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Why I Hate Mortgage Companies

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Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Another Fax sitting in the machine. "Do a comp check first and if it does not appraise contact us and the borrower will send you a check."

Reply, Dear Great American Lending. "I charge $350 for an appraisal. I charge $350 for a comp check. I cannot tell whether a property will appraise until I reconcile all indications of value, at which time all the work has, basically, been done. I expect to be fully compensated whether the property appraises for the sales price or not."

I have 1 mortgage company client - a client who is backed by Wal-Mart money and puts their money where their mouth is. I.e.- they don't want to back inflated properties.

I get my arm twisted by the Realtor desperate for help and uses one of my subs (his friend) to twist my arm. Gonna throw it back in their face Monday.

Ter
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
Terrel, I have more than one mortgage client, but I try to limit it to no more than a couple of regular ones. I get these things from out of towners from time to time. I like your response, but my response is slightly different. I call them back and explain USPAP to them. Then I give them a brief overview of the market here, with mutiple statements that I am not passing judgement on the value of their property until after an appraisal is completed. Then I offer to do a reasonably priced comp check based on drive-by or MLS info (again with the appropriate explanations to make it USPAP compliant). They never buy the comp check and usually say go ahead with the appraisal.

Then, I do the important final step. I ask "How will payment be made?" If the answer is "At closing." my response is "Sorry, I can only do COD until credit has been properly established." If they want to know how to establish credit I tell them they have to have ordered at least five appraisals from me in the past and if there were no problems with unreasonable pressure on any of them I will consider doing the next one with payment at closing.

The key here, is that they wanted you to take the assignment on contingency to start with. Therefore, the only way you can actually accept the assignment is if they pay up front.

A lot of the time, if you take time to explain USPAP requirements to them they will say something like "Oh yeah, I didn't mean I wanted you to do something illegal, I just didn't want the poor schmuck borrower to waste his money." [email protected]?#? :huh: I think I'll copy your statement and save it for those unreasonable ones, though.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Do you think this is why so many mortgage companies complain about turn around times? I have very few mortgage companies I trust and simply refuse to work for unfamiliar companies without "pay at the door". If you slip up and offer credit you inevitably get burned. This may be a key reason mortgage companies want AVM's so bad, they don't get rejected by AVM's or spend countless hours searching for an appraiser who will do their work for them. Whaddya think?
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Month-by-month I sense an increasing movement that shows we Forum participants are getting a little bolder, and more creative about implimenting and sticking-to a client pre-pay or c.o.d payment policy before we engage our time and effort to diligently serve these un-known and un-met strangers from somewhere "out there" in this big land of ours. We get to re-capture a substantial amount of control in our daily working lives when we insist on such simple, fair and reasonable terms for our compensation. It is a major stress reliever. If we understand their proposed assignment, and can get acceptance from the client rep about our turn-time, delivery method, etc., then I find a closing to that call with a request for c.o.d gets more and more acceptance each time it is proposed. It is NOT too much to ask for, and yes, we must be willing to walk away from some possible orders if we get the "no" reply. C'est la vie. I hate reading postings from newer joiners of our profession when they share their laments about doing dozens and dozens of pre-comps, and submitting numerous reports only to wait forEVER for payment, and sometimes never get paid, and wonder what to do. They need to learn, practice and master the pre-pay or c.o.d. "sale" of their services, accept the lost orders that may result, and celebrate the ones that will come their way without the hassle, frustration and emptiness of getting shafted .....because someone did not like their opinion. Eventually, those trustworthy clients will rise to the surface and invoicing can follow. There is no greater propensity for one of us getting shafted than to work for the first-time client from far, far away, and produce a report with a value that does not satisfy. Such is a fact, and the sun will also rise in the east tomorrow.
 

xm39hnu

Senior Member
Joined
Jul 10, 2003
Professional Status
General Public
State
Florida
Ross (CO) said...
Month-by-month I sense an increasing movement that shows we Forum participants are getting a little bolder, and more creative about implimenting and sticking-to a client pre-pay or c.o.d payment policy before we engage our time and effort...
Well it's largely Pam Crowley's fault. Since I've started haunting this forum, I've implemented the COD policy. Had my last out-of-towner to respond, "we don't accept COD; can you send us the report via PDF?" Sure, when you can send me a valid check the same way! The LO had the borrower write us a check, and we got paid up front.

The most recent one is an Pennsylvania AMC which deals in REO's. Told the rep on the phone "COD"; he said, "We can't do COD; We'll send you a check."

Love it!!
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
I've always told mortgage brokers; that asking for a comp search is asking me to both; cut corners & work for free...it's akin to asking for the end product at the beginning of the process, or as one Forumite has put it--there's a reason the estimated value is the last blank on the form.

In the lenders defense, the borrower's (general public) are largely to blame. They tell the lender they don't want to have to pay for an appraisal if they can't get a loan...the lender then calls the appraiser and asks if they can "comp search" a property for them--if it's done once, they'll ask everytime (lender's will even use this as a bargaining tool with their potential clients--if it won't appraise...you're out nothing).

The tide turns when ethical appraisers get fed up with losing market share to short-cut artists and take action--which could come in the form of a simple phone call to the appraiser, or when ethical appraisers are forced to collect their fee at the time of the inspection (the alternative would be to perform "comp search" after "comp search" all day long for free!).

Moreover, I've read some posts in which some appraisers state they've been "black-balled" from doing work for mortgage lenders. I, however, see the proverbial glass as half full. I've refused to work with unethical agents, and lenders who'd willing risk my license to further their own cause--I'm not "black-balled," I've just chosen to service a different (better) clientele.

-Mike
 
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