What does it Mean to Protect the Public Trust

[Mejappz]

Remember the (unnamed) bank who decided to send batches of appraisals to the state appraisal boards alleging "possible USPAP violations", and use the results of those free investigations to force repurchases of nonperforming loans? It seems that strategy has been recently resurrected by the GSE's with their frivolous, automated complaints to the state boards as well.

You can make the case that most appraisal's going to the GSEs have a USPAP infraction in one form or another. I have seen about 50 URARs in the past year, and all had a USPAP infraction. Last month I was handed an appraisal by the listing agent, and I counted about eight different USPAP violations; the findings are linked below. But the sales price target was hit, and the user was satisfied, so I guess that makes it OK. What a joke.

Supreme Lending Dallas

I have been hearing about them for years and just drove by their office on the Tollway . Does anyone know who they use to order appraisals?

appraisersforum.com

 

[Dublin ohio]

Where? Never seen it.

Just about everywhere. I could see you not running into it since you don't do gse work and you are in very low density areas. But it was pretty common in my area back in the day. Hit the number and you get all of my work. Get paid out of closing. But some don't close and you don't get paid. But you are guaranteed more work so it all balances out in the end. Just about every MB knew who the "go to" appraisers were. They also knew they did crap work. But as long as the deal closed.......

 

[Mejappz]

Just about everywhere. I could see you not running into it since you don't do gse work and you are in very low density areas. But it was pretty common in my area back in the day. Hit the number and you get all of my work. Get paid out of closing. But some don't close and you don't get paid. But you are guaranteed more work so it all balances out in the end. Just about every MB knew who the "go to" appraisers were. They also knew they did crap work. But as long as the deal closed.......

This practice is still prevalent today, albeit in a slightly different way. The AMC will assign you most of their orders if you agree to lower your fee, while they pocket 60% of the profit, and you hit the target value more often than not.

 

[Dublin ohio]

This practice is still prevalent today, albeit in a slightly different way. The AMC will assign you most of their orders if you agree to lower your fee, while they pocket 60% of the profit, and you hit the target value more often than not.

Forgot about that. Since I eliminated all of those "clients" years ago

 

[George Hatch]

The direct lenders will take their business elsewhere if they don't like your work, too. That's always been the case. But that's not as blatant as pitching it directly "if you can hit this value you can have the assignment". Or stiffing you altogether if a deal doesn't close.

And obviously, "always" and "never" don't exist as such in any of these scenarios. So the exception doesn't do anything but prove the rule.

 

[djd09]

coester 'we are not in the business of killing deals'...flipflopfish

 

[djd09]

When I started teaching in 1996 there were a whole lot of course participants who took it personally when I was showing them in USPAP where it says that contingent engagement and contingent compensation were prohibited. Not to mention the pushback I got over the problems with the garden variety comp checks of the day.

By that point some appraisers knew, some didn't and thought I was making it up. Same as I get now every time I show someone here something they don't want to "see".

taf is useless...USPAP is corrupt

 

[djd09]

where is DW...busy promoting public trust by waiving another appraisal

 

[Terrel L. Shields]

Just about everywhere.

Well, I don't mean I have never had someone pressure for value. But to say it is all lenders...not true. Never was. The fact bankers can no longer order an appraisal direct hardly means that all lenders ordered appraisers to make the deal work. Sometimes in community banks they are crossing their fingers and hoping your report gives them a reason to turn down the loan. Again, community banks and real loan officers (as opposed to loan originators and brokers) have real skin in the game. They are not selling these loans. They are lending the depositors money.

And if too many loans go south, then those LOs are very likely to be fired. I can think of one Senior LO who was fired with a million dollar loan failed. I know another who made a risky loan at the behest of the bank owner and that borrower injured his back. He then lost the contract to produce eggs. To salvage the loan the bank owner made the LO make a loan larger than the appraised value and put the guy back in business. He failed. The loan brought the regulators in at this point and that LO had to pay a fine and was banned for life from banking. Meanwhile the bank owner died, his heirs had to borrow from another bank to keep afloat and then was forced by the FDIC to sell to a group put together just to buy the bank...which as part of the deal none of the family members nor board could serve on the new owners board even though they still held substantial stake in the bank.

Banks and Mortgage brokers are not party to the same motivations.

 

[chad hampton]

As long as mtg professionals are paid on commission, there will be pressure. It's worse today, but it's just hidden. Which as long as something is hidden, it's USPAP approved.