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Sneaky Mortgage Company

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Senior Member
Apr 23, 2002
Professional Status
Certified General Appraiser
My daughter took a call from a mortgage company last week requesting a copy of the 442/final inspection on a appraisal we completed 2-3 months previous. The 442 was requested because the borrower want to secure a equity line of credit. My daughter did not recognize the the name of the mortgage company or the address of the property. Finally, the property was properly identified but not the mortgage company. My daughter is quickly learning the ropes and responded by saying she would check it out and get back to the caller. In checking the file, we learned that the appraisal had been completed "subject to" completion per plans & specs for a good client. We also completed the 442 on the property & assumed the loan had closed and we learned it had. Apparently, this mortgage company got a copy of the report from the borrower without a copy of the 442. We politely informed them that we would not provide a copy of the 442 but would be happy to complete an appraisal for them. Haven't heard back from them yet.

I can only conclude that had this report not been made subject to, a mortgage company unknown to me would have made a loan using this report. Obviously, the original client was unaware as well. Several questions come to mind.

1. Is this a common practice?

2. Has anyone else experienced this situation?

3. Is the appraiser liable if there are any problems with this second loan?

4. How many loans could conceiveably be made utilizing one report?

5. Will this practice be made easier with electronic signatures? I sign in blue but who knows how it is printed out. A copy would almost always be in black.

5. Is this legal?

Bobby Bucks

Elite Member
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
North Dakota
Larry I had one similar to that last summer. The assignment was for OWNER OCCUPIED new
construction on a residential property. When I inspected to the subject it lacked kitchen cabinets,
countertops, floor covering, sinks, bathtubs and the drywall was being installed while I was there.
Probably 20 K from completion. I did my usual “subject to” and listed what remained to be
completed with the usual pics. I did NOT give an "As Is" value anywhere in the report. The lender was a major bank and the order had been placed by an
AMC. I sent the report in and started getting calls from the AMC and the bank. They couldn’t
understand why I made the report subject to. The property was owned and being built by a
licensed contractor and he was very upset.......he assured them I was wrong and the property was
almost complete and he needed to close that week. Well, being the unreasonable, unbending,
obnoxious person I am, I didn’t budge an inch. I got paid for the report and forgot about it.
Well, about 3 months later I started getting separate calls from 3 different mortgage brokers
wanting 442s for this same property. Then I got a call from 4th mortgage broker wanting a 442,
rental comps and an O & I statement. Once the calls started coming they were not requests, they
were demands. No faxed request just lots of phone calls. Just for fun I called the 4th broker and
told him I could complete his request, but I would need a fee for an update and a fee for
the rental comps and O & I statement which were not ordered in the original assignment and he
went ballistic. He said that wasn’t the way things were done. I’m unsure what happened next
because I’ve developed the habit of simply ignoring these types of requests. No matter how often
they call or threaten, they will eventually stop bothering you.....you can take that to the bank. :)
Why should I waste even 2 minutes of my time trying to explain why I can’t honor their request? I
have yet to read where it is required for us to take an hour out of our day to politely explain to
someone why I can’t do something illegal that same day for free. For all I know, one of these
rascals used white out on part of the report and submitted it. I do know that the hard copy in the
Bucks file still reads “subject to” and that's all that really matters. :)

Bemis Pownall

we got a call
for an update
we didnt do the original...
original firm FIRED the appraiser who wrote this report needing an update
Fired an appraiser??In this market umh..??? Never heard of such a thing..honest appraisers dont get fired....

ya sure we'll do it....NOT!

what do these mortgage/lenders think??

all they want is the almighty signature and license #.

just say NO


Dave Brigle

Sophomore Member
Dec 1, 2002
. Is this a common practice? YES

2. Has anyone else experienced this situation? YES

3. Is the appraiser liable if there are any problems with this second loan? MAYBE

4. How many loans could conceiveably be made utilizing one report? UNLIMITED

5. Will this practice be made easier with electronic signatures? I sign in blue but who knows how it is printed out. A copy would almost always be in black. YES

5. Is this legal? MAYBE


Senior Member
Dec 31, 2002
Professional Status
Retired Appraiser
I have had this happen recently with an appraisal I did for a homeowner as the client. I always state in my report that the report is prepared for the client, for this specific purpose/transaction and may not be relied upon or used for any other reason, by any other party without the appraiser's written permission. That way, at least it shows that I am trying to limit the "shopping" of the appraisal.

Mountain Man

Elite Member
Jan 15, 2002
Professional Status
Certified General Appraiser
Rae, I have put the same type scope/disclosures in my reports, but it doesn't seem to help much. They still call and ask to have the name changed...... oh by the way, can you take that statement out? :x

I like the idea, from a past post here on the Forum, of doing short narratives for non-lender clients. With a Limited/Restricted narrative, the LO's and AMC's don't know what to do with it, or how to read it! :lol:
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