Remove Negative Remarks About the Client

[Drew Barnes (Illinois)]

I was fortunate enough to get 3 e-mails yesterday from an AMC in regards to an appraisal I wrote on Monday. The first was the AMC asking me to consider two other comps. The second was a screen shot from the lenders AVM showing an estimated value and an overhead picture of the subject. The third was a full page rambling of an angry homeowner who did not get the value he wanted. The AMC was very clear in telling me to address each of the borrowers concerns. In the process of researching each of the borrowers concerns, I discovered descrepancies in the information provided by the lenders AVM. (IMAGINE THAT???) The first listed sale was for $166.500 and MLS & county records indicated a $111,000 sale. The second listed sale was for $160,000 and MLS & county records indicated a $107,000 sale. The third listed sale was for $307,000 and the property does not even exist. I checked with 2 departments at the county court house, checked with the developer, and drove by the location and photographed two properties that skip right over the "sale" address. The fourth listed sale was for $131,500 and MLS & county records indicate a $87,200 sale. All of my findings were verified twice. Each existing property has the MLS sold sheet and the Supervisor of Assessments computer screen shot showing the correct sales price in the report. The property that does not exist has an addressed plat map from the county, a letter from the developer, and my photographs in the report showing the property does not exist. After having said all that. I stated that information provided by the AVM was outright fradulent. Now the AMC wants me to remove the negative statement about the lender. Is this a negative jab at the lender or an unfortunate truth backed up by concrete evidence? Should I hold my ground or remove the statement?

 

[RSW]

I don't think I would have called it outright fradulent. An AVM is not an opinion it is computer generated and I don't think computers can commit fraud. I would have just stated that you could not verify the inforation provided by the lender and report what you found. I know it is hard to do sometimes. I get really frustrated at times too when I get those stupid requests. Just take a deep breath, count to 10 and let it go. You may keep a client that way too. Clients are hard to comeby these days.

 

[c w d]

Accusing an entity of fraud is liabelous because it insinuates intent to commit fraud and could wrongly damage an entity's reputation. I would remove the verbiage. State the facts and be done with it. Then, if you feel strongly enough, you can report their actions to the authorities. However, one example of erroneous information proves nothing. It's easily explained as a mistake. Perhaps Pam would be interested. Maybe she has other examples that together really prove something. *shrugs*

 

[Caterina Platt]

Bless you, Drew. You have gone the extra mile and put in a significant amount of additional work on this one.

Here's my approach, and I'm certainly hoping it comes across as a gentle, professional, but backhanded dis at this AVM developer.

Dear zzz,

I have reviewed all the additional information you have supplied me from ABC's AVM product. My documentation and verification of actual closed sale prices are attached.

I regret that this AVM information lead the homeowner's to believe thier property to be worth more than the true data can support. I also regret that this mis-information provided by the AVM has resulted in a significant waste of all our time and efforts. Please note the attached actual sales prices of 3 of the 4 dwellings and the fact that one of these 'sales' does not exist.

I suppose there is a silver lining in this cloud. Had the loan approval been based solely on the AVM report, these borrowers could quite easily end up owing more on their home than it's actual market value. As we all know from current events, this can be disastrous.

I would agree this is quite frustrating for all involved.

Sincerely,
Your diligent, but po'd appraiser

Ok, the sign off isn't what I'd say, but ya know......somedays I just wish we could.

 

[Hamlet]

Excellent response, Caterina!!

 

[Mr Rex]

Heres a recent response to a request to consider AVM sales:

Per Lender request that I review and respond to additional "comparables" provided by an AVM, I offer the following comments regarding the individual "comparables" provided: (Note: AVM does not account for seller concessions, so has a built in error, since public records do not reveal concessions, in addition, AVMs do not account for homes with or without garages, with or without porches, decks, unfinished walk up attics or other improvements etc.) I noticed that the AVM indicated "Confidence Score High, 93". A quick review of the below data indicates that the AVM data has an error factor approaching 93%, rather than any "confidence factor". It is worth noting that the AVM did not properly measure the distance to the comparables either, as #1 & 3 below are in Farmington Oaks, +/- 4.5 miles south. This is typical, as locally homes in new or newer subdivisions do not "geocode" properly and computer programs do not properly place the properties on a map, again illustrating a computers shortcomings in the valuation process.

........Line by line here the missed data in the 7 AVM "comparables provided.....

As illustrated above, the comparables "selected and used" in the original report were the most reasonable and most comparable "locationally, physically and functionally most similar to the subject property" as is required in Certification # 7. Clearly, the computer generated data is suspect at best, if not totally useless, and as has been illustrated by the current mortgage crisis, and many lenders recent changes in policy, should not be used in conjunction with any lending decision without properly reconciling the "Confidence" placed on the computer generated data and the actual percentage of error inherent in any database that does not properly account for the numerous factors that effect value. Factors that an appraiser and the typical purchaser would take into account. The above illustrates this fact as well as it can be illustrated in a brief synopsis of the data provided and analyzed.

 

[Don Clark]

Heres a recent response to a request to consider AVM sales:

Per Lender request that I review and respond to additional "comparables" provided by an AVM, I offer the following comments regarding the individual "comparables" provided: (Note: AVM does not account for seller concessions, so has a built in error, since public records do not reveal concessions, in addition, AVMs do not account for homes with or without garages, with or without porches, decks, unfinished walk up attics or other improvements etc.) I noticed that the AVM indicated "Confidence Score High, 93". A quick review of the below data indicates that the AVM data has an error factor approaching 93%, rather than any "confidence factor". It is worth noting that the AVM did not properly measure the distance to the comparables either, as #1 & 3 below are in Farmington Oaks, +/- 4.5 miles south. This is typical, as locally homes in new or newer subdivisions do not "geocode" properly and computer programs do not properly place the properties on a map, again illustrating a computers shortcomings in the valuation process.

........Line by line here the missed data in the 7 AVM "comparables provided.....

As illustrated above, the comparables "selected and used"in the original report were the most reasonable and most comparable "locationally, physically and functionally most similar to the subject property"as is required in Certification # 7. Clearly, the computer generated data is suspect at best, if not totally useless, and as has been illustrated by the current mortgage crisis, and many lenders recent changes in policy, should not be used in conjunction with any lending decision without properly reconciling the "Confidence" placed on the computer generated data and the actual percentage of error inherent in any database that does not properly account for the numerous factors that effect value. Factors that an appraiser and the typical purchaser would take into account. The above illustrates this fact as well as it can be illustrated in a brief synopsis of the data provided and analyzed.

By George I think you have it

 

[Webbed Feet]

The third was a full page rambling of an angry homeowner who did not get the value he wanted. The AMC was very clear in telling me to address each of the borrowers concerns.

<..... snip.....>

Is this a negative jab at the lender or an unfortunate truth backed up by concrete evidence? Should I hold my ground or remove the statement?

Mr. Barnes,

My response to the AMC would have first been to quote them an additional fee for reviewing, researching, analyzing, and reporting on a AVM result that was not part of my original engagement contract to do. Plus my additional fee for "addressing each of the borrowers concerns," as again doing that was not in my original engagement or fee quote.

If after they agreed to my fees, and I found what you found, then I would not have used the word fraud. As I believe you did all that work for free, I can understand your anger. The mistake our entire industry is allowing is believing and accepting that results form sources other than our own work is cause for us to have to defend our work for free by doing what you just did. Unless there is an error in MY work I will not review outside data for free any longer. If AMC were starting out sending us these AVM results before ordering an appraisal, and asking us to verify the data in them, would we do so for free? Why are we doing it for free just because we have done an appraisal first?

Webbed.

 

[Drew Barnes (Illinois)]

Not for free yet... I sent a detailed bill (attached to the report) for $1236.77. As of now it has been 4 hours since the first contact and they have not made a single comment about the invoice.

As far as calling them back to negotiate a fee...NO...they asked for a detailed response to a page full of questions...this work cannot be quoted, it's time & expenses...not my fault they didn't check my fees before they ordered the response.

 

[Webbed Feet]

Mr. Barnes,

Much of my post was for other people, not just you. Hey, way to go! You're right. Such a request should be per hour and materials only! The devil is in getting paid. We are contract labor. It would have been wise to insist on a written contract about that if you were not going to insist on payment in advance.

Webbed.

P.S. Our industry needs to seriously put the brakes on a lot of this by limiting any amount of after the fact work requests in the original engagement agreements in the first place. If these *******s understood and had already agreed they were going to have to pay for this stuff of demanding research of invalid sales data, unreasonable extra comps, on and on, they'd knock this crap off. Such as it's the lender's job to respond to their borrowers, not ours. If they want us responding to unreasonable or misinformed borrowers they should expect to have to pay for the services.