Background checks again.

[hastalavista]

Eli, Noreen & Evincere:

There is no doubt that this is a contentious issue. I think most of us would agree to the following:
A. Background checker must be a secure entity that we would trust to maintain (as best it could; even the NSA gets broken into) the privacy of the data;
B. Only we could authorize the release of that information to entities; and
C. We didn't have to pay for the service
We'd probably be less resistant (not all of us, but many).

Now, if someone wouldn't agree to the above, then no matter who runs the background check, they are going to be opposed. While I'll acknowledge such a position, there's no need to discuss it; that segment's mind is made up, and I won't try to convince them to change it. I think they should, however, acknowledge that if BCs are to become the norm, then they will have to re-tool their business model to capture clients who don't require them. There are lots of clients out there like that, but probably not mortgage finance clients if the BC movement gathers steam.

But, if you do agree with the three points or think they at least present a valid argument (thank you, Noreen), then it really boils down to who is going to collect the information?
If it were a Dave Biggers, who many on this board admire and respect, would it be more palatable?
If it were the state, would it be acceptable?
What if a group on this forum decided to get together and form a co-op to provide the service; would that work?

I'd say if any of the above (and the state is constantly thrown out as a candidate, but I don't see that working... I could be wrong) are acceptable, then the issue isn't
- background checks; and the issue isn't
- should a client, exercising its due diligence responsibilities (given the nature of their business...confidential financial information of a potential borrower/client), require a background check on those who will be part of that confidential financial information transaction; and it probably isn't
- what kind of entity (public, private, etc.) will run the background check; it is
- we don't want Joan running the background checks

If it is a personality thing ("I don't like Joan") that certainly is legitimate position for any individual to hold.

Unfortunately and in my opinion (and maybe I'm the only one who holds this opinion), the focus on Joan diminishes the core concerns of (a) privacy of the information, (b) necessity of it being needed in the first place, (c) control of the information, and (d) who pays (appraiser or user) for the collection of the information.



:new_smile-l:

 

[Meandering]

It is a requirement of the AQB in 2017. But that has no effect on what lenders and AMCs must do. Lenders and their agents are required to perform due diligence. A background check run by the State is not shared with your clients. In fact it isn't shared across State agencies. So if an appraiser applies for reciprocity I would assume they will have to have multiple background checks run. You cannot assume States properly screen appraisers. I have more than enough cases where the appraiser has been convicted of a felony and they maintain their license. We have one whose address is Leavenworth.

Bull do do.

The state issues the license to practice.

That's the end of it. It is not up to some fly-by night BS company to decide who can or can not practice.

There is NO REQUIREMENT for lenders or AMCs to background check appraisers, anywhere.

You cannot assume States properly screen appraisers.

But we know they won't be profiting off of it, or reselling it to the highest bidder, or reselling it to all bidders, regardless of price.

We also know they will not be forwarding our information to people in Mumbai that work for food, or pennies on the dollar.

OMG Joan!

Who is background checking those foreign QC/phone folks? They might be out raping teenage girls and grandmas for a hobby.

Hire, pay unemployment insurance, employment disability, workman's comp, matching taxes, CE classes, license renewals, and E&O. That's when we can talk about background checks,when we're trading hours for dollars, not when we're selling services.

.

 

[Joe Flacco]

Denis, you have some excellent writing skills.

 

[Eli]

My gut feeling which is wrong many times like when I look at a property and think one thing and the appraised value comes out way different. Anyway I think (gut feeling/swag) Joan may be starting a platform like appraisalport or mercury but may be reluctant to disclose that.

 

[Meandering]

Eli,

We loves ya, but,

You should really re-read that last sentence, and clarify it a bit.

 

[Noreen]

Eli, Noreen & Evincere:

There is no doubt that this is a contentious issue. I think most of us would agree to the following:
A. Background checker must be a secure entity that we would trust to maintain (as best it could; even the NSA gets broken into) the privacy of the data;
B. Only we could authorize the release of that information to entities; and
C. We didn't have to pay for the service
We'd probably be less resistant (not all of us, but many).

Now, if someone wouldn't agree to the above, then no matter who runs the background check, they are going to be opposed. While I'll acknowledge such a position, there's no need to discuss it; that segment's mind is made up, and I won't try to convince them to change it. I think they should, however, acknowledge that if BCs are to become the norm, then they will have to re-tool their business model to capture clients who don't require them. There are lots of clients out there like that, but probably not mortgage finance clients if the BC movement gathers steam.

But, if you do agree with the three points or think they at least present a valid argument (thank you, Noreen), then it really boils down to who is going to collect the information?
If it were a Dave Biggers, who many on this board admire and respect, would it be more palatable?
If it were the state, would it be acceptable?
What if a group on this forum decided to get together and form a co-op to provide the service; would that work?

I'd say if any of the above (and the state is constantly thrown out as a candidate, but I don't see that working... I could be wrong) are acceptable, then the issue isn't
- background checks; and the issue isn't
- should a client, exercising its due diligence responsibilities (given the nature of their business...confidential financial information of a potential borrower/client), require a background check on those who will be part of that confidential financial information transaction; and it probably isn't
- what kind of entity (public, private, etc.) will run the background check; it is
- we don't want Joan running the background checks

If it is a personality thing ("I don't like Joan") that certainly is legitimate position for any individual to hold.

Unfortunately and in my opinion (and maybe I'm the only one who holds this opinion), the focus on Joan diminishes the core concerns of (a) privacy of the information, (b) necessity of it being needed in the first place, (c) control of the information, and (d) who pays (appraiser or user) for the collection of the information.



:new_smile-l:

You are a "Word Mistro"... very eloquent!! My position is that this type of information is just too personal/ life altering if mistreated... and I do not think it is "prudent" to entrust " a clerk or the unknown goof" to distribute this to whatever entity pays them for this information. In cyber world, it has ruined lives. It needs to be in a bonded environment, why not have it be we are required to be bonded in conjunction with our E&O, that would work. I guess I am saying it has to be at the E&O or licenses level, not a random clerk.

 

[Eli]

Eli,

We loves ya, but,

You should really re-read that last sentence, and clarify it a bit.

I took the last sentence out.

 

[Meandering]

A background check run by the State is not shared with your clients. In fact it isn't shared across State agencies....

You cannot assume States properly screen appraisers. I have more than enough cases where the appraiser has been convicted of a felony and they maintain their license. We have one whose address is Leavenworth.

Joan, Thank you.

Thank you for providing sound reasoning's why appraisers should be background checking those who own 10% or more of every AMC they might work for. You're saying the state can't be trusted to do this, even though the federal law requires it. Appraisers risk much more, personally, on a bad AMC than any bank risks on an appraiser. While the $ number may be higher on the bank's side, as a percent of income, it's far greater on the appraiser's end, and therefore is a greater risk to appraisers, than banks.

You're quickly running out of appraisers to advantage, tell your clients to expect the tide to turn in a big way. After all, they want appraisers to state compliance with Frank/Dodd, great! Pony up for a background check of the owners of the AMC, as required by the law.


.

 

[Adios]

My gut feeling which is wrong many times like when I look at a property and think one thing and the appraised value comes out way different. Anyway I think (gut feeling/swag) Joan may be starting a platform like appraisalport or mercury but may be reluctant to disclose that.

No Eli we are not building a platform. But we are integrating with those who do. We are focused on the compliance and due diligence of the appraiser. We aren't focused on the appraisal.

Based on trends I am seeing, mega millions are spent trying to automate the transaction and the review process. The regulators are very anti automated review. Those products are nice tools but they are not a substitute for a manual review.

While Marion believes everything in the regs must be prescriptive they are not and never will be. The regulations and guidance are principals based. I had a nice conversation with the OCC last week on this topic. There never will be a reg that states that background checks must be run, what type and so on.

My concern, and it should be yours, is that some companies are actually performing a pass/fail on the appraiser based upon their background check. I confirmed that that is not an acceptable practice. The background check company is even issuing a decline letter to the appraiser.

You should be concerned about privacy. The Target issue was a big deal. I had two AMEX accounts hacked over the past few months. And I had my Gmail account hacked and an email sent to my financial planner asking for a withdrawal.

I think we have uniquely allowed the appraiser complete control over their profile. They order the background check, they decide to share it or not. We did this so that appraisers will not have to pay for multiple background checks. A profile can be emailed to anyone the appraiser chooses.

We give appraisers access to fee survey data, regulations, and so on.

I really do get the angst part. I can't make it go away. I didn't write the rules but I am a staunch supporter obviously of regulations that support honest and competent appraisers. Always have been, always will be.

The other issue the OCC brought up was that indeed there will be rules on C&R. That is what they said at the CRN meeting last October. It was reiterated last week. I know it can't come soon enough.

 

[Evincere]

I had to sort through all that chafe to get to the wheat.

I had a nice conversation with the OCC last week on this topic.

There never will be a reg that states that background checks must be run, what type and so on.

The rest is quite simple - indeed, no need for angst. Each state will be examining how they wish to proceed with their new responsibilities.



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