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Torturious Interference

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Thomas R. Merrill

Freshman Member
Joined
Sep 23, 2002
When I'm not kicking the dirt and climbing through thorn bushes I sell real estate as a buyer's agent. Just a part time thing but it pays well. My last client [attorney] was deeply involved with every aspect of the transaction. He showed up for every inspection. When the appraiser showed up the attorney asked him "who do you work for?" an agency test question. The appraiser said "I work for myself". The buyer/attorney asked who is your client? The appraiser said "the mortgage broker". Then he asked him about [USPAP Section 5] who specifically was going to review the purchase money contract. The appraiser said" I don't pay much attention to the contract because we usually only get the front page". This statement volunteered from the appraiser..."I don't think there will be a problem hitting that sale price". My client grinned and thanked him for his answering the questions "so clearly". He then took out a digital recorder and stated that I was present [witness], the date, and the time. He looked at the appraiser and said "I keep records of everything I do" [showing him a recorder]. "You don't mind do you"? The appraiser responded I use a recorder all the time myself." "In Texas only one person has to be aware the conversation is being recorded" the appraiser said. My client agreed and walked towards his car. The appraiser went into the front door to inspect the interior of the property. The report came in at exactly the sales price. [$ 178,228.00] The house is worth $165,000 max.

Obviously this appraiser may have future trouble. The reason being is that we offered more than the property was worth [$15-20k] but had a contingency/appraisal clause biasedly worded towards the attorney/buyer's benefit. I am the buyer's agent and do what I'm told within the parameters legally set for my role by the state. I do not write in clauses either. One thing [as an appraiser] I won't do is accept the front page only of a purchase money contract from any lender/client if they decide to furnish a copy of the purchase money contract. I require all or none of the contract.

This appraiser basically implyed he was in collusion with the mortgage broker and seller to defraud the buyer [actions determine your liability]. The offer is excessively high for this neighborhood based on sales turned up in typical research where age, GLA,room count, pool, garage are all filtered in a tract neighborhood search, two of which were very similar [both renovated by the sme contractor] to the subject and on the same street. His stated intent to hit the sales price before he inspected the subject property gives an arguable impression thats his sole intent.

I asked the buyer/attorney what his intent was regarding this transaction. I will have that report reviewed by a appraiser as well as have the house appraised by a different independent fee appraiser from a different firm. Both will the highest credibility designations. I can't use you unfortunately for this assignment. [ I have apprasied several properties for his firm in the past.] We will close as required by the contract and after that I will litigate both them for torturious interference.

I asked him about reconsideration of value requests. He said its a similar scenario. If the buyer is kept out of the loop and the value is raised the buyer's position is harmed. I could argue that point very well. That statement "I could argue" is lawyerese I guess because he says that all the time.

CYA guys,

thommerrill
 

J in Florida

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Good, I hope your buyer/attorney goes apeshirt on this guy, but don't forget to go rumbling around the mortgage brokers office, too. We all know that is where all this shirt starts. Please keep us updated.
 

Thomas R. Merrill

Freshman Member
Joined
Sep 23, 2002
Originally posted by J in Florida@Jun 15 2003, 12:15 AM
Good, I hope your buyer/attorney goes apeshirt on this guy, but don't forget to go rumbling around the mortgage brokers office, too. We all know that is where all this shirt starts. Please keep us updated.
Apparently [as of this morning] the mortgage broker has agreed to settle his majority part of the fraud and the appraiser's boss is playing dumb. This guy has a basic trainee license since 1992. I don't know how long you can keep a basic license [6 months] but his "Supervisory Appraiser" apparently just signed the report on the left as well "to help things along". Another interesting item now going to the hands of the licensing bureau. As far as i know the "Supervisory Appraiser" never set foot on the property. So how does he do that...legally that is?

thommerrill
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Opps, he stepped into a shark tank. :blink: Like a cat playing with a mouse. :)

Maybe, just maybe, if he gets to keep his long held trainee license....... he'll learn the rules of the game before going back onto the field.

Keep us updated, this is very interesting.
 

J in Florida

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Florida
oohhh this is GOOD! If the supervisory appraiser signs off on the appraisal he assumes FULL responsibility for the report whether he/she inspected the subject or not. If the appraisal is bogus they BOTH go down. I hope both these losers get their licenses yanked and every mortgage guy in that city is made aware of it.
 

Thomas R. Merrill

Freshman Member
Joined
Sep 23, 2002
Originally posted by J in Florida@Jun 15 2003, 01:13 AM
oohhh this is GOOD! If the supervisory appraiser signs off on the appraisal he assumes FULL responsibility for the report whether he/she inspected the subject or not. If the appraisal is bogus they BOTH go down. I hope both these losers get their licenses yanked and every mortgage guy in that city is made aware of it.
I doubt any of the mtg guys here will care unless they think they will get caught. They will miss this particular hit the number appraisal outfit but there's another standing in line to take its place. Until the state stops sending these crooks to school and a giving a nuisance fine this will never change. Why would they? They get a canstant supply of assignments, get paid right on time because they hit the number, and when the state steps in and says you have to take continuing education as a punishment... well you have to take 28hrs every two years anyway; wheres the punishment. As far as fines go; $1000 fine everytime you get caught [if you get caught] is less than advertising money. Of course you don't have to advertise if your rep is by word of mouth among the mtg brokers.

Its my understanding that lying in an appraisal report is the same as lying in a deposition. I call that perjury, deceptive trade practice, fraud, whatever fits in your state. I have asked the TALCB about this any got the following response:

Read the enforcement actions on the web site. Wouldn't hurt to read
the advisories from the investigators, too.

Usually, fine, education, suspension. One option we have never used
is to make them re-take the qualifying exam, but we are going to
start.

When I asked if USPAP was the law or a guideline; I was told "its the law".

I ask if its the law then where's the arrest, trail, verdict, and jail time. You will never stop this hit the number behavior with fines,education, and suspension or taking an exam over.

thommerrill
 

Phil Rice

Member
Joined
Apr 22, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
The appraisal is done to protect the lender, not the buyer. The lender could be in a position to sue, but not the buyer.

I know only too well that anyone can sue for just about anything. Winning is another story. Your client, the lawyer, is trying to "game" the system, and win thru intimidation, and it will prolly work.

I am not trying to defend the appraiser or his supervisor, but I do think the lawyer is worse.
 

liznindy

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Indiana
"The appraiser came in at sale price." Have you reviewed the report? If not, how can you say the report was fraudulent.

It appears the attorney is trying to conduct a "sting" or is he trying to find someone to sue. Why would he, the attorney, offer more than he thought the subject was worth in the first place? If only, to find someone to sue if the transaction went through?!

Did you perform an appraisal on the subject? (You had better have a work file as you stated the property is worth $165000 max on a public forum).

And if you did perform an appraisal, did you disclose your bias and involvement in the sales tranaction?

I am not saying the appraiser is not incorrectly performing his duties....just wondering if the actions of the "injured" parties are any better.
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
In theory, couldn't he sue you also?? I mean, you did assist him in negotiation the sales price that he had to pay, which you have admitted was above the market value of the house. You knew the risks of possibly finding a number hitter who made the deal happen, and that means your appraisal clause is a no go......

Did you do your "due diligence" as an agent for the buyer by advising him to offer more than the property is worth?? I don't think so......
 

Thomas R. Merrill

Freshman Member
Joined
Sep 23, 2002
According to the attorney "this appraiser ingnored these closed sales and went 18 blocks away to a competing neighborhood and made no adhustments for , age, lot size, quality of construction". He was basically quoting the Review Appraisers [MAI] ,who inspected the property, comments. If it wasn't fraudlent then why did the appraiser ignore comps that required no adjustment with a value range of $4500 low to high? Your basic cookie cutter.

I did a CMA using the three most recent sales including two on the same street that were less than sixty days old and one two blocks away that was 32 days old. All were made by the same builder, had same room count, etc. Basic no-brainer when selecting comps unless you're trying to hit a number.

I have a work file as required by state law and USPAP. I do CMAs on all proposed offers whe acting as a Buyer Broker as required by law.

The attorney offered more to tie up the seller in negotiations but with an appraisal clause [very similar to FHA/VA clause]. The appraisal clause was on a continuation page. The appraiser also didn't request a full copy of the contract but gave full credence to the first page. Thats not due diligence. Read USPAP 5.

This attorney doesn't have to do stings to make money. He's absolutley brillant in the law arena. He has all the business he can handle.

thom
 
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