The Title/Appraisal Vendor Management Association (TAVMA), the trade association that represents the nation’s largest appraisal management companies (AMCs), released a statement Monday disputing the findings of a recently-released analysis of appraisal fees.

As DSNews.com previously reported, a la mode, Inc., a privately-owned provider of appraisal-related technology and services, in February released the first public edition of the Appraisal Fee Reference (AFR), a national analysis of independent appraiser fees. But TAVMA says the study is misleading.

Appraisers’ fees have recently come under scrutiny due to the guidelines implemented by the Federal Housing Administration (FHA), requiring participating lenders to ensure that appraisers are paid “reasonable and customary” fees. According to a la mode, the AFR can be used to objectively determine what a customary fee is, making it easy to decide if an appraiser is receiving the correct payment.

TAVMA disagrees. According to the trade association, the AFR intentionally excludes AMCs from its analysis, thereby omitting two-thirds of all appraisals done in the United States. This, TAVMA says, is causing confusion in the industry.

“a la mode is clearly catering to its customer base and trying to suggest that the only fees that should be considered in making the determination as to what is ‘reasonable and customary’ should be fees paid directly from lenders to individual appraisers,” TAVMA said in its statement. “This is like saying hardware prices are only determined by mom-and-pop hardware stores, and that Home Depot and Lowe’s don’t exist.”

Jeff Schurman, executive director of TAVMA, said the a la mode analysis attempts to redefine what is reasonable and customary using its analysis that “cherry picks” results, which implies that a small, sub-group of the industry should dictate the industry-wide prices. He explained that

the FHA says reasonable and customary should be defined by the entire marketplace, and that isn’t the case in a la mode’s study.

“There is a strong argument to be made that AMCs, as the major provider of appraisal services in the country and the leading source of business for more than two-thirds of all independent appraisers, are in effect the standard for what is reasonable and customary,” Schurman said. “The a la mode analysis may be of some use to the decreasing number of non-AMC aligned appraisers who do boutique ‘retail’ business or non-mortgage work for attorneys handling estate and divorce cases, but it distorts what is happening in the market and what fees should prevail for FHA work.”

DSNews.com received a response from a la mode regarding TAVMA’s accusations.

“We’re dismayed and shocked by TAVMA’s response to our Appraisal Fee Reference analysis, especially in terms of their statements regarding our company,” said Dave Biggers, chairman of a la mode. “In the 25 years that a la mode has been serving the lending and real estate industries, I can’t recall a single incident in which a trade organization has singled out and attacked an individual company in this manner.”

Biggers said TAVMA could have simply stated that they don’t agree, or they could have provided an alternative analysis and debated the issue in an objective manner. He believes the trade association’s claims that a la mode provided misleading information went too far.

On a broader front, Biggers said it is interesting that TAVMA very clearly makes the case that their members are “the major provider of appraisal services in the country” and that independent appraisers are “a small, subgroup of the industry.” He said that’s at odds with TAVMA’s publicly-stated position that AMCs are not appraisers. Biggers cited a position paper released by TAVMA in January 2009, which stated that “AMCs are not appraisers, nor do they perform appraisals.”

Comparing independent appraisers to “mom-and-pop hardware stores” and AMCs to larger, discount hardware chains such as “Home Depot and Lowes” implies that appraisers and AMCs are the same type of entity, simply differing in scale, Biggers said.

“If TAVMA’s AMC members are indeed simply large discount appraisal shops, as they appear to suggest repeatedly here, they would be subject to the very strict standards imposed by state appraisal boards,” Biggers concluded. “I’m confident that the various state regulatory boards will be intrigued by their latest public statements.”