Appraisers board says its ‘hands are tied’ on AMC dispute

After hearing complaints Monday from residential real estate appraisers who say third-party management companies are taking a big bite out of their fees, the Louisiana Real Estate Appraisers Board has taken no action, and one local appraiser says any change will likely have to come at the hands of state legislators. Federal legislation separating the appraisal process from lenders and borrowers to avoid conflicts of interest has led to the formation of appraisal management companies, or AMCs. The law says the companies should pay appraisers—at a minimum—a rate that is “customary and reasonable” in their market, or face penalties of $10,000 a day. But some appraisers say the phrase “customary and reasonable” is not sufficiently defined in state law, which leads to inconsistent rates. Appraiser Joseph Mier presented the board with information compiled from surveys of area appraisers. He says some AMCs “are not adhering to the Dodd-Frank bill,” but “there’s not much the board can do, because they don’t advocate for one group or another. They protect the public.” Still, Mier says, the board is “looking into matters. We gave them information and they gave us information.” Anne Brassett, administrative assistant of the board, says it “cannot get involved in setting a reasonable fee” because the board does not advocate policy positions. She says board members told presenters that they could “try to get bankers and lenders to press for legislation. But our hands are tied.” Though no date has yet been set for further action, Mier says efforts will continue. “We’re looking at changes from a legislative standpoint,” he says. “But that’s in April.” —Ian McGibboney