Prospective homebuyers should receive as much transparency as possible about the fees associated with their home purchase. Therefore, they should receive separate estimates of the appraisal fee and appraisal management fee. Preventing creditors from charging customers the amount disclosed on the LE will protect customers from unscrupulous creditors who may try to raise appraisal management fees on customers midway through the loan process in order to make an extra buck.
This bill would effectively lock in appraisal management fees at the time of a mortgage application, and while that’s good for prospective homebuyers, it increases pressure on lenders and AMCs. This could lead to one of two undesirable situations: either lenders and AMCs lose money if they underestimate their appraisal management fees or lenders and AMCs respond to this bill by raising appraisal management fees to give themselves leeway on the fees, leading to higher costs for potential homebuyers.