Rob Lentz
Junior Member
- Joined
- Nov 8, 2005
- Professional Status
- Certified General Appraiser
- State
- Michigan
I recently completed an appraisal for a MB client. I live and work in a rural area where there are not that many appraisers to choose from. I'd never worked with this lender before.
The borrower was a former colleague (3 years ago we used to work in the same school district...we were 2 of over 700 employees). There were no guarantees/promises/winks/handshakes - you know what I mean.
The subject is an "on-frame" modular from pre-1976. I called it as such in the appraisal, included a mix of low end mods and manufactureds as comps (because them's the appropriate alternatives that my market dictates). Since it is not HUD, I reported the appraisal on a 1004. And then, slapped my value on it and shipped it. Did I mention that it was tenant occupied? (yes, it gets worse...someone shoot me for not being out of town that week!). Had this borrower talked to me prior, I would have advised them to talk to a local bank who might be able to work something in-house...but my client is the MB (at least for this assignment, and at the time of inspection) - not that after my best efforts to give said MB the best service I can I couldn't complete for a new client under a new assignment.
Today I get a call and the LO says UW wants clarification of mod. vs. man. issue. No problem, I can explain what it is and what it isn't (even though I think I already did). The problem isn't value, its a mix (or possibly more accurately, a mismatch) of the subject improvements, the client, and the occupancy.
I know what is likely to happen here. If UW can't place this property in a loan program, it'll get canned. Then the LO will likely blame the appraiser/appraisal. And, yes, I've already been paid COD for my services (which we all know borrowers completely "get" the whole "the lender is the client, but the borrower pays for the appraisal" line). At which time I'll get a phone call from said borrower, wondering "what gives?" Then, I'll get dagger eyes at the next little league picnic.
There is nothing in the Scope of Work that says that the appraiser's job is to know which properties will fit what secondary market guidelines, or even that we're to assume that we're judging a property's suitability for the secondary market (and then which GSE, and then which program, etc) at all. [Further, we don't appraise on contingency based fees, i.e. a loan closing=paid, no loan=no pay.] In my mind, property eligibility is the LO, and MB's area of expertise - and his/her responsibility. It's like the Home Inspection and the Appraisal...we both look at the same property, but for different reasons, objectives, etc. While I know enough to be dangerous, I never portray that the appraisal inspection is equivalent to a home inspection. Nor would I ask the home inspector to tell me what the home is worth...Catch what I'm throwing? Good.
I've only run into 1 other on-frame modular in my life, and the loan process was a piece of cake. I explained what it was, and proceeded just as above. But thinking back, its probably because the first one was a purchase transaction for primary residence. No questions, no problems.
So, if (when) I get the phone call from the borrower...is there anything unethical about recommending that they talk to a local lender of their choice (I am approved to provide services to all of them), with the caveat that I can complete the 2nd appraisal faster and cheaper than anyone else? (I'm not into gouging anyone). In my opinion, they started at the wrong lender...but I would've been out of line to say so from the git-go.
How would you proceed?
Thanks in advance for your thoughts, and taking the time to respond.
Rob Lentz
The borrower was a former colleague (3 years ago we used to work in the same school district...we were 2 of over 700 employees). There were no guarantees/promises/winks/handshakes - you know what I mean.
The subject is an "on-frame" modular from pre-1976. I called it as such in the appraisal, included a mix of low end mods and manufactureds as comps (because them's the appropriate alternatives that my market dictates). Since it is not HUD, I reported the appraisal on a 1004. And then, slapped my value on it and shipped it. Did I mention that it was tenant occupied? (yes, it gets worse...someone shoot me for not being out of town that week!). Had this borrower talked to me prior, I would have advised them to talk to a local bank who might be able to work something in-house...but my client is the MB (at least for this assignment, and at the time of inspection) - not that after my best efforts to give said MB the best service I can I couldn't complete for a new client under a new assignment.
Today I get a call and the LO says UW wants clarification of mod. vs. man. issue. No problem, I can explain what it is and what it isn't (even though I think I already did). The problem isn't value, its a mix (or possibly more accurately, a mismatch) of the subject improvements, the client, and the occupancy.
I know what is likely to happen here. If UW can't place this property in a loan program, it'll get canned. Then the LO will likely blame the appraiser/appraisal. And, yes, I've already been paid COD for my services (which we all know borrowers completely "get" the whole "the lender is the client, but the borrower pays for the appraisal" line). At which time I'll get a phone call from said borrower, wondering "what gives?" Then, I'll get dagger eyes at the next little league picnic.
There is nothing in the Scope of Work that says that the appraiser's job is to know which properties will fit what secondary market guidelines, or even that we're to assume that we're judging a property's suitability for the secondary market (and then which GSE, and then which program, etc) at all. [Further, we don't appraise on contingency based fees, i.e. a loan closing=paid, no loan=no pay.] In my mind, property eligibility is the LO, and MB's area of expertise - and his/her responsibility. It's like the Home Inspection and the Appraisal...we both look at the same property, but for different reasons, objectives, etc. While I know enough to be dangerous, I never portray that the appraisal inspection is equivalent to a home inspection. Nor would I ask the home inspector to tell me what the home is worth...Catch what I'm throwing? Good.
I've only run into 1 other on-frame modular in my life, and the loan process was a piece of cake. I explained what it was, and proceeded just as above. But thinking back, its probably because the first one was a purchase transaction for primary residence. No questions, no problems.
So, if (when) I get the phone call from the borrower...is there anything unethical about recommending that they talk to a local lender of their choice (I am approved to provide services to all of them), with the caveat that I can complete the 2nd appraisal faster and cheaper than anyone else? (I'm not into gouging anyone). In my opinion, they started at the wrong lender...but I would've been out of line to say so from the git-go.
How would you proceed?
Thanks in advance for your thoughts, and taking the time to respond.
Rob Lentz
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