an appraisal management company, which should compensate for lower fees.

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