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A Loan Officer In USPAP Class

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Mike Simpson

Senior Member
Joined
Jan 30, 2002
As a real estate agent (and appraiser) I sit in classes and I'm amazed at the increasing slings and arrows hurled at real estate appraisers by agent & loan officer instructors. I defend the appraisal industry with zeal on these occasions, and resent the tirade leveled at our profession by uninformed professionals who'd spread their predudices to others looking for an education.

Today (Saturday May 17th) is the second day of a USPAP class and I was becoming increasingly frustrated being forced to listen to a loan officer--who's also an appraiser--taking the course for their recertification. It's a sickness to like to hear the sound of your own voice that much. The straw that broke the camels back came at lunch when I overheard Sir talks a lot telling a 1st year newbie how he doesn't care if comp searches are in violation of USPAP--he & his client "have too much money at stake," and they need to know ahead of time if an appraiser can 'hit' the predetermined value before spending the clients money.

Having heard this I interjected myself into the conversation--he'd been making equally egregious comments for 2 days now, and I couldn't contain myself any longer. I began by trying to calmly discuss how comp searches were not only viewed by many as a violation of USPAP, but how he was expecting someone to work for free while he held out the carrot and promise of more work if they could 'hit' the number. What really surprised me was how frank this guy was considering he was also an appraiser. He reiterated that he didn't care about USPAP and if someone wanted to work for him (or his company) they'd better comply.

This was all the incentive I needed to light into him, and when I was done Gabby didn't have a whole lot to say--I'd laid it down pretty straight, and there just wasn't any defense. He did manage, "no offense, but I don't think I'd be giving you any work," at which point I shot back, "HEY...no offense right back at you PAL, but I wouldn't give you the time of day." My comment brought laughter from a group of appraisers standing nearby, they'd evidently tired of this guy's line of garbage as well.

Point is--we should all be willing to write or speak up when our professional is attacked by the self-serving. This is a topic we can all agree upon.

-Mike
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Mike,

Speaking as a CE instructor (including USPAP), I'm somewhat conflicted on the issue of sleazeballs in class. On the one hand, it can be very disruptive when a course participant openly advocates sleazy practices in a class like that. The last thing anyone needs is a blowhard to make comments like that without at least getting chanllenged on it. But on the other hand, it's a golden oportunity to graphically illustrate the point. To be honest with you, I depend on idiots like this to relieve the tedium of actually going through the materials. The way I figure it, if these guys don't speak up I have to find another way to address these issues, only without the entertainment portion of the show.

I never let it slide, although I usually don't confront them directly. I prefer to use peer pressure and basically align the rest of the class against these idiots. Actually, it's embarrasingly easy to do. Every course has at least a couple people in it who figure that as long as they're being forced to take the course for their license, they might as well try and get something out of it; even if it's just some reassurance that they're on the right track. Since appraisers as a group are usually pretty opinionated and articulate, these folks will usually speak up once they're given the opening. Alls I have to do is restate the question or comment in plain English and using the verbiage from the USPAP or other course materials in such a manner that it is clear that there's a problem. Then I dig out the state appraisal regulations, cite the sections that apply and close with a comment that getting caught at it will cause problems for the appraiser. Lastly, I explain how to address the issue for our clients without stepping over the line (provide the viable alternative).

One of these clowns might take a drubbing once like this and come back with "this is real world" or some other lame excuse, but when we pull it again the next time they spout off, they always get the hint and shut up. I don't interpret their silence to mean consent and I'm sure they continue doing business the same way after they leave, but at least they aren't corrupting any more of the gene pool.

Frankly, your instructor should have controlled the discussion a little better so this wouldn't have gotten so far. Since he or she didn't, I'm glad that you stepped up and spoke your piece. Thank you for your support. I agree with you; we should never pass up an opportunity to stick up for our ethics against our bad apples. They are a large percentage of our problem and have no redeeming attributes.


George Hatch
 

vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
I've been working up to doing some speaking at functions with Mortgage Brokers & Attorneys - I haven't actually done it as of yet because its been so busy for the past few years - certainly I will when it slows down a bit. Anyway, I was delivering an appraisal to a pretty large mortage company early the other morning and walked right into the weekly meeting / training session for newbee wanta be mortgage brokers. I avoided anything but just dropping off the appraisal at that time. However, I do know the owner quite well, and I asked him this question on email the next day :

"I wanted to ask you a question. As you know I am interested in doing some speaking on the Appraisal aspect in a small meeting type format similar to yours.

Is there a subject that an appraiser could address that would 'work' for you & your audience ? What would that be?"


This is his written responce... (Remember this GENTLEMAN is training the up & coming)

"What latitudes does the appraiser have. Are there some things that can be overlooked legally? What must be reported? These are some things I would want to know as a realtor or as a lender.

I've known for some time now that this is all about training the employee's. These mortgage brokers have been trained to not respect the appraisal process - its just that simple. Bottom line at this particular firm is SLAM THE LOAN WITH WHATEVER IT TAKES - basically pressure the appraiser to create a fradulant document when required its all a part of the job - end of story (not every mortgage broker), however just about every new one for sure. And its these Brokerage Owners who are pushing them & showing them the ropes.

Right now its busy, wait till its slow - then they bring out the heavy equipment :rolleyes:
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
George-

I confronted the L.O./Appraiser during the lunch hour. The instructor had engaged him during class on several occasions, but this guy reserved his brassyest (?) comments for the breaks. I appreciate your willingness to confront attacks on our industry--BATTLE!!!

Claudia-

Thanks for the kudos'.

Vargasteve-

I've had examples like yours confirmed on several occasions. Additionally, I've spoken @ real estate meetings (groups no larger than 50), and I tell them changes are taking place within the appraisal industry designed to eliminate the unethical appraiser. Various state & federal agencies, are looking to weed out the bad guys, and fewer people are coming into the industry relatively speaking (it's not as lucrative as it once was--thanks to the lenders), in fact in many areas of the country licensed & certified numbers are reversing, and many appraiser's have taken it upon themselves to turn in a crooked competitor. While it's true that appaiser's are needed less than in previous years, they are still required for many transactions, and some lenders not only need, but actually want an appraiser's expertise.

Now, when an ethical appraiser has been attacked or abandoned by their client because, they wouldn't compromise their ethics how long do you think that distateful experience will last in their memories? I can tell you from experience longer than the life of Mister Jingles (The Green Mile). They never forget, and as surely as agents and lenders talk amongst themselves about the appraiser--so the appraiser's talk amongst themselves about the lenders, or real estate agents. Lest they feel smug or comfortable in the knowledge that agents and lenders far outnumber appraisers, they should consider what would happen if they earned a reputation as someone, or a company undesirable to work with.

...and not to upset anybody, but if attacked I don't limit my response to strictly the unethical appraiser. If someone comes after my business because, 'I won't play ball,' or compromise my ethics, they run the risk of justifiable retaliation. I can't, and won't sit idly by while those wanting to know how far a rule will bend tear apart my business.

-Mike
 
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