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Regulation of banks

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Peter LeQuire

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Retired Appraiser
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Tennessee
I am under the impression that federally insured banks (or their employees) are prohibited from not paying for appraisals and from witholding future appraisal assignments as "punishment" of appraisers who do not reach a stipulated result in and appraisal.

Is this (reasonably) accurate?
 

George Hatch

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The prohibitions are in place. Enforcement of those prohibitions may be another story.
 

Peter LeQuire

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George -

Are those prohibitions in FIRREA, or do they fall under the OCC regulations?
 

Lloyd Bonafide

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Certified Residential Appraiser
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I am under the impression that federally insured banks (or their employees) are prohibited from not paying for appraisals and from witholding future appraisal assignments as "punishment" of appraisers who do not reach a stipulated result in and appraisal.

Is this (reasonably) accurate?

That's just meaningless paperwork. Let's get back to the real world. :icon_mrgreen:
 

George Hatch

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They're written into the regs and policies at all the banking regulators, including but not limited to the OCC.

The bigger question is this particular loan file would ever come to the attention of the banking regulators, either during the normal course of their examinations or in the event of a later loan default.
 

PL1957

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Jul 19, 2004
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Certified General Appraiser
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Illinois
They're written into the regs and policies at all the banking regulators, including but not limited to the OCC.

The bigger question is this particular loan file would ever come to the attention of the banking regulators, either during the normal course of their examinations or in the event of a later loan default.
What I've done in the past, when faced with a loan officer who flat told me she wasn't going to pay for the appraiser because they couldn't make the loan based on my number, was to relate the conversation to the bank's compliance officer. I indicated that, unless I was paid immediately, I was going to formally complain in writing, to the bank's regulator. They FedExed a check to me overnight. Nobody wants anything brought to the attention of the regulators - ever.
 
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George Hatch

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California
Speaking personally, I've never once had a bank officer at any regulated lender even suggest that they wouldn't pay an appraisal fee. I've had a couple of them whine about having a hard time paying due to their failure to collect the fee from the borrower via oversight, but they've always come through in the end.
 

Calvin the Airedale

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Ohio
What I've done in the past, when faced with a loan officer who flat told me she wasn't going to pay for the appraiser because they couldn't make the loan based on my number, was to relate the conversation to the bank's compliance officer. I indicated that, unless I was paid immediately, I was going to formally complain in writing, to the bank's regulator. They FedExed a check to me overnight. Nobody wants anything brought to the attention of the regulators - ever.

Compliants filed in writing (including emails) to the OCC or OTS are taken seriously. The examination staff provides the initial compliant to the CEO of the institution and he has so many days to answer the complaint. The CEO is liable for providing the examination staff an answer.

Since $hit rolls downhill, and CEOs have better things to do, valid complaints generally come to a quick resolution.

PS. A quick resolution for the OCC and OTS is 30 to 60 days.
 

timd354

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Jan 11, 2008
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Maryland
Speaking personally, I've never once had a bank officer at any regulated lender even suggest that they wouldn't pay an appraisal fee. I've had a couple of them whine about having a hard time paying due to their failure to collect the fee from the borrower via oversight, but they've always come through in the end.

My experience is the same, I have never, ever had any trouble of this type at all from any bank affiliated mortgage company. The only people who ever tried to to pull this type of BS with me have been mortgage brokers...that is why I am extremely picky about working with mortgage brokers and will never do an appraisal for a mortgage broker unless the fee is COD or unless I know the mortgage broker very well and have a long existing relationship with that broker.
 

Terrel L. Shields

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May 2, 2002
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Certified General Appraiser
State
Arkansas
I am under the impression that federally insured banks (or their employees) are prohibited from not paying for appraisals and from witholding future appraisal assignments as "punishment" of appraisers who do not reach a stipulated result in and appraisal.

Is this (reasonably) accurate?
Your impression is accurate. The devil is in the details. I know a lady who did 40 appraisals in a portfolio of properties for a regulated bank. They assumed, for some reason that it would cost $5000. She bid it at $250 each. They collected only $5000 from the borrower. In the end they didn't make the loan. They paid her the $5000 and when she asked for the other $5000, they said, not their problem. She charged too much.... This is an arkansas bank that rhymes with Banque of the Aux arcs... When she called the FDIC, they didn't want any part of it, and when the bank found out she had called them, their review appraiser called her and said her reports were not compliant and he would turn all 40 in to the state if she tried to collect....
Great buncha guys right?
 
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