Hybrid Companies and USPAP

[J Grant]

I’m involved in the entire process so they won’t just bid on the report send out a “trainee” and expect me to complete it without my involvement like most of their appraisers.

Why do you keep putting "trainee" in parenthesis?

It the company is sending licensed appraisal trainees to inspect the properties , or are they sending non appraisers to inspect?

 

[J Grant]

Hi!

So I recently started doing work for one of these hybrid companies, mostly out of curiosity since they’ve achieved some significant VC funding.

What I’m seeing now would have been honestly considered beyond the pale 5 years ago, but no one seems to care about the rules anymore, especially with this organization.

1. I was offered a void non-compete/non-solicit which is a Class II misdemeanor in the State of Colorado as of 8/10/2022. Haven’t decided what to do yet as there is zero settled case-law. It was also insanely restrictive, lasting almost two years after termination of the agreement. This was all thrown out already but I have not signed any new documents they’ve provided.

2. Several of the Appraisers that work for this company are licensed in my State but don’t even live within the State. The company sends out “trainees” off of the street that they typically never even communicate with directly, the turnover I’ve seen even after just a month is staggering, and inspection quality is hilariously bad. Honestly I have no idea how these trainees would even report these hours to the State if they ever even got to the required certification hours, which brings me to my next point.

3. There appears to be zero focus or pathway of developing these “trainees” as legitimate appraisers. They are hired and strictly perform inspections, that’s it. They have zero involvement with the Appraiser, zero legitimate apprenticeship, and zero accountability (Colorado does NOT license trainees).

4. Appraisers are hired at a pittance of a salary, yet expected to sign at least 20 appraisals a month to just maintain that salary. This amounts to about 1/4 or less of the total report fee paid to the appraiser, as distributed by the company who takes the Appraiser’s check. They also require you to provide ALL of your client log-ins and relationships - if you refuse, they just make new profiles for you. I have been vehement in keeping them from doing this to me.

5. It’s all about one particular wholesale client, who doesn’t care about MLS photos or “trainees” inspecting. A late report to this particular wholesale client is the end of the world, a revision sitting more than 12 hours is world-ending as well. “Managers” will descend upon you from out of the woodwork at the slightest hint of this Client’s displeasure. They seem to have calls with the CEO basically every day and the company send this client cookies and flowers every week. The staff here also has Fannie managers on speed-dial for “clarification”.

None of this really sits right with me at all, so I’m looking for any guidance anyone can offer as to either make this process accountable to USPAP, or any other avenue to maintain the integrity of our trade. I mean… the report is automatically misleading if you don’t even live in the State, right? I mean the certification states that you viewed the comparables from the street, and I doubt they’re flying over here to do so for every order…

(I will not be disclosing the name of the company or clients for basic CYA, so please don’t ask. You’re perfectly allowed to guess of course, but I won’t be confirming. )

The company sounds awful and if no appraiser would work for them, they'd shut down.

 

[ilikethings]

If that is truly the case than I can assure you that the GSEs would be VERY interested - especially their AQM and fraud teams

What’s ya’lls opinion on these Appraisers not even being located within the state they’re providing standard GSE 1004s for? I talked to an Amrock review appraiser years ago who said he was reporting several appraisers to the state for doing something similar.

 

[ilikethings]

I’m involved in the entire process so they won’t just bid on the report send out a “trainee” and expect me to complete it without my involvement like most of their appraisers.

Why do you keep putting "trainee" in parenthesis?

It the company is sending licensed appraisal trainees to inspect the properties , or are they sending non appraisers to inspect?

Here in Colorado trainees are not licensed, these are people with zero appraisal or inspection experience typically. They send them videos for training and have them inspect 5 orders every day with no knowledge or care about the assignment type or scope of work. They pay for trainees to become licensed in other states and get the required education credits, or they hire already desperate licensed trainees to do the same thing. Again, no legitimate apprenticeship appears to occur.

 

[glenn walker]

What’s ya’lls opinion on these Appraisers not even being located within the state they’re providing standard GSE 1004s for? I talked to an Amrock review appraiser years ago who said he was reporting several appraisers to the state for doing something similar.

Question lots of portfolio lenders use and have their appraisers complete reports on Fannie Forms but their not selling those loans to the GSE'S ..Are you confusing forms with lender users use of those reports ???

 

[J Grant]

Here in Colorado trainees are not licensed, these are people with zero appraisal or inspection experience typically. They send them videos for training and have them inspect 5 orders every day with no knowledge or care about the assignment type or scope of work. They pay for trainees to become licensed in other states and get the required education credits, or they hire already desperate licensed trainees to do the same thing. Again, no legitimate apprenticeship appears to occur.

Imo if these people are not licensed, they are probably not appraisal trainees ( unless CO is some weird outlier state ), they sound like third party "data collectors" who indeed have a short course training and then run around inspect all day

We predicted the hybrids would lead to this kind of fast food /sweatshop type operation - I mean who woulda thought ...

 

[glenn walker]

Here in Colorado trainees are not licensed, these are people with zero appraisal or inspection experience typically. They send them videos for training and have them inspect 5 orders every day with no knowledge or care about the assignment type or scope of work. They pay for trainees to become licensed in other states and get the required education credits, or they hire already desperate licensed trainees to do the same thing. Again, no legitimate apprenticeship appears to occur.

You also said most of these are being done out of State..by out of State inspectors of trainees ?

 

[George Hatch]

If a company is trafficking in conventional 1004s being fraudulently single signed as "I personally inspected" then using non-local appraisers for those assignments doesn't make the situation any worse.

 

[ilikethings]

You also said most of these are being done out of State..by out of State inspectors of trainees ?

The inspector is in the state, the appraiser is in Florida. To me this raises USPAP issues. The 1004 certification states that the appraiser has viewed the comparables from the street, which is impossible, because they live in Florida. This is just one example.

Question lots of portfolio lenders use and have their appraisers complete reports on Fannie Forms but their not selling those loans to the GSE'S ..Are you confusing forms with lender users use of those reports ???

These appraisals are for purchase and refinance transactions, at least 95% of the work is for the biggest names in banking.

 

[ilikethings]

If a company is trafficking in conventional 1004s being fraudulently single signed as "I personally inspected" then using non-local appraisers for those assignments doesn't make the situation any worse.

They’re not appraisers at all - they’re not even licensed - however there is no licensing of trainees in Colorado. I doubt they’re even disclosing significant assistance but I have no evidence of that.