New problem for a newbe

[Ray Miller]

Have a new problem tonight.

The play, the cast two lenders, one owner, one new appraiser.

Received an order from lender number 1 to appraise a home. Set the appointment for Wed. Oct 16, 02. Then this afternoon lender number 2 calls me and says she understands I am doing an appraisal on a house at such and such for such and such. To call her before I start the appraisal if I think the property will not appraise out at such and such. They will pay me a trip charge. If I think it will appraise out at such and such, go ahead and do the appraisal. Collect COD from owner. Now in the order from lender number 1, also calls for it to be a COD.

Now if I understand my USPAP correctly I can only work for one lender, person at a time. :? Which in this case the owner because she is paying the bill up front. Do I tell her to pick one of the lenders? Do I call each lender and tell them I have a double order to Appraise this property and I can only work for one. Both lenders want the appraisal to be sent to them direct.

By the way both lenders send me equal amounts of business. And being brand new in the Real Estate Appraisal business, I really can’t afford to _ _ _ _ both of them off. One is going to be bad enough.

And I was told in school that appraisers do not have problems. :roll:

 

[Larry Lyke]

Ray --

Most situations in your career are a problem only once ...

Start with the process of elimination: There's only 2 ways this 2nd lender could know you are doing this appraisal: 1) The 1st lender told them because the 2nd lender is doing a 2nd mortgage for the 1st lender; 2) or the Homeowner is making these arrangements.

My opinion:

I would call the 1st lender (not disclosing who the 2nd lender is that has contacted you) and ask them if they are doing a 1st and a 2nd on this property -- through somebody else?

They are your ONLY client regardless of how you see this thing playing out. So, if you end up tipping them off, so be it.

BECAuSE of your conversation, the 1st lender, if not working with or through the 2nd lender on a 2nd, may very well because of your conversation solicit the Homeowner for that 2nd loan.

There's other ramifications about doing 1sts and 2nds separately, but that's not the topic here.

Best o'luck.

 

[George Hatch]

And I was told in school that appraisers do not have problems.

You're kidding, right???

As for your situation, remember that the Client is whomever engages you, not necessarily the person who pays you. The borrower pays in a COD situation because it's the cost of doing business; that doesn't make them the Client.

Now, as for which of your lenders to send the report to, you don't really have much in the way of options without causing potential problems for yourself.

This is exactly one of the situations the Confidentiality section of the Ethics Rule was intended to cover. As far as confidentiality goes, Lender No.1 is the original client because they engaged you; the other lender didn't really even engage you and they are not technically the Client in this transaction. In fact, it can be argued that they are trying to poach the deal out from under Lender No. 1 and they want you to help them do it. Talk about sticking you in the middle of a range war....

You can call Lender No. 1 and tell them that there is another lender in the chase who has contacted you and asked for a copy of the report. All these lenders understand that fee appraisers have multiple lenders as clients. It should come as no surprise that they have some competition on the same deal. Lender No. 1 will either allow you to list Lender No. 2 as an additional client or they won't (I wouldn't hold my breath). If they decline, you should promptly inform your Lender No. 2 that you have been prohibited from accepting their engagement. Your hands are tied, and you dasn't dare try to make an end run around confidentiality. You can be sure that if you try, one of your clients will be P.O.'d at you and the other will lose all respect for you. It will be like hanging a "WELCOME" mat on your back.

"We don't make the rules, we just have to live by them. I have to protect my appraisal license" Explain it to them that way and I'm sure they'll understand. Appraisers are of no use to a lender if they lose their license.

Now I'm sure that someone else on this forum will suggest you just take the money from as many different clients as you can and run. They always do. "Different client equals a different assignment." Just remember that you are prohibited from disclosing confidential information or the results of an assigment to anyone other than the client and those parties specifically authorized by the client.... Confidential information includes anything in your report that involves your analysis, opinions and conclusions, which pretty much covers about 80% of the average appraisal. If you can think of a good way to explain to a state board how two identical appraisal reports (only the names have been changed) are not disclosing such information then go for it. Just keep in mind that your original client will find out about it if you try to get over on them, and they will probably remember it when times get slow.

George Hatch

 

[Ray Miller]

8) I wish to thank each one of you for your sage advice. No way would I attempt an end run. I have learned that is for football only. My question to the group here was to reinforce my thinking on the subject.