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Conflict Of Interest

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Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
Just got an order for a REO appraisal. What mad ie interesting was I had done an appraisal on the property about 3 years ago, appraised it for around $600K. Then about 9 months later, the LO called, and wanted it done again, but needed "over 900K to make it happen".....I refused the order since I was told nothing had been done to justify that kind of jump in value. She was a very good client, and understood, and sent it off to one of the local number hitters, I remember her saying he brought it in around 1.1 Million, and it actually (somehow) cleared underwriting.......ANYWAY, now I have this order for the REO appraisal, and not sure if I should proceed with it. Obviously, I do have more knowlage of the property than most people in the market would. I feel that as long as I disclose everything, no big deal, right, or am I off??
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
If you'd just done it and it was your appraisal on the line, well, then, maybe. This was 3 years ago. No conflict of interest at all. New order, new client. Pull the old file out (no need to redraw the sketch and most of the first page of the 1004 is O.K.), and smile broadly as you make some easier money.

Roger
 

xmrdfghap

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Florida
Personally, I would decline the assignment. If you come back at $600,000 it will look like you are trying to justify your prior opinion. If you don't it will appear that your prior appraisal was flawed. It seems to me to be a lose lose situation.

Appearance is everything......if you give the appearance of bias, you will lose part of your reputation. I just don't think one assignment is worth the risk.
 

Travis McGee

Senior Member
Joined
Sep 18, 2004
I would take it if you want the work, just disclose that you did the report 3 years ago. And just treat it like a normal assignment, But on the other hand, if it makes you uncomfortable, decline it. There's always more orders around the corner.
 

liznindy

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Indiana
It's a new assignment.

Appraising the same house more than once does not make an appraiser biased.

The client is wanting your opinion of value. Give them a market supported value...that is what a good appraiser does. Who cares what it was appraised for in the past?!
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
There should be no problem, after all it is a new assignment. I would be cautious and read the entire order provided by the client. I do a lot of REOs and some of the them have rules regarding prior appraisals. Most don't address it at all. Some won't allow you to do the REO if you did the sale or refi in the last 3 years. Some only apply to the appraiser who did the last refi. Some I've seen lately state "The Appraiser Roger Kaputnick who completed the refinance appraisal in July 2000 cannot perform this REO assignment".......I think we'll be seeing many more like that in the near future. That's like having your name on the marquee. :)
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Depends on who your client for the REO is. If it is Fannie Mae they do not want the REO appraiser to have appraised the subject property at any time in the past five years. That is right in their guidelines when they order a REO appraisal. Occasionally they will accept an appraisal from an appraiser that has completed an assignment in the past five years, under unusual circumstances. And then the appraiser should disclose the date and client of the previous appraisal. When the REO appraisal is ordered, it is unknown if the foreclosed mortgage was based on the previous appraisal or not. So discuss the order with your client before proceeding, and if they give a go ahead, explain, explain, explain.
 

Patrick Egger

Sophomore Member
Joined
May 29, 2003
Professional Status
Certified General Appraiser
State
Nevada
Been there ... done that, like most of us have. No conflict technically, however from your comments and knowing what you know about your previous appraisal, the subsequent "numbers job" etc, it would be difficult to believe you could go into the assignment without some bias ... real or preceived.

I would suggest you pass or at the very least advise the client in writing of your experience with the property. Should it end up in court at some time soon ... I believe an attorney would make it appear that you are biased in this situation and the time and trouble isn't worth it.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Jo anne....I just checked the five fannie mae REO appraisal request on my desk and I can't find any reference to prior appraisal or appraiser, could you fax me that information?

719 528 6401

Personally, I would not want to do an REO appraisal on a property I previously appraised.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
MHM ~

Just tell your client when you last appraised that property and let them decide if you are eligible to do the REO.

You don't have to disclose assignments you did not accept, for whatever reason, unless you want to point the finger at that supposed company -- which probably in part contributed to the REO situation as you indicate.

Bias is in the heart, not in the head!

I would do it if the lender accepted me under the above stipulation.
 
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