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

[kerrylanger]

A new petition is being drafted. I suggested that it be posted here for constructive crticism before it gets published. Hopefully, this will have a positive outcome.

Although, I'm sure the negative thinkers will have some sort of bashing to add. Seems like some people have an attitude that nothing will ever work. Anyone ever see Saturday Nite Live's Debbie Downer sketches? I can hear the wa wa wa music every time I read these negative comments.

 

[Riick]

A letter or an email <though the email will carry much less weight>
from everyone on the Forum, addressed to CUMO, pointing out the conflict
of interest, as well as what you perceive as price-fixing would do a h_ll of a lot more good.
Just my NSHO.

 

[kerrylanger]

A letter or an email <though the email will carry much less weight>
from everyone on the Forum, addressed to CUMO, pointing out the conflict
of interest, as well as what you perceive as price-fixing would do a h_ll of a lot more good.
Just my NSHO.

I think a petition is more organized and it's less work for the signers. If you make it easier for people to have their voice heard, they are more likely to speak up. Something as simple as composing an email will go to the bottom of everyone's list.

 

[Riick]

^^^
Everyone is entitled to their opinion.
It's just that 50-100-200 LETTERS draw real attention

.

 

[Scott Kibler]

Of course clients are always to blame for bad appraisers. We should abolish all clients from ordering appraisals.

 

[kerrylanger]

Here It Is

I have Craig's permission to post the revised petition. Here it is.
Any constructive feedback is appreciated. One line pot shots are not appreciated.



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

• ‘Appraiser Independence’ (per FIRREA law chapter 564-5-6) does not exist as bank owned management companies have an interest in the outcome of the transaction.
• Management companies control the appraisal ordering process, negating appraiser independence, and coerce appraisers to obey their whim. Furthermore, management companies do not accept appraisal work from appraisers that do not tow the line and do what the management companies dictate.
• Bank owned/affiliated and/or contracted management companies deceptively state appraisal fees of $500.00+ (for residential appraisals) on closing statements, and abate an ever diminishing compensation to the appraiser. As a result, said management companies are not providing “Truth in Lending” and are providing innacurate disclosure, as they are profiting on each appraisal fee (which is a clear conflict of interest).
• Management companies oftentimes dictate to the appraiser their desired value, in addition to unreasonable (if not impossible) turnaround times for job completion, thereby causing the work product delivered to be of an ever lesser quality. We propose tha a minimum of one week is needed to complete appraisal assignments (residential assignments), accurately, with ample time to research/inspect and verify information, and to complete appraisal assignments already in process.
• 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 fiduciaries to a transaction, 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 (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.
• 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 broker 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 to their approved appraiser) - 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.
• Summary: Results of this illegal restraint of trade by lenders/management companies are:
1. Appraiser’s lose the relationship between the mortgage brokerage/real estate agent client and their fee, and accordingly their livelihood.
2. The mortgage broker/Real Estate agent in many cases will lose their commission, along with their client.
3. The principal will lose the appraisal fee and/or their property.
ABOLISH and OUTLAW bank owned/affiliated and/or contracted management companies.
We believe this will restore integrity to the real estate profession (appraisers, mortgage brokers, title companies, etc.) and allow free trade and commerce among ethical professionals.
Sincerely,
The Undersigned

 

[Em Tee]

A few quick notes off the top of my head:

To: U.S. Congress
We beseech the U.S. congress to propose a bill mandating the abolishment of bank owned/ affiliated and/or contracted management companies for the following reasons: So the purpose is to abolish all AMCs? Who then should order the appraisal (and how)?

• ‘Appraiser Independence’ (per FIRREA law chapter 564-5-6) does not exist as bank owned management companies have an interest in the outcome of the transaction. And if the appraisal is ordered by the bank or lender or mortgage broker, don't they have an interest in the outcome?
• Management companies control the appraisal ordering process, negating appraiser independence, and coerce appraisers to obey their whim. Furthermore, management companies do not accept appraisal work from appraisers that do not tow the line and do what the management companies dictate.
• Bank owned/affiliated and/or contracted management companies deceptively state appraisal fees of $500.00+ (for residential appraisals) on closing statements, and abate an ever diminishing compensation to the appraiser. As a result, said management companies are not providing “Truth in Lending” and are providing innacurate disclosure, as they are profiting on each appraisal fee (which is a clear conflict of interest).
• Management companies oftentimes dictate to the appraiser their desired value, in addition to unreasonable (if not impossible) turnaround times for job completion, thereby causing the work product delivered to be of an ever lesser quality. We propose tha a minimum of one week is needed to complete appraisal assignments (residential assignments), accurately, with ample time to research/inspect and verify information, and to complete appraisal assignments already in process. Who says a minimum of one week is needed? I do lots of cookie cutters and certainly don't need a week to complete an appraisal (but I think Greg probably needs about a month for his)!
• 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. Mortgage brokers have done this too. Should they also be abolished?
• Bank owned/affiliated and/or contracted management companies are not fiduciaries to a transaction, but are interested parties of the first part.
• In addition, management companies appear to be price fixing appraiser’s fees. How did you come to this conclusion? I see all sorts of fee ranges by different AMCs. This alleged collusion by lenders/bankers/appraisal management companies is contrary to anti-trust laws. Have you talked to an attorney to find out what legally constitutes collusion and how management companies are violating 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. Every lender has approved appraiser lists. This didn't start with AMCs.
• Damage to PRINCIPALS (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. This whole paragraph doesn't make sense. Oftentimes, a lender will decide not to go forward on a loan, or a buyer will change lenders. This has nothing to do with an AMC. This happened before AMCs were even around.
• 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. Again, I don't see how this relates to AMCs.
• The actual client (mortgage broker or Real Estate agent since when was a Realtor ever a client in a typical purchase appraisal) 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 to their approved appraiser) - 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.
• Summary: Results of this illegal restraint of trade by lenders/management companies are:
1. Appraiser’s lose the relationship between the mortgage brokerage/real estate agent client and their fee, and accordingly their livelihood.
2. The mortgage broker/Real Estate agent in many cases will lose their commission, along with their client.
3. The principal will lose the appraisal fee and/or their property.
ABOLISH and OUTLAW bank owned/affiliated and/or contracted management companies.
We believe this will restore integrity to the real estate profession (appraisers, mortgage brokers, title companies, etc.) and allow free trade and commerce among ethical professionals.
Sincerely,
The Undersigned

I'm not sticking up for AMCs, I'm just pointing out that much of this is poorly written, doesn't make sense, and might not even be legally correct. Many of the terms used have specific legal meanings and cannot be thrown around without the author having actual advice from an attorney.

 

[kerrylanger]

Thanks Em Tee. Can I passed your opinions on to Craig? He is interested in feedback.

 

[Em Tee]

Certainly.

 

[kerrylanger]

Revised

Here is a revised version....

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

• ‘Appraiser Independence’ (per FIRREA law chapter 564-5-6) does not exist as bank owned management companies have an interest in the outcome of the transaction.
• Management companies control the appraisal ordering process, negating appraiser independence, and coerce appraisers to obey their whim. Furthermore, management companies are oftentimes found to not accept appraisal work from appraisers that do not tow the line and do what the management companies dictate.
• Bank owned/affiliated and/or contracted management companies deceptively state appraisal fees of $500+ (for residential appraisals) on closing statements, and abate an ever diminishing compensation to the appraiser. As a result, said management companies are not providing “Truth in Lending” and are providing innacurate disclosure, as they are profiting on each appraisal fee (which is a clear conflict of interest). Mandate that the appraiser collect the entire fee directly from the consumer, and not a portion thereof.
• Management companies oftentimes dictate to the appraiser their desired value, in addition to unreasonable (if not impossible) turnaround times for job completion, thereby causing the work product delivered to be of an ever lesser quality. We propose that a minimum of one week is needed to complete appraisal assignments (residential assignments), accurately, with ample time to research/inspect and verify information, and to complete appraisal assignments already in process.
• 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 fiduciaries to a transaction, 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 (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.
• 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 broker 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 to their approved appraiser) - 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.
• Summary: Results of this illegal restraint of trade by lenders/management companies are:
1. Appraiser’s can and do lose the relationship between the mortgage brokerage/real estate agent client and their fee, and accordingly their livelihood.
2. The mortgage broker/Real Estate agent in many cases will lose their commission, along with their client.
3. The principal may lose the appraisal fee and/or their property.

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

We believe this will restore integrity to the real estate profession (appraisers, mortgage brokers, title companies, etc.) and allow free trade and commerce among ethical professionals.
Sincerely,
The Undersigned