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Hybrid Companies and USPAP

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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. )
I'm with you ILT - Sometimes on AF, a legitimate discussion feels like the OP gets blamed or picked on.

I understood what you were talking about from the very start, and I would absolutely share your frustration.

It is unfortunate that most in the mortgage processing/investing world, who claims to care, really don't. They'll shoot revisions for the things flagged, and once revised, everybody moves on until there is some big event that exposes the real ugliness.

Once out of the banking world, I was sought out to do forensic reviews of appraisals for government enforcement officials. Some of the things I saw should have been caught by everybody in the pipeline, but obviously nobody said anything until there were massive losses. My preaching dad would say something along the lines of - "There's a great harvest of everything we sow, whether it is good or bad." Hang in there.
 
Well... I live on a state line and have 3 states within 20 miles - so why am I 'incompetent' simply crossing lines. And if the GSEs are accepting 1004s from distant appraisers??? Are you sure these are 1004s? I mean that does not sound like the regular 1004 I am familiar with... So the first thing I want to know is where are these reports going to. I seriously doubt it is a GSE. If for a private hedge fund or private bank- I suppose they can use trainees, appraisers, or the village idiot.

The appraiser must, at a minimum: (1) perform a complete visual inspection of the interior and exterior areas of the subject property, (2) inspect the neighborhood, (3) inspect each of the comparable sales from at least the street, (4) research, verify, and analyze data from reliable public and/or private sources, and​
When I lived in Memphis, I appraised in Mississippi but I had a reciprocal license for that state. Still had to inspect the subject and comps myself.
 
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.
Too bad the old DW the state investigator is not here.
 
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. )
Numbers 1 and 4 seem to tell you exactly what they plan to do with you and yiur hard earned certification. How do you know they are not already creating profiles with your information? This is just beyond.
 
Too bad the old DW the state investigator is not here.
He is. And he already chimed in. :)

Sending a trainee out to inspect, and then having another appraiser, who did not inspect, being the only one to sign a 1004/70 is fraudulent. Period. Swift action would be taken against anyone engaged in such practice.

All the OP has to do is contact me - and if what the OP states is true, then I hope that happens
 
Aloft is a technology company that does appraisals.
Don't quit your day job Matlock.


is building a team of expert appraisers who want to collaborate, contribute, and coach. Appraisers are the star-of-the-show at Aloft; we respect your experience and expertise, and we value your voice. Our total focus is to help you succeed (not wear you out). Enjoy a healthy work-life balance while you rediscover your love for this business and help us create the future of the appraisal industry. We’re different; if you are, too, join us!



This is there text to me:
Are you actively doing residential appraisals in county? Aloft Appraisal is looking for Supervising Appraisers who can train and run a team of trainees. We offer competitive compensation and benefits packages, totaling over $k combined! You'll enjoy full benefits, paid vacations, and reimbursed work expenses. Schedule a time
-
Reply STOP to unsubscribe.
 
Here’s a fictional story…

Imagine an appraisal “tech” company, backed by several rounds of millions of dollars in venture capital, founded by individuals who have no background in appraisal at the height of the refi boom, opening offices in every major market across the United States, working from behind the veil of NDAs and non-competes, buying industry credibility by aligning their brand with well-known appraisers only to have market conditions abruptly change, and nowhere near the volume needed to return money to their investors. What sort of desperation would company leadership, again themselves not bound by USPAP, resort to in order to keep their operation afloat?

If I were reviewing appraisals for an entity, lender, or enterprise that was relying on many thousands of reports prepared by this type of operation, I would probably pay extra close attention to their reports, and make sure I completely understood their business model.
 
He is. And he already chimed in. :)

Sending a trainee out to inspect, and then having another appraiser, who did not inspect, being the only one to sign a 1004/70 is fraudulent. Period. Swift action would be taken against anyone engaged in such practice.

All the OP has to do is contact me - and if what the OP states is true, then I hope that happens
Glad to hear it! They are not State licensed trainees according to OP, how does that even happen?
 
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