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Mortgage Lending - USPAP/ethics

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Bonnie Nach

Freshman Member
Joined
Nov 28, 2002
Professional Status
Certified Residential Appraiser
State
New Jersey
I am a state licensed appriaser in the state of NJ. (newly licensed) and have the opportunity to sell mortgages. IF I were to do this, I obviously would stay very far away from appraising any of the properties involved in my mortgage sales..
i was wondering what the law/USPAP has to say about this? I will look into this more on Monday, but wondering if any of you had any feedback.

Thanks
Bonnie
 

Peggy Wright

Sophomore Member
Joined
Mar 16, 2003
I am new also. Basically, if you are a disinterested 3rd party, you can do an appraisal. That means no no on doing anything appraisal wise on anything you are funding. But, there should be no conflict in doing both activities, as long as it is separate. Just like many appraisers sell real estate.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Bonnie ~

Look into NJ's licensing requirements for a person originating mortgages too.

And, find out from your "employer" if they are going to let you appraise for any of their loans?

I say this to give you the perspectivie of how much you can expect to earn.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
If you have a financial interest in a property, you have to disclose it in order to conform with USPAP.

Just remember, your conflict of interest is very high if you are appraising for your "lender employer". Conversely, other lenders can see a conflict in that you are trying to sell loans while making appraisals on their loans; and God help you when an appraisal doesn't make. I can see calls to the NJ appraisal board that you deliberately low-balled their loan to redirect the loan to your "lender employer". Also, if you do any appraisals on loans for your new "lender employer", if a loan fails and is foreclosed on, you're much more likely to be on the hot seat for an overvalued loan than a typical appraiser. And this can lead to claims of collusion and fraud.

That being said, it's like the old song: "It's time to make up your mind..".
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Roger:
An excellent and well thought analysis of why Bonnie's position as a 'dual profession' individual is far more dangerous than say Jeff Horton's in attempting Home Inspection and Appraising.

Bonnie: I really think Roger has nailed several reasons why in your case this really is a bad idea. The possibilities for CLAIMS of collusion, obstruction, or out right theft of service are frightening. Even with full disclosure the number of folks on all sides of the transaction(s) who could claim :huh: to have been harmed are far too great for ME to take such a chance: and I am known as one who always asks "Why NOT ?":angry: , before deciding if I should or should not pursue a course of action.

Regards,
Lee Ann: Loudly advising, Pick ONE and run with it...
 

xmrdfghap

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Florida
Bonnie, I would chose one or the other. If doing mortgages is attractive to you, offer to do preliminary reviews of every appraisal that comes through the office......either on salary or by a flat fee per appraisal. This will give you great experience and would help you meet the 2000 hour requirement should you decide to become a full time appraiser in the future.

There are more appraisals out there than mortgage work. Although more difficult to find, you might consider doing work for a specialist.......commercial, farm, condemnation, etc......but stay the H away from residential mortgage work.
 
W

walt kirk

Guest
Bonnie,
I am also a N.J. appraiser and I have been a real estate salesman and broker. Like you I have had the opportunity to get into the mortgage business. I have determined that it would be ethically impossible to both appraise and provide mortgages. You may be experiencing the "Grass is always greener" syndrome that many of ue experience from time to time. Choose one profession and stick with it for maximum success.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Lions don't lay down with the sheep. Baaaaaa, baaaaaaaa. Don't do it!

I have had several mortgage loan officers take my appraisal course, they just can't see why we can't do this or that. Never the twain shall meet. Chose one or the other.
 
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