Class Action Over AMC Fees + Key Valuation Updates
In this issue:
- Lawsuit Filed Over AMC Fees: A class action challenges hidden appraisal costs.
- IVS Now Free: 2025 standards available for global access.
- AVM Rule Faces Repeal: Congress moves to overturn quality control standards.
Insights
Class Action Lawsuit Filed in California Over Hidden AMC Fees
A class action lawsuit has been filed in California against a major mortgage lender and two appraisal management companies (AMCs), alleging that their failure to disclose AMC fees to consumers constitutes unfair and deceptive business practices. The lawsuit claims that borrowers were misled about the true cost of appraisals, as the AMCs service fees were bundled into appraisal charges without proper disclosure.
The Appraisal Institute has long advocated for greater transparency in appraisal fees, supporting policy changes that would require lenders and AMCs to clearly disclose the portion of the appraisal fee that goes to the appraiser versus the AMC. The organization has pushed for reforms to ensure consumers understand what they are paying for and to prevent deceptive pricing practices that could undermine trust in the valuation process.
The plaintiffs in the lawsuit in Lacey Timmens v. Clearcapital.com, Inc. Core Valuation Management, Inc. and Rocket Mortgage, LLC seek damages and injunctive relief to prevent lenders and AMCs from engaging in similar practices in the future.
Your Benefits
IVS Now Available for Free
The latest edition of the International Valuation Standards (IVS), effective Jan. 31, 2025 is now freely accessible from the IVSC website homepage. The International Valuation Standards Council adopted the new distribution policy to enhance accessibility and support the adoption of IVS among a broader range of stakeholders. The IVS is currently adopted in more than 70 countries.
The International Valuation Standards (IVS) introduce several key updates pertinent to tangible assets and real property. For example, Valuation Framework (IVS 100) was restructured to include new sections on Valuer Principles, Valuation Process Quality Control, and the use of Specialist or Service Organizations. The emphasis is on ensuring valuations are conducted objectively, transparently, and without bias, with documented quality control processes. Further, the Real Property Interests (IVS 400) standard was restructured to align with the updated General Standards, providing clearer guidance on the valuation of real property interests. The revisions aim to enhance the applicability and clarity of valuation approaches specific to real estate assets.
Download a free copy of the IVS at www.ivsc.org/#access-ivs. Prior versions of the IVS are available to Appraisal Institute members as an IVSC sponsor organization here using the code: appraisalinsti.
Free Webinar on Institutional CRE
Our colleagues at the Counselors of Real Estate are hosting a free webinar on February 27 focusing on institutional commercial real estate valuation topics. Paula Thoreen, MAI, CRE with Cushman and Wakefield and Chair of the NCREIF Valuation Committee will share the dais with representatives from MSCI, Inc., RICS and Ballard, Inc. to discuss institutional commercial real estate trends.
Advocacy Updates
Resolutions Introduced to Overturn AVM Quality Control Standards
Congressman Andrew Clyde (R-GA) introduced multiple resolutions on Feb. 12 that would overturn the AVM Quality Control Standards Rule finalized by the Federal Banking Agencies last August. Representative Clyde introduced a resolution covering each Federal Banking Agency that was included in the ruling, and each would need to pass Congress to remove the ruling. The resolutions would utilize the seldom used but powerful Congressional Review Act to disapprove the final rule.
The AVM rule was mandated by the Dodd-Frank Act but became a core element of the PAVE Task Force's Action Plan. The resolutions appear to be part of a broader effort by the Trump Administration to reverse Biden Administration initiatives. Rep. Clyde's resolutions have been referred to the House Financial Services Committee, although it is likely the deadline has passed for any such resolution to be enacted.
GSEs offer UAD 3.6/Forms Redesign Training for Lenders
Fannie Mae and Freddie Mac are jointly sponsoring lender training programs for the Uniform Appraisal Dataset (UAD) 3.6 and Forms Redesign. Three upcoming webinars intend to help lenders prepare for the UAD 3.6 and Forms Redesign. Attendees will learn:
- What the UAD 3.6 and Forms Redesign provides and key benefits
- Features and benefits of the redesigned Uniform Residential Appraisal Report (URAR)
- How to leverage available resources to prepare – both operationally and technologically
- Important dates on the transition timeline
- Benefits of participating in the Limited Production Period
Registration for each lender webinar is found below:
Thursday, Feb. 27 – 1 p.m. ET
Tuesday, Mar. 4 – 2 p.m. ET
Thursday, Mar. 13 – 3 p.m. ET
Real Estate Horizons
Stay updated and check out links to the latest major real estate industry stories!
More Opportunities to Learn
Search the latest educational offerings! Find National and Chapter-sponsored classroom, synchronous, and online opportunities.
Our Community
Support Those Impacted by Recent Natural Disasters
The Appraisal Institute's Education & Relief Foundation provides emergency financial assistance to individuals impacted by a disaster or emergency.
Until next week,
Team Appraisal Institute
