Builder To Lender Coercion

[Wally Jones]

We received an assignment from XYZ Mortgage Co. New subdivision. Went to the builder (only one builder for subdivision) and requested data. They refused and said they had "their own" appraiser. The mortgage folks said they don't want to use that appraiser any more, that's why they called us. Builder says use him or no more of our business. They provide XYZ with a substantial amount of business and they caved in and cancelled our assignment. However, they want to know the proper way to complain about this.

I thought this might have been addressed before, but I apparently have no search skills. :roll:

Help.

My first inclination is a letter to the state Attorney General, Better Business Bureau, State Dept. of Business and Professional Regulation, Mortgage Banker's Association and State Appraisal Board. (Media?) The letter would describe the situation and raise the possibility of fraud.

Any suggestions would certainly be welcome.

 

[Farm Gal]

Wally:

I would suggest that XYZ is the patsy and if they don't want to DO anything about it there is very little to be done... A few hot letters to Fannie Mae might be in order... but will probably not accomplish a darn thing.

An INQUIRY on the part of that mortgage company (as opposed to complaint) addressed to the state licensing board might unearth some interesting response... You might suggest that they carefully detail ALL aspects of the conversation and indicate their concerns... it may be the case that the 'pet' gets it's chain yanked :twisted:

The sad reality is that the tail wags the dogs and in this case if the lender/broker does not care to take care of themselves... Wellll... so be it.

I suspect that short of you doing a complete full appraisal or Std 3 review which indicates MASSIVE wrongdoing, that the builder's applecart cannot be upset! Probably has a pretty good deal going, and doesn't want any inconvenient idjits like you to mess it up.

Either that lender gets cojones adn fires the builder... or they take the (minimal) risk of going down themselves. Bet which they are more worried about - today's commission or tomoorw's unlikely sanction? :roll:

 

[walt kirk]

The mortgage company is at fault. They should have told the builder NO.

 

[Pat Butler]

The builder has a sales contract with the buyer. Almost every sales contract I've seen obligates the parties to cooperate with each other to facilitate the sale. The builder, as the seller, is probably in breach of that contract. The lender needs to contact the buyer and the buyer needs to contact their attorney.

 

[Jeff Horton]

We However, they want to know the proper way to complain about this.

Simple, have some backbone and just say no.

Since their not going to do that. Have a Field review done. It could be that the appraiser is a friend and is honest. Everyone jumps to the conclusion (and probably rightly so) that the Appraiser is a number hitter.

I had a builder that would only use me and my father once. We didn't lie or cheat. I think he had a bad experience with an undervalued appraisal and refused to use anyone else. Was good for us!

 

[Mike Simpson]

Put together a well crafted letter. Then send it off to the entities and offices you cited in your post.

Additionally, send the letter to as many newspapers, consumer protection agencies, and any other party you can think of which might have an interest. There are some politicians which would probably like to hear what's taking place in this project as well.

The Department of Financial Institutions (or equivalent) in your state would probably be interested in hearing your story. How about the home owners in the project...could any of them use a real estate attorney?

Just some thoughts,

-Mike

 

[Mike Garrett RAA]

The builder should always use the best appraiser....that money can buy!!!

 

[Bill_FL]

That is not as uncommon as you may think. I have been in that situation from the other side.

Example, newly rehabed downtown luxury condo flats. In the area, there had ben a total of 3 conversions prior to this. None of the sales in MLS all of the developers kept tight lipped about what they had sold. I go a request to do one. I spent a month gaining the trust of the developers and had the details of every sale they had had. They all told me how difficult it was to get the units appraised because noone said they could do them. I told them, if they would help me with this data, then I would be able to do them.

In all, I got fantastic info from all of them. I started getting all the orders for the downtown units. The developes were refusing to let anyone else do them, because "I understood the market and had the data"

I can understand this in some situations. It may not be a case of a pet appraiser who makes numbers. It might be that their appraiser has a copy of all the flor plans and all the plats and to them it is just easier not to have to explain everything to every appraiser.

 

[liznindy]

Builders could make it easier on themselves (and us) if they would provide their (FULL and CORRECT) sales data to the MLS, become Realtor members, etc.


With all the builder concessions included in the production homes being constructed in these parts, the sales information must be anaylzed with eagle eyes...closing costs, downpayment assistance, etc is not always reported in the MLS. The only clue that concessions were made may be the difference in list price to sales price OR that may be additional options, upgrades and/or basement finish....

I would agree that new construction data is lacking and for this reason reports for new construction typically take longer to complete.

 

[Pamela Crowley (Florida)]

We have at least one builder here that has his 'pet' appraiser, refuses to give any information to any other appraiser, and tells any that call to call that appraiser who refuses to give any information to anyone else.

:twisted:

Add to that:

If the buyer doesn't use the builders lender (usually owned by or a partnership of the builder), the buyer pays extra/all closing costs.

The flat refusal of the builders and Realtors involved to divulge any concessions....

What do you do??? We all know they are hiding the facts.