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Staff Appraisers & Conflict Of Interest Issues

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Ida S. Romo

Senior Member
Joined
Oct 13, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
The Scenario;

Let's Make A Deal Bank employs their own staff appraisers.

LMAD gives them a fab benefit package.

LMAD gives them a computer, appraisal program, company car, and other perks.

Is it possible that the staff appraiser could have conflict of interest issues when performing appraisal assignments?

What do you think? :unsure:

Ida
 

Steve Gish

Sophomore Member
Joined
Apr 28, 2003
I had this same exact discussion with a very experienced appraiser recently. He started out as a staff appraiser at a bank with 300+ branches across the country. He had the company car, laptop, etc.

He told me they would fire any appraiser caught talking to or associating with any of the loan officers from the same bank. And they DID, more than once. Their appraisers had thier own little spaces away from everyone else and were told to keep their distance from the main offices.

Guess it worked out ok, he's still an appraiser. Actually, recommend I look for such a position to start out because of the benni's and perc's.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
He told me they would fire any appraiser caught talking to or associating with any of the loan officers from the same bank. And they DID, more than once. Their appraisers had thier own little spaces away from everyone else and were told to keep their distance from the main offices.

That's how it used to be done most often. Most of the banks that had appraisers on staff also had LOs that were salaried with no commissions. No reason not to do it ligitimately under those circumstances.

Any time there's commissions on line, the pressure is there!
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I think that is a fantasy job. You have to do what the boss wants or you walk. It is not a conflict if interest when you are a known advocate of the bank. But if you are trying to say you are an independant 3rd party with no interest in the transaction that would be misleading.
 

Oregon Doug

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Oregon
Long ago and far away, I too was a staff appraiser. I became an appraisal department manager and then the Chief Appraiser.

A lot of you folks in here like to work for 1st Intergalactic Bigbank (fsb) - their corporate structure physically locates their staff appraisers in the same offices as the loan originators and under the direct supervision of the District Home Loan Center managers. Their appraisers rarely ever "miss a number" either.

I've come to the conclusion that there is no such thing an a truely ethical and unbiased staff appraiser - no matter how hard you try. If you are employed by Tinbox Bank and need that salary to feed baby, you will "fudge" a number here & there. It's human nature.

Oregon Doug

ps - don't confuse "ethical and unbiased staff appraiser" with ethical and unbiasd human being.
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
Kinda reminds you of the current fiasco in the stock market & accountants doesn't it?

Dougs example is typical of my experience, Steve's on the other hand is extremely unlikely.

-Mike
 

Leon Stewart

Member
Joined
Jan 15, 2002
Originally posted by Pamela Crowley (Florida)@May 2 2003, 11:14 AM
He told me they would fire any appraiser caught talking to or associating with any of the loan officers from the same bank. And they DID, more than once. Their appraisers had thier own little spaces away from everyone else and were told to keep their distance from the main offices.

That's how it used to be done most often. Most of the banks that had appraisers on staff also had LOs that were salaried with no commissions. No reason not to do it ligitimately under those circumstances.

Any time there's commissions on line, the pressure is there!
I think, "back in the day" when the Society existed as a separate entity most of their Appraisers started out on the Staff of Major Lenders.

leon
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
It was the exact opposite when I was a staff appraiser, for a big 7 months, at a local S&L.

I did my thing. Nobody bothered me. No pressure for values. In fact, if it was foreclosed on and you overappraised it, the president would ream you out...even if you were a fee appraiser.

But banks are different from mortgage companies as they really don't need the mortgage business to stay open. They can buy GNMA's/MBS with their deposits and if they PO the local RE brokers because the staff appraisers kill a deal, they just lower the loan rates below the mortgage companies and the applications come flooding back in.

Ben
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
You bring up an interesting point Ben. If the mortgage monies are coming from your own personal coffer, you want an honest staff appraiser. Steve's scenario works.

When it's for Let's Make a Deal Mortgage Company who doesn't service their own and only portfolios a small percentage if at all, the staff appraiser will likely have a lot more pressure and conflict of interest issues to deal with. This particular scenario, in my mind is highly suspect. Nuetral 3rd party my foot!
 

J in Florida

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I spent 5 years of my life as the FHA staff appraiser for a WHOLESALER back in the early 90's, big name company. This was back when the FHA panel effect, and lenders could have staff appraisers as well-you old schoolers know what i mean. The Branch manager and account reps thought it was a great idea--rubber stamps on FHA deals, what a great competitive advantage. The local HUD staff didnt see it the same way, they were all over my reports, but I had no problem with that, I do good work. Imagine BM and Acct Reps dismay when they realized they had an HONEST staff appraiser. When the correspondents didnt get the number they wanted, or if I dared call for required repairs, they went to the "he didnt call me back" card in spades. So, Branch manager and account reps went on the attack. Since my office was in the mortgage company office, I had access to all the closed loan files. This was great for finding comps, as many times, potential comps had their appraisals in the files in our office. I was also able to find several examples of bogus appraisals on my companies 2 biggest brokers. When I brought it to my companies attention, they told me NOT to do anything about it. I still got FHA work, but no freakin way on conventional. I had copies of literally 25+ fraudulent appraisals from the 2 biggest brokers favorite number hitter that I had found just by looking for comps. These 2 brokers volume was 70% of the offices total production, so you can see why Branch Manager and account reps caved for them. I was told by both production management and appraisal dept management NOT to do anything about the bogus appraisals i had discovered.

I protested, and asked that at least they could take this clown of the approved appraiser list, I was told "we cant"

HUH?????

Do the math. This number hitter was THE MAN for the 2 biggest lying theives EERRRRRR the 2 best clients our office had. And in spite of all the PROOF, this large national lender caved in to a cheater because they thought they would lose business from the 2 big mtg brokers. The 2 mortgage brokers I am referring to had one office only in my city, HARDLY major players. Needless to say I left that company. I wish I had done more than just that, but I had bills to pay and mouths to feed.

My opinion is that staff appraisers are a BAD idea unless there is committments and responsibility at the management level to insure the integrity of the appraisal process.

I myself am not holding my breath.
 
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