Ala. Admin. Code r. 780-X-17-.21

Current through Register Vol. 43, No. 1, October 31, 2024

Section 780-X-17-.21 - Appraiser Independence and Customary and Reasonable Fees

(a) The Board, at its discretion, may contract with an objective third party, such as an educational institution, to develop a schedule of customary and reasonable fee rates of compensation for one to four residential appraisals prepared for consumer credit transactions secured by the principal dwelling of the consumer. The Board shall determine the content and scope of the survey. In no instance shall a survey include fees paid by appraisal management companies to appraisers. The results of this survey may be used as a guideline for appraisal management companies to comply with subsection (b) of this section. The Board shall consider annually consider whether a new survey should be repeated.

(b) An appraisal management company shall compensate appraisers at a rate that is customary and reasonable for appraisals being performed in the market area of the property being appraised in accordance with Section 129E(a) through (i) of the Truth in Lending Act, 15 U.S.C. § 1639e(a) through (i) and regulations adopted pursuant thereto. For purposes of this rule, geographic area may be defined by zip code, city, county, metropolitan statistical area, or a combination of contiguous counties in a non- metropolitan statistical area.

1. Evidence for such fees may be established by objective third-party information such as government agency fee schedules (including any survey conducted by the Board in accordance with section (a)), academic studies, and independent private sector surveys.

2. An appraisal management company electing to compensate fee appraisers on any basis other than an established fee schedule as described in subsection 1. shall, at a minimum, review the following factors on each assignment made, and make appropriate adjustments to recent rates paid in the relevant geographic market necessary to ensure that the amount of compensation is reasonable:

(i) the type of property for each appraisal performed;

(ii) the scope of work for each appraisal performed;

(iii) the time in which the appraisal services are required to be performed;

(iv) fee appraiser qualifications;

(v) fee appraiser experience and professional record; and

(vi) fee appraiser work quality.

3. An appraisal management company shall maintain written documentation that describes or substantiates all methods, factors, variations, and differences used to determine the customary and reasonable fee for appraisal services conducted in the geographic market of the appraisal assignment.

4. An appraisal management company shall maintain records of how it determined the customary and reasonable rate of compensation paid for each appraisal assignment.

(c) An appraisal management company shall separately state to the client all of the following:

1. The fees paid to an appraiser for appraisal services.

2. The fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser's services.

(d)

1. An appraisal management company shall not prohibit any appraiser who is part of an appraiser panel from recording the fee that the appraiser was paid by the appraisal management company for the performance of the appraisal within the appraisal report that is submitted by the appraiser to the appraisal management company.

2. An appraisal management company shall not include any fees for appraisal management services performed by the company in the amount the company reports as charges for the actual completion of an appraisal by the appraiser.

Ala. Admin. Code r. 780-X-17-.21

Adopted by Alabama Administrative Monthly Volume XXXIV, Issue No. 11, August 31, 2016, eff. 9/11/2016.

Author: Dennis Key and Lew Watson, REAB and Scott DiBiasio, Appraisal Institute

Statutory Authority:Code of Ala. 1975, §§ 34-27 A-54, 34-27A-57.