Have apprasial costs increased in recent years?

B

Prior to the financial crisis in the early 2000s, lenders could place an appraisal order directly with any licensed appraiser. The Dodd-Frank Act of 2008 instituted Appraisal Independence Requirements (AIRs) and created more separation between lenders and appraisers. The AIRs were designed to prevent undue influence and conflicts of interest, or underhandedly inflate appraisal values. AIRs also instituted a requirement for “reasonable and customary” fees and allowed violators to be prosecuted and fined. Since lenders were not regulating fees being charged by appraisers, they faced the risk of violating the new regulations and facing prosecution. As a result, lenders turned to third parties called Appraisal Management Companies who collect and process appraisal orders, assign the orders to a larger panel of appraisers, and regulate the fees they charge. While the AIRs were intended to protect the consumer, their implementation introduced another hand in the cookie jar and added cost to the appraisal process. These added costs were ultimately passed on to the consumer and resulted in increased appraisal costs.