Rocket Mortgage Sued

[Mejappz]

Update: The Colorado board has revoked the license of the appraiser named in the lawsuit (see below post from a FB forum). My question to the CO board is, why not sting the AMC too? And FWIW his "business model" as referenced by the CO board reads like a coaching system.

"This was sent out by the Colorado Department of Regulatory Agencies, Division of Real Estate:
“Wednesday, January 8, 2025
DENVER, COLORADO-On January 6, 2025, the Director of the Division of Real Estate, Marcia Waters, executed a Stipulation and Final Agency Order for public censure, fines, and revocation of the license for Maksym Mykhailyna, License CR.200002225. The licensee operated as a certified residential appraiser with a principal office address of 1000 Speer Blvd Apt 1409, Denver, CO 80204-4079. In addition, the licensee operated a controlling appraiser license, License CA.200002917, with the same address.
The Colorado Board of Real Estate Appraisers (“BOREA”) directed the Division of Real Estate (the “Division”), part of the Department of Regulatory Agencies (“DORA”), to investigate response to a complaint received by the Division. After the investigation, the Division found substantial evidence of license law violations.
In part, the investigation revealed that the licensee ran an appraisal firm that improperly retained the services of unlicensed individuals located outside of the United States to complete appraisal assignments and then affixed the signatures of credentialled appraisers to the reports, often without their knowledge. This business model was not only misleading to the clients, but also to his credentialled appraisers on staff.
In a second complaint investigation, Mykhailyna, conducted substantially similar violations of license law, notably, by failing to supervise both licensed and unlicensed assistants and by submitting, and aiding and abetting the submission of appraisals that contained signatures from appraisers who did not author the appraisals.
Mykhailyna was ordered to immediately surrender the above referenced licenses and was assessed a total fine of ninety-seven thousand five hundred dollars ($97,500.00) which includes a fine and additional fee. BOREA agrees that the surrender of his licenses shall be treated as revocations under Colorado law. When asked about this matter, Director Waters indicated that “the Division of Real Estate treats all investigations with the utmost care and holds all licensees to account for violations of license law.” Director Waters also identified that federal regulatory agencies are aware of the allegations and violations uncovered by this investigation, specifically referencing a recent Press Release by the United States Department of Justice. Said Press Release can be found on the United States Department of Justice website at: [https://www.justice.gov/.../justice-department-sues...](https://www.justice.gov/.../justice-department-sues...) ”

Solidifi's business model involves collaborating with local appraisers to fix prices for their services in exchange for high volume assignments. However, when appraisers find it impossible to handle this volume, they resort to hiring runners, Uber drivers, and even individuals from other countries to complete the reports. This practice occurs on a daily basis.

 

[Non Sequitur]

The AMC hired the appraiser and it was the appraiser who decided to violate the law. Not a huge AMC fan, but they hired the appraiser and also most likely had the requirement of comply with USPAP in all of their engagement letters. The appraiser is the one who decided to mislead, etc. How were they to know that signature was affixed without the appraiser's knowledge?

The appraiser's business model doesn't work without the high volume he's being fed by the AMC. What I'm saying is AMCs should be held responsible too when they are sending out an impossible number of assignments daily or assignments in multiple states to an appraiser or appraisal firm. It's easy to say "the appraiser is signing so he/she is responsible" but why should the AMC be given a pass when an appraiser turns in multiple reports daily or multiple reports from Hawaii and Utah signed on the same day (as Fannie claims)?

 

[Sadie]

Curious, has anyone ever considered whether PAREA opens the door to licensing people outside the US?

In the Rocket case this appraiser is being sued for appraisal bias on a report he signed. What the state is alleging here is something entirely different. I wonder had he not been licensed in CO, would BOREA and DORA have had jurisdiction over him, or would they just be making a criminal referral and going after the signing appraiser instead? I ask because an appraiser in CO alleged something similar (see below), but in that case, the company owners were venture capitalists. The liability typically falls on the signing appraiser in these situations, and the company just finds another dupe to sign off.

Thread 'Hybrid Companies and USPAP'

Nov 4, 2022

Hi!

So I recently started doing work for one of these hybrid companies, mostly out of curiosity since they’ve achieved some significant VC funding.

What I’m seeing now would have been honestly considered beyond the pale 5 years ago, but no one seems to care about the rules anymore, especially with this organization.

1. I was offered a void non-compete/non-solicit which is a Class II misdemeanor in the State of Colorado as of 8/10/2022. Haven’t decided what to do yet as there is zero settled case-law. It was also insanely restrictive, lasting almost two years after termination of the...

• ilikethings
• Replies: 54
• Forum: General Appraisal Discussion

You might want to check and see how each state approves a license. In Oregon, you have to submit reports for review. PAREA only refers to training, not licensing.

 

[Non Sequitur]

You might want to check and see how each state approves a license. In Oregon, you have to submit reports for review. PAREA only refers to training, not licensing.

PAREA replaces experience, if you complete the course the state doesn’t have to review an appraisal to issue a license.

 

[Sadie]

The appraiser's business model doesn't work without the high volume he's being fed by the AMC. What I'm saying is AMCs should be held responsible too when they are sending out an impossible number of assignments daily or assignments in multiple states to an appraiser or appraisal firm. It's easy to say "the appraiser is signing so he/she is responsible" but why should the AMC be given a pass when an appraiser turns in multiple reports daily or multiple reports from Hawaii and Utah signed on the same day (as Fannie claims)?

I think you give too much credit to the AMC for having the sense to know that it is, while not impossible, highly improbable that an appraiser can adequately provide multiple USPAP complaint appraisals day after day. I imagine they pled ignorance and said they requested a USPAP complaint report and it was on the appraiser to provide that. The engagement letter protected them in this case. IMO they were a low pay AMC and the appraiser settled on this business model as a way of making living. Didn't work out too well for them.
Which brings up the ASB is open for comments for Appraisal Subcommittee Enforcement Authority Regarding the Effectiveness of State Appraiser and Appraisal Management Company Regulatory Programs. Have you provided your comments. This is our chance. Open for comments until 02/04/25

https://ASC.gov/node/266054

 

[Sadie]

PAREA replaces experience, if you complete the course the state doesn’t have to review an appraisal to issue a license.

Are you sure? PAREA was designed to replace with trainee/supervisorory appraiser model. Everything else is still the same. At least in Oregon. All states are different in how they license appraisers.

 

[Sadie]

PAREA replaces experience, if you complete the course the state doesn’t have to review an appraisal to issue a license.

Well, here you do. Its just replaces the training model. That is all its designed to do. "NOTE: Your state may accept PAREA or Practicum as an alternative to Trainee license with Trainee/Supervisory model."

 

[CGinMN]

Oregon hasn't finalized its adoption of PAREA. For most states that have, it replaces 100% of the experience requirement. Participants work on a dozen or so "sample" assignments during the program. Once they graduate, they take the test and they are licensed.

 

[shrubberyvaluation]

Oregon hasn't finalized its adoption of PAREA. For most states that have, it replaces 100% of the experience requirement. Participants work on a dozen or so "sample" assignments during the program. Once they graduate, they take the test and they are licensed.

Does the state review the sample appraisals to make sure they are USPAP compliant?

 

[CGinMN]

Its up to the state I suppose, but they're probably reviewed by the appraisal institute during the program.