Quality Control audit

[Chris Colston]

Sometimes the investor may not want the MB to know that they are under investigation. That was the point of my email to John B. @ TAF and he agreed with what I said. I never know where these things are going - do you?

Sometimes (more often than not) it is Fannie Mae that has ordered the audit! The auditing firm is not going to reveal their client to you (per GLB) anymore than you would reveal your client to them. The auditing firm is sending similar type letters to the borrower's employer, bank; inorder to verify bank statements, credit reporting agencies and any other entity in the entire loan package. In this day and age of electronic everything it is easy to falsify employment verifications, bank statements, credit scores and reports and yes your appraisal report. Something about the file flagged an audit, not necessiarily your appraisal, but something was not quite right about the loan package presented to the INVESTOR. Like it or not...the final INVESTOR (the guys with the mortgage money) is one of those INTENDED USERS who will be making the final mortgage descion, not the mortgage broker you sent the report to. The auditing company may be MARI or the PRIESTON GROUP or one of 6 private firms that do this. As stated in the other thread on this issue, (see Otis' posts) these companies are as restricted by GLB and confidentiality as we are. To "round file" these requests does a disservice to the entire process.

We cry and moan about getting the skippies and less than reputible lenders out of the business, one way is to cooperate with the audit request, without violating USPAP. If all they are requesting is a simple YES I did this report, The report appears to be the same as I submitted to my client and YES this is my signature without revealing anything else about the report I do not see the harm in cooperating. You could be the link to a larger problem with the file, that will have nothing to do with YOU. If you "round file" the request, you just hold up the process and may actually be contributing in a round about way to the fraud that the audit is trying to reveal. Perhaps the customer getting the loan they should not have gotten in the first place and the originating brokers going about their merry way putting consumers into loans they might not actually be able to afford.

 

[Steve Owen]

Don't just round can it... respond appropriately

You do not have to respond to a request from anyone but the client and even then you must do so in a lawful manner. A client cannot require that you produce documents from your work file. Only a professional review committee of a professional organization you belong to, a state regulatory agency, and a court of law can require that.

Be careful what you provide to anyone.

As of now, that's exactly where I stand.

Sorry, Chris, but IMHO, Fannie helped create the problem (and fact, was the primary creator). I don't see how violating confidentiality for them at this juncture can solve the problem. If they want to eliminate fraud, there are a lot of better ways to do it than by asking appraisers to violate their standards.

 

[Otis Key]

<snip> Like it or not...the final INVESTOR (the guys with the mortgage money) is one of those INTENDED USERS who will be making the final mortgage descion, not the mortgage broker you sent the report to. The auditing company may be MARI or the PRIESTON GROUP or one of 6 private firms that do this. As stated in the other thread on this issue, (see Otis' posts) these companies are as restricted by GLB and confidentiality as we are. To "round file" these requests does a disservice to the entire process.

We cry and moan about getting the skippies and less than reputible lenders out of the business, one way is to cooperate with the audit request, without violating USPAP. If all they are requesting is a simple YES I did this report, The report appears to be the same as I submitted to my client and YES this is my signature without revealing anything else about the report I do not see the harm in cooperating. You could be the link to a larger problem with the file, that will have nothing to do with YOU. If you "round file" the request, you just hold up the process and may actually be contributing in a round about way to the fraud that the audit is trying to reveal. Perhaps the customer getting the loan they should not have gotten in the first place and the originating brokers going about their merry way putting consumers into loans they might not actually be able to afford.

Chris, not picking on you and you know I respect a lot of what you say and know, but I don't agree here. I'd suggest that everyone go back and read that thread that I posted the link to. I sent a very specific email to John Brennan just because of a similar situation that's posted here. His response to me, while not verbatim as required by the reply (it's very close tho) was clear to me that I can neither admit, confirm or deny any knowledge of that report. As much as I hate that, we can't stop the bad appraisers and mortgage brokers, I don't see any way that you can dance around the Confidentiality aspect of USPAP. TAF is going to have to get off the fence and clarify something specific to this.

You say that we all know that "the INVESTOR" is the final intended user. No arguement about that. However, who is that final investor? Did you identify them by name as an intended user? I just completed a 4-plex appraisal by the university; MB sends it to a Freddie approved (or should I say endorsed?) investor who had it reviewed and STIPPED the report; I responded and then got paid; however, the MB took it off to another investor and they accepted the report "as is" with no STIPS. So who was the final investor that I didn't know or identify?

 

[Chris Colston]

You say that we all know that "the INVESTOR" is the final intended user. No arguement about that. However, who is that final investor? Did you identify them by name as an intended user? I just completed a 4-plex appraisal by the university; MB sends it to a Freddie approved (or should I say endorsed?) investor who had it reviewed and STIPPED the report; I responded and then got paid; however, the MB took it off to another investor and they accepted the report "as is" with no STIPS. So who was the final investor that I didn't know or identify?

USPAP does say we can identify by TYPE, does not have to be a formal company name.

 

[Otis Key]

USPAP does say we can identify by TYPE, does not have to be a formal company name.

And I say again, how are we to know who it is and if this is real or not? I see your point, but I can't see a way to step around the client/appraiser confidentiality aspect of USPAP without contact from "my client {eg the MB slimeball}" or a better and specific clarification and/or statement from TAF. I want it to stop as much as you. But not at the risk of going before the state board that I"ve sent so many reports to --- man, talk about a vendetta then.

 

[Steve Owen]

USPAP does say we can identify by TYPE, does not have to be a formal company name.

If it's on the new form, the client is identified as intended user. I'm not positive, but I believe Fannie will not allow any change in that (will have to go back and review my class unless someone here knows for certain).

 

[incognito]

Joshua,

I receive at least 2-4 of these a week, all for appraisals I do for one particular company, all for new construction homes. I don't even open them. I think you have a pretty good idea of what is right by re-reading your original post:

They attached a Borrower's Certifiaction & Authorization form to the letter. This is a form where the BORROWER agrees to let the "Lender and the mortgage guaranty insurer (if any)", to "verify information contained in my/our loan application and in other documents required in connection with the loan".

HOWEVER, the borrower is not the client. They do not have the ability to release the appraisal to this other 3rd party. I feel that the original client should be the one's to tell me it is OK to talk to this third party, etc.

As you state, your client is the lender, not the borrower, and unless you get authorization in writing from the lender, toss it......

 

[Steve Owen]

We need something different than what USPAP says now

I might add, that while I stand as previously posted on this issue today, that could quickly change. All that has to happen is for the ASB to come up with a modification to the regs that allows for appraisers to respond to this kind of audit. They could do it through a new Statement (my personal preferrence), through an AO, or possibly even through an FAQ. If they had guidance on a specific format that would allow you to respond, and specify exactly what you can reveal and to whom, I would probably have no problem with that. However, until they act, I believe things are the way they are and I believe that does not allow a response to this kind of question (just my personal opinion).