22nd May 2012

Judge to hear payment claims against SD appraisal firm

posted in Appraisal Management Companies, Appraiser News |

More than 20 Arizona appraisers have filed complaints that accuse a San Diego company of failing to pay them in a timely fashion for finished work, public records show.

The claims against AppraiserLoft, which shuttered without warning last fall, will be heard at 8 a.m. on May 17 by an administrative law judge in Phoenix. Before it wound down in October, the company helped lenders assign and manage appraisal orders in San Diego County and throughout the nation.

The Arizona claims allege that AppraiserLoft failed to pay appraisers for their work within the required 45 days set by the state.

If the company is found to have violated Arizona’s rules of timely payment, then the company could be fined up to $15,000 for each violation, state law says. The company’s license could also be revoked.

No one from AppraiserLoft has filed a response to the complaint. Phone calls to company CEO and founder Aman Makkar and his wife, Harpreet Makkar, majority owner of the company, were not returned.

This is not the first time appraisers contracted by AppraiserLoft have publicly alleged late payment, or in many cases, no payment at all.

However, the Arizona cases are possibly the first against the company to reach a formal hearing. Regulation of companies like AppraiserLoft, called appraisal management companies, vary by state.

In California, the appraisal board has no authority on late or non-payment to appraisers because it’s “essentially a civil matter between an appraiser and an AMC (appraisal-management company,)” said Bob Clark, the recently retired director of the Office of Real Estate Appraisers in California, when the AppraiserLoft matter first surfaced.

Many appraisers throughout the country have told the U-T they either abandoned attempts to seek payments or have unsuccessfully appealed to the lenders in the transactions for compensation.

The Arizona complaints were first filed to the Arizona Board of Appraisal, which regulates appraisers and appraisal management companies. They were then bundled into one and referred to a state agency that hears cases related to regulation.

An administrative law judge will review testimony and evidence at next week’s hearing and make a recommendation to the appraisal board.

Aman Makkar, in his only interview with the U-T, said the company shut down operations because of a slow economy and lack of demand for appraisals. He said he was sure correspondence was sent out to appraisers but was unable to provide such correspondence to the U-T.

He resurfaced in March as the technical adviser of local start-up Carzy, which developed a website that lets you search new and used cars. The company was founded by another former AppraiserLoft exec, Scott Stokas.

The last two paragraphs were clarified by the reporter on May 14, 2012:

Carzy had moved into EvoNexus, a free incubator space downtown for start-ups started by tech trade group CommNexus in mid-March. A representative from EvoNexus told the U-T on May 14 that Carzy is now no longer part of the incubator “nor are they residing or working in the space.” It’s unclear when the company vacated the incubator.

Carzy will be among 40-or-so companies slated to appear at a local job fair hosted at UC San Diego on May 24.

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