Ethics Question

[George Hatch]

I am not going to file anything, as I don't know what this person is capable of with all my personal information. I will avoid his calls like the plague, I literally saved his number in my phone as "avoid like the plague" and I will make sure everything is in writing from now on. I will do a 1004D, if requested and then I am cutting all ties with this person. I am so pissed that AMCs get away with this type of behavior and take a large cut for essentially doing nothing. This industry needs to be restructured somehow. AMCs are just an extension of the lender, Dodd Frank has failed miserably. Also, every appraisal should show the lender on a specially designated page, like an invoice, how much the appraiser is being compensated,. I know a couple reputable lenders that I work for make us do that. The lender should know how much the AMC is pocketing, for most time, essentially nothing.

AMCs are supposed to act as the extension of the (actual) lender. It's fully intentional. That's a feature, not a bug. The only other party besides the lender with a legitimate claim to the right to control the appraisal engagement are the downstream investors or other users such as the GSEs, FHA, VA or the like.

The two parties in this transaction who are not among the intended users of the appraisal and whose usage is different and sometimes in direct conflict with the stated intended use of those appraisals are the borrower and the loan originator, whether that loan originator is an outside broker OR part of a lender's loan origination dept.

 

[RCA]

I was assigned an FHA appraisal last Saturday night by phone call from a small (I think one person) AMC, which started our relationship by asking (paraphrasing here) "if I would consider looking at a contract price and saying if I can make it work", which was a big red flag to begin with. I obviously stated that I cannot do that. Next, the AMC tells me to change the lender name and address post effective date, while I am wrapping up the assignment, and they did so on the AMC portal without hesitation, I always save and print the LOE as soon as I get it. I asked about this in the morning here on the forum, and was told by several of you that this is a no no. I told him that I can charge him a cancelation fee and start a new file for a new fee. Finally, the contract price was originally $720,000 and then the seller countered to $740,000. My final opinion of value which is fully supported is $710,000. So, I get a call asking if I would reconsider changing my adverse location adjustment, which is only 2.5% one line, and is fully supported, and the person tells me they think the original $720,000 contract price was "on point," not sure how they came up with that since it could have easily been lower in this market area with the current market conditions.

I have never had someone from an AMC call me at strange hours during the week and weekend and I have never dealt with these types of hard ethics dilemmas. Any suggestions? Should I just cut this person out completely? Isn't the entire point of Dodd Frank for the middleman to not have an agenda and provide a "on point" verbal opinion of value to me over the phone. Any advice, input, or guidance is greatly appreciated. What would you do? Thanks!

This sounds like a mortgage broker on the other end. These guys are still around, maybe wearing a somewhat different hat.

AS SOON as I see who I am working for, i.e. someone asking me to do something really dumb, I exit the assignment without charge. In fact, if they insist that I take cancellation payment, I refuse - because they will want any photos I have taken - if I have gone that far. ... But I keep my distance from trouble. I think I received two such orders through ANOW last year and that is a pretty big outfit. - However, I have also received a number of pretty good orders through them as well.

 

[CGinMN]

I can almost guarantee the pressure from the AMC is coming from the LO. Expect more of these shenanigans as lenders business opportunities dry up.

 

[George Hatch]

Regardless where it's coming from if the AMC is transmitting it then they're in violation of the law.

 

[Deleted member 157170]

Hmm. The last time I had a lender come at me like that, I told the AMC, "Unfortunately I will not be able to communicate further on this order because of undue influence by the lender".

It sounds like you probably did everything you needed to on the report. If the lender doesn't want to accept it, that is their problem, not yours. I would just let it be and not do any more work for them. And I totally agree, not making a fuss is probably for the best. You never know how things will pan out with complaints about that kind of stuff.

 

[Mike Ault]

Withdraw from the assignment. Bill them for the work you have already done and move on. Alternatively, though it's not worth the trouble and won't really accomplish anythin other than eating up your time, you can file a complaint with the AMCs compliance officer.

Sometimes the system works as it should. I once had an underwriter from a large national lender demand that I lower my value. She was stupid enough to show my rather impolite response to the person in charge of the appraisal panel who informed me that they were going to order a field review. I told her that's the way it's supposed to work, you can set your loan limits based upon my value or the field review value, whichever value you feel more comfortable with. I also told her that the borrower had already seen a copy of my report and I wasn't about to change anything based on "feelings" of someone who doesn't possess an appraisal license and has never set foot on the property. It worked out that my value stood, and the mouthy "Karen" underwriter no longer worked for that lender afterwards. One thing you don't want floating around out there is an appraisal with two different values on the same effective date and your signature on both of them. Nothing good can come from that.

 

[George Hatch]

One thing you don't want floating around out there is an appraisal with two different values on the same effective date and your signature on both of them. Nothing good can come from that.​

That's an excellent point that people tend to lose sight of.

 

[Carnivore]

The property received 3 offers over 120 days ranging from 650,000 to the 720,000 price that was then increased to 740,000 with a counter offer by the seller. My job is to appraise the value of the property, not make a deal go through. They can easily renegotiate and move forward or order another valuation. Not my problem. The fact that coming in low is an issue and can get you blacklisted by an AMC is disturbing. I don’t want to deal with those types of AMCs anyways.

Yeah, I personally know an appraiser that always meets the exact contract price or a little over. I don’t like him. His logic is that if someone is willing to pay, that is what it’s worth. What is the point of appraisals with this type of logic?

Cause and Effect Reasoning.

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[J Grant]

I was assigned an FHA appraisal last Saturday night by phone call from a small (I think one person) AMC, which started our relationship by asking (paraphrasing here) "if I would consider looking at a contract price and saying if I can make it work", which was a big red flag to begin with. I obviously stated that I cannot do that. Next, the AMC tells me to change the lender name and address post effective date, while I am wrapping up the assignment, and they did so on the AMC portal without hesitation, I always save and print the LOE as soon as I get it. I asked about this in the morning here on the forum, and was told by several of you that this is a no no. I told him that I can charge him a cancelation fee and start a new file for a new fee. Finally, the contract price was originally $720,000 and then the seller countered to $740,000. My final opinion of value which is fully supported is $710,000. So, I get a call asking if I would reconsider changing my adverse location adjustment, which is only 2.5% one line, and is fully supported, and the person tells me they think the original $720,000 contract price was "on point," not sure how they came up with that since it could have easily been lower in this market area with the current market conditions.

I have never had someone from an AMC call me at strange hours during the week and weekend and I have never dealt with these types of hard ethics dilemmas. Any suggestions? Should I just cut this person out completely? Isn't the entire point of Dodd Frank for the middleman to not have an agenda and provide a "on point" verbal opinion of value to me over the phone. Any advice, input, or guidance is greatly appreciated. What would you do? Thanks!

as you probably know by now, you should have turned this assignment down as soon as the AMC asked about making the contract work

In fact, these requests to violate sound so blatant that it almost sounds like entrapment - though maybe that is paranoia - I mean, what AMC in this day and age is so stupid to come out and pressure like that ( they still pressure but are usually not that blatant )

In any event, this might be wrapped up by now but do not change your value , and imo never work for these clowns again. Even if they pay you, it is not worth it to accept another order.

 

[Long Walk]

as you probably know by now, you should have turned this assignment down as soon as the AMC asked about making the contract work

In fact, these requests to violate sound so blatant that it almost sounds like entrapment - though maybe that is paranoia - I mean, what AMC in this day and age is so stupid to come out and pressure like that ( they still pressure but are usually not that blatant )

In any event, this might be wrapped up by now but do not change your value , and imo never work for these clowns again. Even if they pay you, it is not worth it to accept another order.

You are totally right on all points. This issue is covered in AO #19 in USPAP.