I'm sure that most appraisers, if they've been in business for a year or more, have run into a case where a deadbeat client refuses to pay for services rendered if the appraised value is not sufficient for them to make their loan. Talmon Murphy, Jr. of SouthLand Appraisal Services, Inc. DID . . and here's his story!
I just wanted to pass this on to everyone here. I had an appraisal that I did several months ago. The home was WAY overvalued by the homeowner and we came in much lower then they estimated. The president of the mortgage company informed us last week, by fax, that our appraisal was "unacceptable" due to the value being lower than the "other 2 appraisals" he had done.
When I spoke to him on Monday, he was rude, so I informed him that I did expect to be paid for all the work we did, plus my extra collection time and court cost if I had to take him to court. He in turn threatened that he if I pursued legal action he would turn me in to the Alabama Appraiser's Board. I told him that I welcomed that, since I know the board loves to see it when appraisers don't cave in to lender pressure! He was very insistent that he would not pay, so I put together the letter below and sent it to him by fax and email.
This afternoon, I got a call from his attorney, informing me that if I would stop my collection attempts he would overnight a check to me! He also emailed me the same promise, so I now have that in my workfile.
Bam, take that you crooks!
Some might say that if we knew it might come in low, we should have stopped. I say that by us sticking closely to USPAP guidelines, and completing the appraisal correctly and honestly, we gave the homeowner the perfect opportunity to save their credit and not get "upside down" in their loan. This is something that others who are willing to do "Comp Checks" or stop if the value appears to be low need to consider. If we make it easy for the lender to move on to the next appraiser to get the value they want, then we have become a BIG part of the problem! The fact that their broker proceeded to get an appraisal high enough to do their loan is the fault of the broker, and shows no real concern or interest in the overall well being of their client! They are the ones who did wrong, not I, as the appraiser!
My letter follows . . . click below!
January 8, 2007
Mr. President of Loan Shark Crook Inc.
South Carolina, USA
RE: Unpaid Invoice for Subject Property
Mr. Crook
I won't be bothering you anymore with phone calls about the unpaid invoice for the appraisal I completed on the property located at "Subject Property". My subsequent efforts will be directed toward composing letters and emails to the various regulatory agencies involved, i.e. South Carolina Attorney General's Office, Banking Commission, Better Business Bureau, etc.
As per your company's request, along with a signed letter dated 04/16/2006, from Mr. Loan Officer, guaranteeing payment, we appraised the above addressed property, in good faith, and to the best of our ability based on the information available to us. (see attached letter)
Per your letter on 01/05/2007 and my subsequent phone conversation with you today (01/08/2007) you dispute owing our appraisal fee, based on 2 appraisals completed after mine. I was not notified of a value dispute, nor was our office notified of any resulting appraisals which we would have needed to know about if our appraisal were being contested, in order to have the opportunity to review and rebut said appraisals if need be.
Our office is not responsible for appraisals completed by other appraisers, however, based on my follow up review of market data, the appraised values of $202,000 and $220,000 seem to be stretching to make value or hit numbers especially since your original request sheet faxed to us noted "Need $220,000 Value", and one of your appraisals came in at exactly that amount. As you were notified in our subsequent correspondence, we do not accept assignments based on a predetermined value, therefore, Mr. Loan Officer was notified of this, and he forwarded to us a letter stating that your company would be responsible for payment whether this loan closed or not.
Mr. Crook, our office is known for doing honest, and ethical appraisals, and from time to time, we have to deal with predatory lenders who think our appraisals are unacceptable based on the value not being high enough to complete your loan deal. That is not how appraising nor lending works! You have not provided, at my request, information to substantiate an unacceptable appraisal, on my part. This would include things such as, omitted pertinent subject or market data, inconsistent or incorrect data and analysis,or practices which did not meet USPAP guidelines.
It is unethical and illegal for you or I to do business in a way that is misleading to our clients. Since you have provided information indicating you have received 2 additional appraisals, this would lead me to believe that the one valued at $202,000 also didn't meet your needs so you requested a third appraisal and got your requested number of $220,000.
Mr. Crook, the Alabama Real Estate Appraisers Board frowns on appraisers who intentionally defraud borrowers by overvaluing their property, and putting them in jeopardy of foreclosure down the road! I request a copy of those appraisals to review, and forward to the Alabama Appraisers Board if it appears that collusion to defraud, or incompetent appraising has occurred. The Federal Government also frowns on Predatory Lending, which involves Brokers and Loan Officers knowingly procuring several appraisals to get the value they need to do a loan, which is apparently what your company has done!
There appears to be at the very least, predatory lending practices, and co-mingling of funds involved here, and more probably, fraud, by misappropriation of funds; that is, collecting money from a borrower (via close of escrow) for an appraisal, and then not paying the appraiser with that money. Obviously, you did not pay for all three appraisals! Someone in your office, or company, is required to have an active Broker's License, so I will file a complaint with the Alabama Real Estate Commissioner's office, and the South Carolina Real Estate Commisioners Office, for probable co-mingling of funds, and/or fraud. The burden of proof will be on the broker, Then. second, I will file a complaint with the South Carolina State Attorney General's Office for fraud. This is easy to do, nowadays, with the Internet. Just go to http://www.scconsumer.gov/ and click on the box at the left side "Consumer Affairs", then How to File a Complaint.; You will also find attached the complaint form, which I have filled out, and am prepared to submit, pending your response to this request for resolution http://www.appraisersforum.com/deadbeat.htm
Additionally, I will file a complaint with the Alabama and South Carolina Better Business Bureau, since you do business in both states.
I completed the appraisal on 04/16/2006, almost 9 months ago, and it closed in escrow already; a check should have gone out to me, concurrent with close of escrow. Instead, your "home office, appears to be using the funds for something else.
I also plan to post your company's name and address on the appraiser's Internet "Deadbeat" list, at
All of the information in my files, including your letter to me, will be forwarded to all the agencies mentioned, including the Alabama Appraiser's Board requesting an investigation be launched into your use of 3 appraisals, along with an investigation into the appraisers who completed those other appraisals.
It will take me a couple of days to compose these letters or emails and send them out. However, I would like to give you another opportunity to take care of your unpaid invoice. If I receive a check in the mail by Thursday, January 11, 2007 via overnight express mail to my mailing address - 207 Cogswell Avenue, Pell City, AL 35125, I will discontinue my further collection efforts.
Sincerely,
Talmon Murphy, Jr.
SouthLand Appraisal Services
207 Cogswell Avenue
Pell City, AL 35125
Recent Comments