Dear Director Pulte,

Executive Order 14393, “Promoting Access to Mortgage Credit,” covers a lot of ground: bank capital, loan servicing, digital closings, enforcement. Appraisal gets one section. Section 6(a) names six regulators (the Federal Reserve, the CFPB, the NCUA, the FDIC, the OCC and FHFA) and tells them what to consider.Full order ↗

The key words are “shall consider.” The order sets no deadline for Section 6. It changes no rule by itself. Section 6(b) gives HUD and the VA a similar list: line up FHA and VA appraisal standards, separate safety repairs from cosmetic ones, and allow more repairs after closing.

Telling agencies to consider something invites everyone to lobby them. The letters that followed are the best public record of what each side wants.

The Appraisal Institute did not oppose the order. Its statement thanked the Administration for focusing on affordability. Then it defended the appraisal itself.Statement ↗

The statement also answered the order’s point about artificial intelligence: appraisers “are also actively integrating new technologies, including artificial intelligence, to strengthen valuation analysis while maintaining strong safeguards for privacy, data security, and professional independence.”

By May the tone was more urgent. In a message to members, Acquaro-Mignogna wrote that the order “could carry wide-ranging implications for residential and commercial appraisers alike, which makes your voice more important than ever,” and urged them to attend the Institute’s Legislative Day “so we can ensure appraisers have a seat at the table.”May 4 message ↗

The letter that gives this article its title is three pages long. It is signed by the American Bankers Association, America’s Credit Unions, the Broker Action Coalition, Community Home Lenders of America, the Housing Policy Council, the Independent Community Bankers of America, the Mortgage Bankers Association and the National Association of Mortgage Brokers.Read the letter ↗

It starts by explaining why FHFA is the right agency to ask: “FHFA and the GSEs are in an optimal position to contribute to the transformation of appraisal policies, practices, and processes.” Then it asks for three things.

One thing is missing. The letter quotes the order’s line on “simplifying appraiser qualification requirements” but recommends nothing about it. One signer spoke to that in the press. Brendan McKay, co-founder of the Broker Action Coalition, told National Mortgage News that property scanning would help recruit appraisers “in addition to lowering some of the too high requirements to become an appraiser in the first place.”National Mortgage News, June 1 ↗

This was the second letter that month. MBA’s public letter log lists a May 14 joint letter to HUD “Supporting the Modernization of FHA appraisal.” We could not get the text of that letter, so we cite only the log entry.MBA letter log ↗

Most of this record is people asking for things. Mortgagee Letter 2026-10 is different: an agency acted, and named the order as its reason. Starting immediately, HUD made appraisal field reviews optional in a lender’s quality control, “removing the requirement for Mortgagees to obtain appraisal field reviews on at least 10 percent of origination and underwriting QC reviews.”Mortgagee Letter 2026-10 ↗

HUD’s reason is cost. The old requirement “resulted in significant costs for Mortgagees, which often outweighed the limited risk mitigation benefits considering the frequent use of third-party tools and appraisal desk reviews.” For appraisers who do FHA field reviews, this means lenders no longer have to order that work.

The CFPB is one of the six agencies named in Section 6(a). Its first public step under the order was about a different section. It asked the public about mortgage disclosure forms: when they must be delivered, how much fees may change after they are disclosed, and the borrower’s right to cancel a refinance. The notice mentions appraisal once. It recalls that earlier commenters found “transfer taxes and third-party appraisal fees” hard to estimate within three business days of an application.Federal Register notice ↗

That sentence was enough. By the August 10 deadline the docket held 340 comments. Title and escrow companies wrote in by the dozen. Banks, credit unions, builders, credit bureaus and ten state attorneys general filed letters. And appraisers used two of the Bureau’s general questions, about making the forms clearer, to raise a complaint that is sixteen years old.Browse the docket ↗

How we read it: we read all 101 attached filings from start to finish, about two million characters of text, plus seven comments typed directly into the form. A few attachments were duplicates, blank scans or unrelated. We did not read the other 232 typed-in comments. A docket search suggests about forty of them mention appraisal. Every docket quote below was checked by script against the filed text. The counts are ours, from regulations.gov on October 4.

The argument is about one line on two forms. A borrower’s Loan Estimate and Closing Disclosure show a single “Appraisal Fee.” When a lender orders through an appraisal management company (AMC), that number covers both what the appraiser is paid and what the AMC keeps. The fee also has “zero tolerance.” Once the lender discloses it, the borrower cannot be charged more unless something specific changes, and the lender pays any difference. The reason, as the American Bankers Association put it: “borrowers are not permitted to shop for their own appraisal provider.”

Two fights run through the docket. Appraisers and AMCs argue over whether that line should be split. Lenders argue that the cap on it should go. The two groups barely acknowledge each other.

The most detailed appraiser comment came from John S. Baldwin, SRA, AI-RRS, a Georgia certified residential appraiser and former national bank review appraiser, writing for himself. He gives the example that most appraiser comments come back to: “If, for example, a consumer is charged $800, the appraiser is paid $500, and $300 is retained for management and administration, the ordinary consumer is likely to read the $800 line as the price paid to the professional who inspected, analyzed, and signed the appraisal.”Baldwin comment ↗

He does not ask the Bureau to ban anything. “Transparency is not an attack on AMCs. An AMC that provides value should state its fee plainly.” His worry is the incentive. When the total price is fixed and bundled, an AMC that keeps the difference “has a financial incentive to increase the spread by reducing appraiser compensation.” He adds that the rules already allow the fix: “The framework already accommodates itemization; the missing element is a uniform requirement.”

The view from the doorstep

Kimberly DeFilippis, a certified residential appraiser, described how a bundled fee gets assigned: the AMC “will broadcast the potential work to appraisers in the area, choose the lowest/cheapest fee appraiser for the work and pocket the difference.” Joseph Mier, an appraiser of more than thirty years, made the consumer case: “Separate disclosure would not eliminate AMCs or restrict their use. It would simply tell consumers where their money is going.” He also warned about appraiser supply, a point lenders make too: “When compensation does not reasonably reflect that complexity, experienced appraisers often decline the assignment.”DeFilippis ↗ Mier ↗

The consolidation argument

Francois K. Gregoire, a Florida appraiser and broker with fifty years in the business, connected the fee line to AMC mergers. He wrote that “industry participants estimate that the largest five AMCs now account for roughly 30–35% of residential appraisal originations,” and that under a bundled fee “borrowers cannot see the price of appraisal management, compare it, or determine whether consolidation is increasing that charge.” He asked for four separate items, including “whether the AMC is affiliated with the creditor,” and for room for small banks and credit unions to use independent firms or their own panels “without being pushed toward a limited number of national AMCs.”Gregoire comment ↗

The research brief

The Appraisal Regulation Compliance Council, a Dallas group that describes itself as a nonpartisan academic research organization, filed the strongest version. It reports “more than 2,000 verified exhibits” and estimates that undisclosed management charges cost consumers “more than $12 billion.” Its fix is small: two entries on the forms, with a rule that would “prohibit combining the two amounts under a single appraisal label.”ARCC comment ↗

Check that estimate against ARCC’s own exhibit. The table assumes AMCs handled 80% of the appraisals in FHFA’s data from 2013 to 2023 and kept between $150 and $350 on each one. That gives a range of $6.2 billion to $14.4 billion. So the number is built on assumptions about market share and margin. The comment does not show actual margins measured across the market. DeFilippis, arguing for the same split, guessed at a management fee “of perhaps $100.”

The lawsuits

ARCC points the Bureau to three pending lawsuits by borrowers over bundled appraisal charges: Timmins v. ClearCapital.com, Core Valuation Management and Rocket Mortgage in California, Arnold v. Appraisal Nation, AMC Links and United Wholesale Mortgage in Florida, and Bernholtz v. CrossCountry Mortgage and Class Valuation in federal court in Florida. ARCC itself gives the right caution: “The allegations have not been proven.” Its argument is that changing the form now is better than “a state-by-state remedy” built by courts.

Treat the numbers with care

Several of these comments give figures we could not check. Michigan Executive Appraisals says AMCs keep “up to 84%” of the borrower’s fee. Accelerated Appraisals predicts 20 to 30% of appraisers will leave within 18 months. These are the commenters’ own figures.

ARCC adds two details. It says the VA already requires the appraiser’s invoice with the report, which shows separate disclosure can work. And it describes AMC engagement letters that forbid an appraiser from putting an invoice in the report or discussing the fee with the borrower. It attached more than twenty examples.

One appraiser went beyond the fee to the main subject of Section 6. “It is my opinion,” DeFilippis wrote, that “the GSEs have rigged the entire appraisal system in an effort to take boots-on-the-ground appraiser out of the risk evaluation process permanently, to be replaced with AVMs or other evaluation models.”

The Real Estate Valuation Advocacy Association, which represents AMCs, filed jointly with the Collateral Risk Network. Theirs is the only letter we read that explains the bundled fee from the AMC side. It defines the two parts: an “Appraisal Services Fee” paid to the appraiser, which “must meet or exceed the Customary and Reasonable (C&R) market fee,” and an “Administrative Fee” for panel management, ordering, quality control and compliance.REVAA and CRN comment ↗

Why do lenders use AMCs? The letter says many that tried to manage appraisers in-house “report the associated compliance mandates and corresponding costs to be prohibitive.” On splitting the fee line, it reminds the Bureau that it looked at this in 2013 and found a required breakout “may tend to produce information overload.” It adds: “Based on feedback from mortgage lenders, they prefer the current single line item disclosure requirement.”

But the letter’s main request is about the cap, not the single line. An appraiser’s fee can fairly go up when a property turns out to be complex, it argues, but the disclosed number cannot: “Variances from the quoted ‘Appraisal Fee’ are commonly absorbed by a lender or AMC, not the consumer.” REVAA and CRN ask the Bureau to move appraisal costs out of zero tolerance, either into the group of fees that may rise 10% in total, or into the group with no limit.

Baldwin saw that request coming and agreed with only half of it. Let the appraiser’s own fee rise without a limit, he wrote, but “this flexibility should not apply to the entire bundled appraisal charge,” because that “would transfer both professional-fee uncertainty and intermediary pricing risk to the consumer.” His answer to the 2013 overload concern: “Two adjacent lines and a subtotal would add little complexity.”

One signature is worth noticing. James R. Park, who signs for CRN, is the same former Appraisal Subcommittee director quoted later in this article arguing that the experience requirement for new appraisers “fails at every level.” This debate is not simply appraisers on one side and everyone else on the other.

For lenders the appraisal fee is a number they must promise before they can know it. The Mortgage Collaborative, a cooperative of 210 lenders, explained why: “Under TRID, creditors cannot order an appraisal and have it paid by a consumer until the consumer has communicated an Intent to Proceed.” The estimate comes first, the order second, the real price third.The Mortgage Collaborative ↗

National trade groups

The national trade groups made the same point. The Mortgage Bankers Association: “Appraisal fees should not be subject to a 0% or 10% tolerance threshold.” The fee “may be higher depending on the appraiser assigned and market conditions.” The Housing Policy Council asked that appraisal fees “be reclassified to have no tolerance caps.” The American Bankers Association listed what lenders end up paying for: “Treating that early estimate as a binding price guarantee forces lenders to absorb increases caused by tax authorities, settlement agents, appraisal management companies, appraisers, appraiser shortages, property complexity, or local recording requirements.”MBA ↗ HPC ↗ ABA ↗

Community banks

Community banks said the same thing in plainer words. Missouri Bankers Association: “Banks are often required to issue lender credits and absorb higher appraisal fees when there is not an identifiable changed circumstance other than the appraiser raising the fee. The lender has no control over the fee charged by the appraiser.” RCB Bank: “Appraisals should not be zero tolerance because there is too much fluctuation of appraisal cost and complexity that may not be known at application.” United Bank in Georgia gave the smallest example: “if an appraisal fee increases $10.00, a revised disclosure is required.”Missouri ↗ RCB ↗ United ↗

Rush fees and travel fees

Rush fees and travel fees came up too. Union Home Mortgage wrote that “if an appraiser imposes a travel fee because the property is located outside the appraiser's normal service area, that cost should not be attributed to the lender,” and said it has repeatedly challenged examiners who disagree. It also described a timing problem: “An appraiser may have a legitimate basis for increasing an appraisal fee, but the corresponding invoice is not always delivered to the lender in a timely manner.”Union Home ↗

Rural lenders

Rural lenders gave the sharpest numbers. The Farm Credit Council called appraisal fees “the most difficult and costly item to estimate”: property details “can change the cost from an inexpensive AVM product up to a $5,000-7,000 appraisal,” and “even after all of the property information is known, appraisers will change their fee upon property inspection. Tolerance cures due to appraisals have cost Farm Credit lenders thousands of dollars on a single loan.” Averages do not help: “the number of transactions is too small.” The Illinois Bankers Association called appraisal fees a “fast-growing” category and cited “travel costs charged by a shrinking population of appraisers in Illinois who must cover larger geographic areas.”Farm Credit ↗ Illinois ↗

How big is the problem?

The letters disagree. A “cure” is the refund a lender pays when a fee comes in above the limit. The ABA cites an industry study that found cures on 35% of mortgage loans, “with an average consumer reimbursement of $128,” while each one costs the lender $1,096 to process. The Structured Finance Association, using loan review data, reports a median cure of $92.35 and complains that “a $5 violation is treated the same as a $500 violation.” Neither number is specific to appraisal fees.

The lenders also admit something

Zero tolerance was meant to stop low-ball estimates. Several lenders say it now does the opposite. “A creditor seeking to avoid future tolerance liability may feel compelled to intentionally overestimate third-party fees,” The Mortgage Collaborative wrote. “Consumers are not better served by inflated estimates designed to protect creditors from compliance risk.”

The proposed fixes differ

MBA, HPC and the ABA want no cap. The Wisconsin bankers and the credit union mortgage association would accept a 10% limit. The mortgage brokers want a safe harbor for estimates “based on a published, current fee schedule from the appraisal management company or panel the creditor intends to use.” Farm Credit wants higher thresholds for rural loans only. The Illinois bankers ask for a “reasonable tolerance.” That association’s letter shows how lenders see the appraiser, as one more outside party behind an increase “attributable to a governmental recording office, licensed appraiser, title insurance underwriter, or other third-party settlement service provider.”NAMB ↗ Wisconsin ↗ ACUMA ↗

What these letters leave out matters to appraisers. Nineteen filings from outside the profession ask for looser treatment of the appraisal fee by name. None mentions customary and reasonable fees. None asks whether a fee increase reaches the appraiser or stops at a middleman. In these letters the appraiser is only a cost the lender cannot control.

Builder-affiliated lenders filed some of the longest letters in the docket, and appraisal runs through them. Lennar Mortgage, which made about 56,000 purchase loans last year, says roughly 27% of them closed more than 60 days after application and that build-to-order timelines run four to eighteen months. Over that span, it wrote, “appraisal fee markets move,” and the paperwork goes stale: “credit documentation generally must be no more than approximately four months old at the note date, and appraisals typically require an update after twelve months.”Lennar Mortgage ↗

Each update is a new charge that was not on the original Loan Estimate, and each has zero tolerance. Lennar asked the Bureau to confirm that these count as valid reasons to revise the estimate: “an appraisal update, recertification of value, or new appraisal required because the existing appraisal will exceed its permitted validity period.”

UAD 3.6 shows up here as a cost

Taylor Morrison Home Funding wrote that on homes disclosed months before closing, “it is all too common for appraisers or other third parties to increase those fees in the interim due to changes in market conditions or agency requirements. The implementation of Uniform Appraisal Dataset 3.6 is one such example.” Its conclusion: “Fees outside the lender's control, including property appraisal fees, should not be subject to the zero percent tolerance.” D.R. Horton’s lender made the same request, in wording close to the MBA’s.Taylor Morrison ↗ DHI Mortgage ↗

Affiliated companies

Affiliated companies are the second builder issue, and it touches the appraisers’ fee-split argument. Under the rule, PulteGroup explained, “fees retained by an affiliate settlement service provider, such as an affiliate title agency or appraisal management company, fall into the 0% tolerance category.” Pulte and the National Association of Home Builders want affiliates moved to the looser 10% group. NAHB’s case: the current rule “discourages home builders and lenders from using wholly owned or affiliated settlement providers such as title or appraisal companies that can provide streamlined services at lower costs.”PulteGroup ↗ NAHB ↗

Not everyone in the industry agrees. Lennar, United Wholesale Mortgage and AD Mortgage would all keep creditor and affiliate charges at zero tolerance. A policy group, the Main Street Foundation, warned that relaxed tolerances “should not permit institutions to reclassify controlled charges, route them through affiliated providers, or otherwise shift predictable expenses into categories receiving more permissive treatment.”Main Street Foundation ↗

Compare that with Gregoire’s request that the forms state “whether the AMC is affiliated with the creditor.” Builders want more pricing room for valuation companies they own. An appraiser wants the borrower told when one is involved. Neither letter mentions the other’s point.

Section 6 of the order speaks of “reducing appraisal requirements for low-risk transactions.” The CFPB’s notice did not ask about that. Some commenters raised it anyway. Their requests show what a Section 6 comment period would likely bring.

PACE financing

PACE loans pay for home energy and storm upgrades and are repaid through the property tax bill. The trade group for PACE programs asked the Bureau to stop requiring appraisals on them under its rule for higher-priced mortgages. Florida sizes these loans by tax-assessed value. California allows automated valuation models. The group’s math: “the average amount of financing in a PACE transaction is $25,500, and the average appraisal cost is $550. The average appraisal cost exceeds 2% of the average financed amount.” Its conclusion is blunt: “there is no need for private appraisers to evaluate the property’s market value.”BRIDGE comment ↗

The letter also describes the inspection from the homeowner’s side. The rule, it says, “has required consumers to take time out of their busy lives to meet appraisers at their homes, so the appraiser can access the interior of their homes, which has no bearing on any PACE financing terms or the proposed improvements.”

Refinances

The Ohio Credit Union League recommended “eliminating the need for new title insurance or appraisal for rate-and-term refinancing.”Ohio Credit Union League ↗

Appraisal or evaluation

The Missouri bankers asked to “list ‘Appraisal/Evaluation’ on the Loan Estimate, as the lender may not know at the time the Loan Estimate is issued which type of property valuation they will be relying on.” The August 3 bank letter asks regulators to let more loans use an evaluation instead of an appraisal. This is a related request, made to a second agency.

Flipped properties

When a seller resells within 180 days at a sharply higher price, the rule requires a second appraisal and bars the lender from charging the borrower for it. One small lender asked that the cost “be allocated by agreement among the parties, including payment by the seller.” No letter we read defended the current rule.Warshal comment ↗

Appraisal paperwork

A bank holding company asked the Bureau to drop the notice of the right to receive an appraisal, due within three days of application, “while retaining the requirement to provide the appraisal.” A credit union asked that a borrower’s request to close early count as the waiver of the appraisal review period: “Consumer choice should be respected when the borrower has received the appraisal and knowingly elects to proceed.”Holst ↗ Skyward Credit Union ↗

Two commenters, JPMorgan Chase and the Structured Finance Association, pointed to that same appraisal waiver as a model for something bigger. Chase asked that waivers of the disclosure and rescission waiting periods “be treated similarly to the process for waivers of the appraisal waiting period under Regulation B.” In other words, a waiver built for the appraisal is being used as the template for loosening other protections.JPMorgan Chase ↗

Consumer advocates defended a different line

The largest consumer filing came from the National Consumer Law Center with four partners, including the National Fair Housing Alliance. A coalition of ten attorneys general led by New York filed another, and Better Markets a third. All three argue against weakening the three-day waiting period and the right of rescission. “Softening the TRID regime will not lower the cost of credit or make access easier,” the NCLC coalition wrote. The attorneys general called the waiting period “easily understood and easily enforced.”NCLC coalition ↗ Attorneys general ↗ Better Markets ↗

None of the three says a word about fee tolerances, and none mentions appraisal. So no one in the record opposes the lenders’ request to lift the cap on the appraisal fee. And the groups that usually speak for borrowers did not back the appraisers’ request to split it.

The big appraisal organizations did not file

The docket has no comment under the name of the Appraisal Institute, the American Society of Appraisers or The Appraisal Foundation. The National Association of REALTORS® filed, calling the three-day rule “imperative for consumer awareness,” and did not mention appraisal. The appraiser case at the CFPB was made by individuals, small firms, a state coalition and one research group.

Lenders do not all agree with each other

The big trade groups want borrowers to be able to waive waiting periods for any reason. The Broker Action Coalition, whose Brendan McKay appears earlier in this article, disagreed: “the vast majority of transactions complicated by the three-day Closing Disclosure requirement result from poor execution by the mortgage company rather than from the regulation itself.” California’s escrow trade group said its members see “delay, not denial.” A settlement services group took the opposite view, that the three-day rule “has caused more problems than any hypothetical value it achieved.”Broker Action Coalition ↗ Escrow Institute of California ↗ RESPRO ↗

Many letters share wording

Three credit unions filed the same text under different letterheads, each concluding “that disclosures are not educational.” D.R. Horton’s lender repeats passages from JPMorgan Chase. Two title associations overlap nearly sentence for sentence. One title forum’s filing says its answers are formatted “so commenters may copy the relevant answer and supporting citations directly into the public comment portal.” The Farm Credit Council’s letter is in the docket twice. So the number of comments on a side says less than it seems.

Look at the middle column. Appraisers and one research group say yes. The AMC trade group says lenders prefer no. The lenders, whose forms these are, did not answer. When they came close to the question, they pointed the other way: the Housing Policy Council asked the Bureau to consider “collapsing fee itemization on the LE and CD for title and appraisals,” the Structured Finance Association asked for “broader fee categories, particularly for title, appraisal, and inspection services,” and D.R. Horton’s lender asked that such charges “be grouped into broader categories.” Fewer lines, where appraisers want more.

If the Bureau acts only on the right-hand column, the appraisal fee could rise after disclosure and still be shown as one number. Baldwin’s letter was written to prevent exactly that. It is also where most of the docket points.

FHFA decides what Fannie Mae and Freddie Mac will buy. Bank regulators decide when a bank must order an appraisal at all. Three of the groups that signed in May wrote to Governor Michelle Bowman, Chairman Travis Hill and Comptroller Jonathan Gould, asking for changes to the bank appraisal rules.Read the letter ↗

Raise and index the threshold

The letter starts with appraiser supply: “Industry concerns persist about the future of appraiser availability, particularly in rural areas.” It recommends moving the exemption for 1-to-4 family properties “from $400,000 to $625,000, while also indexing the threshold annually,” a number it bases on house price growth since September 2019. It notes that, by the FDIC’s count, the 2019 increase “exempted an additional 14 percent of transactions from appraisal requirements.”

Let software do the first review

Under 2010 guidelines, a bank needs its regulator’s approval before it uses automated tools to review appraisals before funding. The groups call that outdated: “Requiring case-by-case preapproval is unnecessary when institutions use automated collateral review models that are subject to robust validation, lifecycle management, and ongoing monitoring.”

Redefine the inspection

As in May, the letter asks to “permit borrowers to photograph the interior and exterior of a property,” this time through “a broader definition of property inspection for appraisals and evaluations.”

Lift the $1 million line

Transactions above $1 million count as “high value and complex” and need a state-certified appraiser. The letter’s view: “In today’s housing market, the one-million-dollar limit is no longer appropriate.”