ABOLISH and OUTLAW bank owned/affiliated and/or contracted management companies.

[CraigButterfield]

Please note - the Petition can be signed after the 3rd of January.

You can sign the petition at


appraisalunion.org


Thanks!!

We want to wait to see, if any typos or any other thoughts need to be added before the final publish. Unlike the AMC's we will not modify the document after people have signed it.

Thanks

CB

 

[Lawrence R.]

Unlike the AMC's we will not modify the document after people have signed it.

Thanks

CB

too funny Craig!!

 

[Lawrence R.]

Just a quick note in reviewing the document. In bulletin #3, the last sentence states "can not me met".....may want to change that to "can not be met"

Yeah, Diane, thanks for that...need to get that cleaned up.

thanks again.

 

[CraigButterfield]

The petition

Sorry about that, hey moderators, can you merge these two threads, this one, and the one titled in an effort to get the ball rolling?

At any rate, here it is....

View attachment 14038

_______________________________________________________________

Many persons have now proofed the below petition, and Larry Roscoe was instrumental in rewriting the petiton, and bringing out clarity in many of the thoughts in what now was my original draft. I am pasting Mr. Roscoes re-write below. If some of you disagree with the premises therein, so be it. For those who do agree, then once the petition is posted after Jan 3rd (Pending any other items that should be added, or spelling errors, that are brought to our attention, before Jan 3rd - then this is it) We invite persons to read the very informative comments on the original draft from those who had signed - see appraisalunion.org website. Thanks Craig
__________________________________________________________

To: U.S. Congress
We beseech the U.S. congress to propose a bill mandating the abolishment of bank owned/ affiliated and/or contracted appraisal management companies for the following reasons:

• Appraiser independence (per FIRREA law chapter 564-5-6) is compromised as bank owned management companies have an interest in directing the outcome of the mortgage transaction.
• Management companies who control the appraisal ordering process, negate appraiser independence by coercing appraisers to follow a predetermined outcome, one favorable to the funding of the loan at any cost, and without regard to the welfare of the consumer. Management companies go so far as to remove appraisers who do not meet specific financial goals from their panel of acceptable appraisers.
• Bank owned/affiliated and/or contracted management companies mark up the cost of an appraisal to cover their overhead, but fail to properly disclose that to the consumer, rather simply stating on the Closing documents that a fee higher than the one paid to the appraiser was charged for the appraisal. As a result, the spirit and letter of the Truth in Lending mandates are being reported inaccurately to the consumer. Profiting from an appraisal fee constitutes a clear conflict of interest for the bank. Mandate that the appraiser collect the entire fee, in advance, directly from the consumer, and not a portion thereof.
• Management companies routinely demand predetermined values, and routinely refuse to pay appraisers for work if this contingency is not met. They often set forth a scope of work that so limits the appraiser’s ability to properly collect and analyze relevant data that credible results are impossible to attain. Among these requirements are 24 hour deadlines to complete assignments, and a directive to stop work and consult the management company if it becomes clear that any of these contingencies can not be met.
• Many bank owned management companies are now filing bankruptcy in an attempt to hide behind a corporate veil. Consequently, appraisers are not paid on jobs performed. Accordingly, said management companies are retaining the appraisal fees and in no way independent of the transaction.
• Bank owned/affiliated and/or contracted management companies are not acting in the capacity of fiduciaries to a transaction, as they are so regulated to be, but are interested parties of the first part.
• In addition, management companies appear to be price fixing appraiser’s fees. This alleged collusion by lenders/bankers/appraisal management companies is contrary to anti-trust laws.
• Appraisers who are not on key lenders (management companies) approved lists cannot receive work from clients in the mortgage community (mortgage brokers/realtors), which puts appraisers out of business.
• Damage to PRINCIPALS --The consumer -- (buyers/sellers) oftentimes occurs when substantial money paid to management companies for appraisal fees are lost, if/when; the bank (who controls the management co.) decides to not fund the loan. The principal then wants the appraisal report (which the management company routinely refuses to give to the principal) - hence, the ensuing obstacle created via the next BANK owned/controlled mgmt co. (who subsequently refuses to take the report from the appraiser who is not on their approved list), creates havoc and chaos in endeavoring to fund the principal’s transaction.
• The keeping and monitoring of “approved” appraiser lists has turned into a list of “unapproved” appraisers based on nothing more in some cases than the ratio of how often the appraiser “returns the required value”, or one who refuses to accept such limiting conditions as to render an appraisal unreliable. Once an appraiser is placed on one of these arbitrary lists, there is no remedy offered to the appraiser and the appraiser often finds he is blocked from doing business with any or all companies based on such a list. With the existence of so many lists of “unacceptable” appraisers, it is impossible for a buyer to “shop” for a competitive mortgage, as he must continually hire different appraisers based on each company’s “list”. This practice clearly is a restraint of trade in the marketplace
• The FIRREA law as it presently stands which states: “The Lender or its Agent mustengage the appraiser”, is in complete contridiction to consumer rights laws, and free trade/commerce, wherein the consumer, ie; the PRINCIPAL cannot engage the appraiser, and seek out an appraisal for a fair price as the Lender (or management company) dictates who the borrower-consumer (Principal) must use.
• Accordingly, damage may result in foreclosure to the principal if they are facing a balloon mortgage or a lapse of contract; and once expired, the transaction can fall apart. Either the principal’s deposit or equity can be lost, as trade has been restrained for the principal.
• The actual client (mortgage brokerage agent or real estate agent) is typically forced by the lender to order a NEW appraisal, as the management company more often than not steers the client (mortgage broker/or real estate broker (AGENT) to their approved appraiser), thereby restraining trade for the mortgage brokerage agent and their client, the borrower-consumer, unnecessarily creating time constraints and extra fees contrary to the FIRREA anti-discrimination appraiser law Chapter 564.5-6, which management companies openly, defiantly, and routinely violate.
• Appraisers have seen the pitfalls of the lenders owning the companies selecting the appraisers first hand. Discrimination against honesty and unbiased opinions has led to the reward of fraud, deceit, and unreliable results at the expense of the general public. Without honest, unbiased appraisers who are free to communicate reliable, well researched and well documented reports, who will protect the consumer?


As a group, the undersigned implore you to make such affiliations between Lenders and Appraisal management companies prohibited. Help us return the appraisal ordering process to what it was intended to be when such regulations as FIRREA, USPAP and Truth in Lending were established. There is no way a company owned/affiliated/contracted/managed by the lender can act without bias towards that lender. Regulation would only serve to legitimize this orchestrated effort to defraud the consumer. We owe it to the people involved in these transactions, especially in the light of our current mortgage crisis, to give them every measure of protection and disclosure possible to avoid any further damage to our professions and the economy as a whole. Please, outlaw this imbedded, insidious conflict of interest as soon as possible.


Sincerely,
The Undersigned (You may click the purple to the left which will direct you to read comments from those who signed the origonal draft., or you may visit appraisalunion.org)

 

[Marcia Langley]

The actual client (mortgage brokerage agent or real estate agent) is typically forced by the lender to order a NEW appraisal, as the management company more often than not steers the client (mortgage broker/or real estate broker (AGENT) to their approved appraiser), thereby restraining trade for the mortgage brokerage agent and their client, the borrower-consumer, unnecessarily creating time constraints and extra fees contrary to the FIRREA anti-discrimination appraiser law Chapter 564.5-6, which management companies openly, defiantly, and routinely violate.

(my highlights)

This is beyond disturbing and is very revealing of the motives of the author. In a mortgage related appraisal the real estate agent is never the actual client. This smacks very loudly of an author who is an advocate for the agent and the MB and for getting the deal done in order to preserve the flow of orders from agents and MBs.

I say revealing because it sets the stage for the other self serving elements of the document.

My remarks are harsh but I am absolutely flabbergasted at the blatant misrepresentation of what an independent, unbiased, disinterested third party is.

 

[daryljohns0428]

As a new member to this forum I've been watching some of the dialog regarding this issue of AMC's and the petition. I don't do any work for AMC's and only enough lender work to realize the hassles involved with many financial related appraisals. I've read this petition and find the basis for the document very important. It's incredibly sad, especially around the holidays, to see so many of my fellow appraiser friends who do lender work struggle and have seen their fees cut when the banks have closed their in house appraisal department and switched to an AMC. As with any document of this type not everyone will agree with all the content. But the overwhelming majorty of my associates do believe this petition would benifit the industry. The response has been very positive with the people I've talked to. Many have contacted the author directly to discuss the document in more detail. A few who have the time check out this site and are entertained by the ongoing arguements of a few, but realize the big picture and what's on the line. Keep up the positive momentum and a change for the better will come out of this.

 

[Lawrence R.]

(my highlights)

This is beyond disturbing and is very revealing of the motives of the author. In a mortgage related appraisal the real estate agent is never the actual client. This smacks very loudly of an author who is an advocate for the agent and the MB and for getting the deal done in order to preserve the flow of orders from agents and MBs.

I say revealing because it sets the stage for the other self serving elements of the document.

My remarks are harsh but I am absolutely flabbergasted at the blatant misrepresentation of what an independent, unbiased, disinterested third party is.

I do think that we can be independent, as long as we aren't being placed on a bunch of arbitrary "lists" based on how good the coffee was that morning.

Also, I understand that being unbiased is how we are to be while doing an appraisal...but to think that we should remain disinterested and detached while some uninvited entity swallows our profession basically whole....well, that is beyond the pale for me.

I spoke to Marcia privately and she does have some legitimate concerns, but unless we all compromise a little, we will need to send 30,000 petitions, all signed only by the author.

Don't let the perfect become the enemy of the good here, folks.

 

[Stone]

I don't think that 100% agreement is necessary to sign this type of petition...

If you think you can get behind the overall spirit of this petition, I would encourage you to sign it.

I know you don't want people commenting from the balcony, but:

Personally, I disagree with this concept. I would never sign a petition that I didn't agree with, if not 100 percent, darn close to it. There are some items that I think many appraisers are going to recoil from.

In particular, the stuff about mortgage shopping and approved lists is not something that everyone is going to get on board with. I suspect that is why you have chosen to use this language about signing even if you don't agree with all of it. Frankly, having visited the website and looked at a few items I would definitely scrutinize anything from this source to a greater degree instead of just going ahead because of the "overall spirit".

This emphasis that some of the items at the appraisalunion site has on homeowners being the real clients and the belief that lenders shouldn't keep their own lists of approved/unapproved appraisers is quite telling, IMO.



BTW - Larry, if you have something to say to me about this post (not that you need to), please feel free to do it here instead of in a PM. I won't consider a PM that relates to this topic as being private.

 

[Lost Cause]

Marcia and Stone's comments are right on.

While there are serious problems with AMC's that need to be resolved, this petition is not the answer. It is so all over the place and includes entirely too much of Mr. Butterfield's biases. He is entitled to his opinions, but a petition of this sort must be free of that kind of thing for two reasons: 1) to attract the support of a large number of people with a wide range of opinions about other issues, and 2) to be taken seriously by those targeted.

Sour grapes over the Appraisal Institute has no place in such an effort. Zingers such as "at all costs" sprinkled throughout such a document might make someone feel good, but make it difficult for many to swallow. A concise and dispassionate document is what is needed.

 

[Em Tee]

Ditto what Marcia, Stone & JH said.