Filing complaints--question

[Tater Salad]

I know this has been discussed, but with so many topics on filing complaints/requesting investigation on possible fraud, I couldn't locate a response to my question. Hope someone won't mind rehashing this.

My husband completed an appraisal on a split-level in our area and his opinion was about $40k less than the last appraisal. The homeowner was irrate, said that she used to be an appraiser (didn't question her on that one) and faxed a copy of page 2 of the old report to "prove our incompetence".

This other appraisal was completed about six months ago, and upon verifying the comps we found that the sales exist, sale prices are correct, but all information about the dwellings is fabricated. One two story home is listed as a split, and all GLA is bs, reduced by 500sf or more. She didn't have the entire report, but the subject info appears to be correct.

We know that this is fraud. This "appraiser" is still in business. The tax records are good in this area, and there is no excuse for the GLA and home styles to be incorrect. I know mistakes happen, but this is obviously not a mistake. My 5 year old can tell the difference between a split level and a 2 sty.

This appraiser lives in Illinois (I'm in St. Louis) so this is not uncommon. It is unusual, though, that the original lender who is located in the same county as the subject (in Missouri) would commission someone from across the border to perform this appraisal. We have no shortage of appraisers in the immediate area. I hope this means that there is a shortage of number-hitters here (yah, right).

Since I am not an intended user and was not engaged to do a review, can I still bring this to the attention of my state? And how, without making it look like back-biting? What would you do?

 

[George Hatch]

Calotz,

I would tell your borrower that she is absolutely correct; there is appraiser incompetence and/or malfeasance afoot. Have her send in both appraisal reports to your state board and tell them she has been mortally wounded and will not rest until one of the appraisers gets disciplined. Get copies of the appropriate complaint forms, hand her an addressed and stamped envelope and encourage her to pursue it until she gets satisfaction.

Of course, I would only do this if my confidence in my own work product is extremely high (and who among us does not have this kind of confidence?). I'm hoping all the little details that the state board would be looking for in your report are sufficiently covered. Other than that, sic your borrower on both of you and let the state board sort it out.

Your borrower probably won't like how it turns out, but she doesn't need to hear that from you. Your eagerness to turn both reports over to the state board should be the tip-off. This is kind of like saying "Put up or shut up".

George Hatch

 

[Jeff Horton]

I like Georges reply! I have one on my desk that I have to turn in. Its a case of using better sales to make the deal work. I went to our State Boards web site and they lay out what you have to do to file a complaint. I am in the process of getting the data together to show that the comps were superior and that better comps were ignored. I hate to turn anyone in to our Board but this is either incompetance or fraud. Either way something needs to be done. I feel we have an obligation to police our own.

 

[Tater Salad]

Good answers. I wish I had the confidence that the borrower would follow through.

But I take it from the replies that there isn't much I can do as I don't have a stake in the original report? Other than my chosen profession could go down the tubes because of people like this.

As we all see, as long as the borrower gets the value somewhere (she may go to another lender and use this old appraiser), they have no complaints until the money train derails. Generalization, but usually the case on refis.

So, is that the answer? I can't do anything until I actually get an assignment to review this creep, or get a complete copy of the report?

 

[Pamela Crowley (Florida)]

calotz,

I would use what you have and file a complaint anyway. Send in what you have. What you have described is fraud.

 

[Mountain Man]

Ditto for Georgia. They will take any complaint (form HO, LO :lol: , investor, appraiser, or anyone elses) that is well supported with the documentation. I don't need a "review order" to turn in some worm that crawled up from below. Ever notice how they sqirm when displased on a smooth putting green or asphalt? That is what they look like in courtroom too.

 

[graindart]

Maybe it's just me, but I wouldn't want the homeowner sending in both reports and demanding blood. Yeah, the other appraiser will get a harsher punishment, but if people are picky enough they can find something wrong with almost any report; and chances are that they'll find some small thing on one of your reports and suggest you take a CE course as your "punishment". I guess I see too much of politics in the state board system with less emphasis on fairness. Also, too much of appraisal is based on opinion. I've been at the board meetings watching a couple of board members pushing for disciplinary actions for something; only to have another board member disagree and say that they themselves do that very thing.

Of course I'm not saying that appraisers that fabricate figures and amenities should be allowed to continue appraising, I'm just saying that the current state board system just doesn't seem to work all that well.

 

[George Hatch]

Calotz,

You can turn in a complaint if you want to badly enough, and it shouldn't backfire on you unless your appraisal report has some real problems. My previous reply was oriented more toward the idea that the borrower was pitting two appraisers against each other and implying that yours' was the wrong opinion of value (hence the "put up or shut up" comment). I prefer to have borrowers and clients refer complaints to the state so as to remove or reduce the appearance of sour grapes and personal rivalry between appraisers from the complaint. If the complaint has any merit, it can be judged accordingly. If not, then it will get dismissed. That is, unless you happen to live in one of those states that require a felony conviction before the state board will discipline an appraiser.

George Hatch

 

[Tater Salad]

Mr. Hatch:

I don't have any idea how Missouri is on dicipline. I do know of a few appraisers that are on all the lenders' black-ball lists but are still licensed. I have to assume that it's because they haven't been reported. I would hope that they aren't just getting slapped with continuing ed. Who knows for sure?

I wanted advice as I don't want to stand by and let it happen, but I didn't know if page 2 alone (which is very incriminating) can be the basis of a request for investigation.

I stand behind our work and have no fear of legitimate reprisal; it's the 'not knowing' about the MO board that's a little uncomfortable. Guess I'll do some research and see.

Thanks all for the comments.

 

[Bill Plunkett]

I made a vow three years ago not to let ANY bad appraisal (Defined as 25% over valued, made up comps, total fabricated amenities, etc. )go by without bringing it to the state board's attention. I tell the client in block 12 how and who they need to contact at the state to file a complaint if a review. If a situation like yours arises "we have an appraisal for zzz more than yours.) I always ask for a copy "To assist me in reevaluating our appraisal".

Why. Because it is absolutely MORALLY unthinkable how some of the reports we see are completed. I have no problem sleeping at night.

Nine appraisers turned in this year a total of 17 reports. Highlights:

Manufactured home appraised as modular all site built comparables- Owner taking lender, appraiser, and sales person to court. Board fined appraiser $1,000 and no manufactured homes 24 months.

Home sever water damage (Stucco) engineer report $175,000 structural repairs needed. Sold at aution $200K-- Two Weeks later JERK appraised for $475,000 not mentioning previous sale or any deffered manitenance.
Lost license

Home appraised for $40K more than any previous sale in 15 year old S/D of 100+/- homes-- Went out of developement for all comps--All ages of comps doubled in report.. Ignored 29 sales last 12 months in developement-TWO ACROSS STREET-ONE SAME FLOOR PLAN!!! Action pending.

Land home comparables used as only comparable properties in manufactured reports ignoring arms length sales same S/D 4 reports--Total fines $2,500- No manufactured home assignments two years, signed letter will give up license if found in violattion.

etc, etc...

You and I can not compete with these type appraisers. Unethical appraisers can ruin this profession.

By choice this office of five complete approximately 300 reviews a year now.

Benefits!! Satisfaction, good standing with Board, Clients that respect our work and us. Yes, any report can be found lackin if one looks hard enough We don't do that. We applaude good work and state it when we see it.

That's our tune!!

Bill