We are considering including a section on reconsideration of value, and the fees entailed, in our Mortgage and Consumer policies. Can you share what stance or verbiage your institution is using? Have you made or considering making changes?
Thank you.

If this can be considered a change in circumstances, we can pass along the fee. Agree?

I guess my question is what additional fees? What fees associated with a ROV are you considering? Since they retain the right to request a ROV, would not additional fees represent a possible chilling effect?

Borrowers can point out, for example, factual or other errors or omissions, inadequate comparable properties, or provide evidence that the appraisal was influenced by prohibited bias.

This is more than the borrower just not liking the value. If there are factual errors, you go back to the original appraiser and request reconsideration. If the appraiser made mistakes, there should be no additional charges to reassess, as the original appraisal was deficient. This should be built into your engagement letters.

This process does not involve just calling another appraiser up and getting a second appraisal. In order to get a second appraisal, you would have to deem the first appraisal unacceptable to the bank. If you deem it unacceptable, do you plan on charging the borrower for the first appraisal? Sounds like a UDAAP to me.

it sounds like you are looking for a reason to pass along a fee solely to generate additional fee income; i'd strongly caution you against that, based on current regulatory oversight and how frequently "fees" are being mentioned these days.

if i've misunderstood your post, then apologies.

Not just the fee income guidance. The recent push against bias in appraisals has highlighted access to ROV procedures (see links below). Charging a fee for a legitimate reconsideration of value sounds like an absolutely terrible idea that's going to expose you to UDAAP and fair lending criticism. If this was already your practice, and you are just formalizing it in policy, then it might be a good time to change your practice. Appraisers shouldn't be charging you a fee for this, and you certainly shouldn't be collecting one for yourself.

https://www.consumerfinance.gov/abo...gh-the-reconsideration-of-value-process/

https://files.consumerfinance.gov/f...e-of-residential-real-estate_2023-06.pdf

Thank you all very much for your thorough responses. The department(s) want to pass the fee, but we (compliance) feel that is not a good idea - for the reasons stated above. Much appreciated!