The author is the owner of Acorn Appraisal Associates, a 21 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities in the greater Houston SMSA
[Editor's Note - This is Phase II of Ken's "Case Study" of real world appraisers that have been subjected to blacklisting. Part 1 in this series dealt with Lender Do Not Use Lists, and the darker version, blacklisting. In Part 2, Ken began showing real world cases of blacklisting. Part 3 is a continuation of those case studies]
In Part 2 of this series I began my list of real case examples of the dark side: Black Lists. Each of these cases presented below have been sent to me with the individual names, the names of the lenders, the names of the loan officers...they are not anonymous gripes.
I've redacted all references to the companies and the individuals, but those name remain in my files. Each of these folks have taken the time to read the first column, then taken the time to write me their story. These are busy people. That they took the time to write says a lot. I think clearly it is the tip of the iceberg.
Next week as promised I'll discuss some potential changes to the Do Not Use list procedures that would help both the lending industry and the appraisal profession work better together to serve our common goals...delivering quality appraisals to good lenders intent on doing the right thing for their customers/borrowers.
Case 9
I will give all the details and you can remove whatever names you wish. First of all.....Been appraising for about 8 years, did Real Estate before that and before that....worked as an office person in a Real Estate Office. I have a lot of knowledge.
My husband's brother was a mortgage broker. We share the same last name. He always claimed to be the greatest man in the world and would never do anything wrong....one of those....Anyway....I am not sure of all the details, but apparently he was putting loans thru XXX. He had worked with several of the people in the Corporate office (The Corp. Office is located locally here in CCC) and knew several of them.....But at some point at time they basically escorted him to the edge of town and told him to never come back again. He must have done something as I think they tried and are still trying to sue him.
At about that time, the Appraisal Office I worked at received a call from XXX wanting to know if there was any relationship between me and my brother in law. They told him "No". About a week later I heard about this and was shocked they said no, so I called them up and told them that yes, I was related to him. I did not complete appraisals on his files as it appeared to be a conflict of interest to me.
However, at that point, the Chief Appraiser of the place I worked at had our signature stamp and she could have sent me on one of his and I never would have known the difference. (We were not provided client information, I guess she thought we would steal it?) Who knows...
Click below to continue reading . . .
Anyway, they put me thru to the Chief Appraiser and I said I just wanted to clear the record that there was a relationship there. He was mad!
About a month later I receive an email where they found an appraisal for a file that was not for them, a broker must have submitted the loan to them and they had a review done on it. I appraised it for $380K and the reviewer said it was $350K. I had to write a review. Now this property was located in the same area I live in and I was on the Township board so I KNEW EVERYTHING about the property and the comps. I wrote a 21 page rebuttal detailing everything and they decided it was too much of a difference and informed me that I am now blacklisted from XXX for 3 years. The kicker is the property just sold, in a declining market for $365K. Go figure.
Now at that point, XXX was a large part of my business. I lost a lot of business. A ton of business. I had to move on to vendor managements just to keep float. On top of that, they went thru all their files and found one that I had done while I was still a limited appraiser (trainee) and sent it to the State of SSS as a complaint. They said it was a bad appraisal. Fortunately our supervising appraiser did not keep up on laws and she would just send us out to do the appraisal, type the information into Wintotal and she would determine the value and comps from there (Never seeing the property in person). But, she would still put our names on the report and our signature and then she would sign as the supervisor. So the State came back and denied the complaint and said they would have to resubmit the claim and name the Supervisor as the person they were complaining on.
Then they went thru my other XXX files that I had completed recently. They found one that they decided they wanted a review on. It was an all sports lakefront with only 2 bedrooms on a major lake. The reviewer used other 2 bedrooms on non sports lakes, literally ponds. When they sent that to me, I told them this is silly, and I was going to hire an attorney.
Kinda funny that I put hundred's of file thru them and they can only find 2 they did not like.
I just got a note yesterday that one of my purchase appraisals was put thru XXX and I was not approved and was BLACKLISTED from them.
I have done a lot of appraisals and am approved everywhere. I feel I was unfairly placed on a Bad Girl List. I have seen a lot of bad appraisals and I am not and should not be on the Bad Girl List. If they share the list with other companies, I could be out of business.
Case 10
A letter written by an appraiser to his former client
Good day –
My name is AAA.
I am writing to request that I be placed back on the list of appraisers that receive work directly from the bank. Supporting documents are attached and include my resume, license and E & O declarations page.
History (I’ll try and keep this brief!)
I am a local appraiser with 23 years experience and an SRA designation. I completed hundreds of appraisals for XXX over an approximate 6-year history and was proud to be a ‘TOP’ appraiser.
Approximately 2 years ago I received a phone call from NNN– an XXX reviewer in CCC. Mr. XXX suggested corrections to 1 appraisal report & I immediately complied. Our conversation was passionate – I believe Mr. XXX took our disagreement (about Functional Utility) personally - as he immediately placed me on an Exclusionary List. I did not receive any notification, nor was I allowed any opportunity to respond.
I learned of my "Exclusionary" placement when one of my cooperating brokers could not place an appraisal report with the bank. Thanks to CCCC, I was put back on the "approved (but) watch" list - and continue today to provide my brokers with good quality appraisals - readily approved by the bank.
I am fully familiar with XXX guidelines and I am an active AppraisalPort subscriber. I believe that XXX, their investors & customers will benefit if you could help me re-establish my ‘Get work’ relationship with the bank. Feel free to discuss the quality of my appraisal reports or my work ethic with anyone familiar with my history. Folks that come to mind could include [names of references omitted]. My old Vendor number is: xxxx.
Case 11
Blacklists are not a new phenomenon. 23 years ago when I was just a young pup in the appraisal business, the company I worked for was placed on FNMA’s blacklist. FNMA refused to accept any appraisals from the company following a review of one appraisal. This was back in the day when appraisal reports were typed by the secretary, computers were just making their debut in the appraisal industry, and comp photos were not part of the appraisal report.
One day the senior loan officer from a major S&L that provided a considerable volume of work called to say their S&L could no longer accept appraisals from the firm. It was not only from this S&L, but many banks sold their loans through FNMA and business fell flat on its face. After several phone calls my supervisor finally found out that an appraisal had been reviewed with a negative outcome. At this point FNMA wouldn’t say which report had been reviewed nor the problem with the report. We were told that FNMA does not release the reviews.
More phone calls up the chain of command at FNMA finally yielded limited results. FNMA wouldn’t discuss the issue on the phone but finally relented to mailing a copy of the review with names blacked out to protect the identity of the reviewer. Three days later the report arrived. The reviewer could not locate one of the comparable sales and stated in the review that the comparable did not exist because he could not locate the property in the public records, MLS, and no such physical address could be found.
What happened? A mere typographical error listed one of the comparables as 204 SSS., which truly does not exist, instead of the correct address which was 104 SSS. My supervisor sent a rebuttal to FNMA along with the page from the MLS showing all the details of the sale were correctly reported, a copy of the deed showing the transfer, a copy of the daily courthouse report showing the transaction, and a copy of county report sent to the state showing transfer taxes were paid The rebuttal was overnighted to FNMA. About a week later FNMA finally accepted the fact that it was simply a typographical error and removed the company name from the blacklist. The whole process took about three weeks, during which period the company lost a considerable amount of business.
Fortunately, this was not one of my reports. It was my supervisor’s report. This experience literally changed the [way] reports [are] sent out by the company and is carried forward to this day. I have incorporated it into my own practice.
With every appraisal report, we send along a copy of the MLS record if available or other independent verification of every comparable shown in the appraisal report. It has the added benefit of showing the lender and their assigns that we have nothing to hide and we are correctly reporting the facts provided to us. It gives our reports more credibility.
At the present time, showing the severe drop-off in my business, I would almost suspect that I am on one of the blacklists floating around. I can sleep at night knowing that my reports are based on sound appraisal practices and correctly indicate values and conditions of the properties appraised. I am not a number-hitter and do not play ball by changing my mind on the condition of the property. This appears to be a perfect reason for being placed on today’s blacklist.
Case 12
About 8 years ago I received an order from a mortgage broker for a newly constructed residence. The owner was a builder. Did the inspection and there was a good amount of unfinished work. Ended up making at least three trips back to the property over a 4 month period, each time the borrower telling me the work was complete. On the last visit, the work was complete so I finished the report, the loan was funded, I got paid. XXX was the lender.
About 3 years later I was notified by another mortgage broker that XXX had refused one of my reports because I was on their ‘do not use’ list. I contacted XXX and they responded that I had appraised the property noted above as complete, they had another appraiser complete a post foreclosure appraisal and he stated the construction was incomplete.
At that point I revisited the property and found that the builder had removed most of the kitchen and bath fixtures, light fixtures, nice oak interior trim, and most of the floor coverings. It appears to me that the builder/owner had stripped the property prior to giving it back to the lender. I would guess that he used these materials in another house he was building. I explained this to XXX, to no avail. As far as I know, I am still ‘blacklisted’ by them, but I now take interior pictures of every property that I am in.
Case 13
You wanted a good one. I got one.
Approximately a year ago February I received an appraisal order directly from a loan officer from XXX in SSS. I told him he is supposed to order his appraisals from YYY and not directly from the appraiser. He says he is allowed to order them directly if he wants to. I tell him I don't think so but send me a check, and okay.
It is a sale. The sales price is $166,000. I inspect the house and it is a falling down wreck, with many issues. The appraised value comes in well under the sales price, like almost $30,000. During the appraisal inspection and completion period, this L.O. calls non-stop asking when the report will be done., etc. etc. I finally send the report to 2 e-mail addresses on the order as instructed and the next day I go a YYY symposium that I was invited to at the LLL.
At the symposium, the CFO, NNN, tells everyone there that they are the premium appraisers in the state and were hand chosen for this luncheon, etc., etc. We did a Scope of Work workshop and got credits for it, and it was actually a really nice day, and it was free.
In the morning, however, they told us that never can a XXX loan officer order an appraisal without going through YYY. So I raise my hand and ask "What if they do?" (Please know that I am one of only 3 women there and I am sitting 2nd row center with no one around me or front of me.) So he says again that they can't.
So I ask the question again. We do this a few more times, and he finally says that if they do the report is useless to them and they will have to throw it away and order an appraisal through YYY. Then he gives everyone a Hotline number to call if ever anyone should pressure you, or for any reason you feel that there is a problem between you and any loan officer or person/ employee of YYY or XXX.
I go home and there is an e-mail on my computer from the loan officer for the appraisal I turned in $30,000+/- short. It tells me what a complete idiot I am and why didn't I call him and tell him there was a problem because he could have had some give me better comps. to bring the value where it needed to be, and now I have killed his deal. It went on and on.
So I called the Hotline. This was the beginning of the end for me. I went from getting most of my jobs from YYY at good fees, to not only being Black Listed but removed from the nationwide XXX approval list (so my local lenders could not use me because they could not send my reports through XXX either), and harassed by YYY auditing employees for the next approximately 9 months.
If you want the rest of this story, please let me know. It gets really good. I have a lot of people who stood up for me and fought for me, and I just happen to have appraised nnn and nnn's houses because they have houses here in SSS, so there were quite a few people who knew who I was and what I am all about when I started yelling. I am a very small, and I appear to be meek female, and I think they thought I would just roll over and learn my lesson. Unfortunately, I did learn a very hard lesson.
I also had a run in with someone from ZZZ today who wanted my to write something on my report that was not true and I actually almost started crying out of frustration. That only happens when I am really tired. After me working on the job all day, she took the job away and re-assigned it, and I end up with no money at all because I won't do what "all the other appraisers will do", as she said, and just write it on the report.
Case 14
My name is NNN and I have been a Certified Residential Appraiser in SSS for 15 Years. I have never been disciplined by the state board for any reason. I have however, been blacklisted by XXX Mortgage. My boss was told this by one of our clients - and I never had a clue.
The property included a princess suite with kitchen over the garage and an in-law suite in the basement. If memory serves me correctly, I had one comp with an in-law suite as there were no others in the County.
They requested another comp with an in-law suite and I told them I could not give them something that did not exist. My appraisal was field reviewed, with a drive-by and my value was lowered by quite a bit. Never heard from XXX again.
When informed that I was blacklisted, my boss (NNN) called and tried to find out why. He was never given an answer or a reason. I was never given the opportunity to defend my appraisal or reasons for any of my adjustments.
Here's the kicker. XXX holds the mortgage on my home. I responded to one of their refinance mailings, but told them that I was on their black list and could not refinance until we could work something out. They told me they would call me back last Friday - I have yet to hear anything.
Case 15
I received the following e-mail from a large national lender:
"Please be advised that due to your current status with one or more of our business partners, investors and/or mortgage insurers, we have rescinded your eligible status with XXXX Bank. Going forward, we cannot accept appraisals performed by you as the primary or supervisory appraiser."
I contacted the review department and was not given any further explanation. I did not give up and finally got thru to the President's secretary. Later that day I was contacted by the Head Review Appraiser and was told that they were using a new "Fraud Prevention Software" and that I turned up on 6 lender's do not use list and that I was on 2 other lender's "watch list".
He could not tell me the name of the lender's or the name of the software. Needlessly to say I was really taken back. I have been a Real Estate Broker for over 20 years and an appraiser for 8 years. I take pride in the fact that I have never been reprimanded by any state or federal agency in my career. (The only problem I have ever had was last year with XXX and I was removed from their approved list when I appraised a property under the sales price, with adequate support, would not change my value and the Real Estate Agent complained to the lender. (I am still working on a resolution to this matter to no avail.) I strive to provide a professional, honest, USPAP compliant appraisal. I take my ethics and my profession very seriously.
I apologize for the length of the post but I feel this is a very serious problem that could affect many appraisers who have been appraising for any length of time. Thanks in advance for your comments
Does this seem unfair? Does this seem Un-American? Does this remind you of the McCarthy Era of the early 1950's? It should, because it is all those things.
It is also not in the best interests of good lender and good appraisers. Next week we'll offer some suggestions that might improve the situation.
Click here to send me your valid, first person, Black List examples!
The author is the owner of Acorn Appraisal Associates, a 21 year old firm offering a wide range of quality appraisal services to the Financial and Business Communities in the greater Houston SMSA
Recent Comments