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The lender's LO is the selling Realtor

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Oregon Doug

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Jan 15, 2002
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Oregon
I don't do a lot of lender work so maybe this is more common than I'm aware of:

I just received a few appraisal requests from a LO that works (is an employee) of a bank. These are sales. The LO is a licensed Realtor, is acting as the selling agent and is originating the loans.

I guess it's legal or the bank wouldn't be allowing it. Am I the only one thinking that something's wrong with this concept? Are you all seeing this?

Oregon Doug
 

Carnivore

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Certified Residential Appraiser
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North Carolina
Oregon Doug,

There is a huge fight going on between the banking industry and the National Realtors over Banks being R.e. brokerage. ITs big and the Realtors have the largest trade organization in the US, meaning they have buckets of PAC money. Not sure if this is the same thing, but you might want to check with another realtor in this board and see if this is any form of ethics violation.

I agree with you it stinks.
 

Richard Carlsen

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Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Doug

Did you mean to say that the bank employee is a licensed real estate sales person or broker? Remember, there is no state license issued to be a Realtor. (Just being a little picky this morning)

I've run into several situations recently but not with the selling broker being the LO. I have a sales person who is a banker and a sales person who is nearly acting as LO.

I would suspect that it is legal since the brokerage activity is not sponsored by the bank but done on the employees own time.

I would also bet that there is nothing illegal about it as longs as there is full disclosure to the customer. It would take an advance degree to figure out the fiduciary responsibility for broker/ LO/bank employee.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
We have many Realtors here that are also LOs. This blows my mind! I consider it a major conflict of interest!!! It does appear to be legal though.

8O :twisted: :2gunfire:
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
The appraiser only has to be concerned with a conflict of interest when it involves himself or disclose information regarding arm's length of a transaction when it isn't arm's length.

As for the Realtor and the LO disclosing their relationship to each other and the parties, that's covered under their ethics code(s), -- if any!

I don't see it as illegal and I would do it with the proper disclosures.

NO MATTER WHAT I'VE DISCLOSED over the years, no UW has ever questioned it, so simple disclosure provides a huge amount of protection for the discloser.
 

Terrel L. Shields

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May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Is it a Realtor or a broker? or just a sales person? Doesn't the bank have a problem?

I know a similar situation locally. Small bank, dau. of the largest stockholder, gggrand dau. of the founder, works for the bank as an unlicensed appraiser (evaluator??), owns stock in the bank and was recently named to the Board of Directors.....now is that a conflict or what?
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Ter ~

'Twould be my thoughts that full disclosure would solve most of the problems, except the "evaluator" thingie. I imagine you mean appraiser when you say evaluator.

Thought these were problems bank auditors were supposed to deal with.

We just had a real bad bank and city corruption scandal in Pipestone, MN, where the bank and the local politicians were running an incestuous affair solely for their personal benefit. Guess who was loosing money ... da gov't and taxpayers.
 

Verne Hebert

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Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
Prior to USPAP, in the early 80's and 70's, very often, the appraisers in S & L's went out, valued the property and went back to the office to process the loan.
 
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