Appraiser Income

In JPMorgan Case, a Missed Opportunity to Charge Its Executives
By JESSE EISINGER, ProPublica

Both the Securities and Exchange Commission and JPMorgan Chase won great public relations victories last week. But the public lost — and in ways that go far beyond this one spat.

By cracking down on the bank for its faulty internal controls in the $6 billion London Whale trading loss, the S.E.C. can claim to be the ferocious regulator we have all been waiting for. JPMorgan and its chief executive, Jamie Dimon, got the best coverage they could have hoped for under the circumstances: the sense that the bank is beleaguered, surrounded by regulators, but at least it could put the trading loss behind it.

Yes, the S.E.C. wrung an admission of wrongdoing out of the bank, and the regulators scored a large settlement. It’s an improvement for a regulator to display the ferocity of a mealworm, rather than a banana slug, but let’s hold the celebrations until it reaches at least the level of a garter snake.
After all, Mr. Dimon had already made a great display of admitting that he and the bank’s senior ranks had messed up — well, at least as soon as it was clear that bluster wasn’t getting them anywhere.

The admission was nice, but the S.E.C. did not charge any top executives with misleading disclosure. Why not? …continue reading the rest of this post: JP Morgan Execs Stay Out of Jail But Settlement Talks of $13 Billion

Fannie Mae Overpaid Servicers by $89 Million
Reposted from Appraiser News Online

Fannie Mae overpaid servicers by about $89 million in 2012 due to errors made by a third-party vendor incorrectly processing servicer reimbursement claims, National Mortgage News reported Sept. 18.

The Office of the Inspector General for the Federal Housing Finance Agency reported the problem, noting that Fannie not only overpaid servicers but also incorrectly denied $27 million in reimbursements last year.

However, the FHFA conducted its own review of the issue and claimed that the errors were “substantially less” than what the IG’s report suggested, although the agency failed to report the amount they said was overpaid, National Mortgage News reported.

The FHFA contracted with third-party vendor, Accenture, to review the reimbursement claims by servicers and then decide whether or not to pay, curtail or deny those claims. The IG’s report indicated that Accenture reviewed about 1.3 million claims last year and approved $2.9 billion worth of reimbursements.

Before 2011, Fannie conducted its own reimbursement reviews; now 80 percent undergo manual review by Accenture.

The IG’s report indicated that errors largely were due to inconsistent application of guidelines, incomplete reviews or large volumes of claims.

“Although these overpayments may not equate directly to financial harm against Fannie Mae, they represent a fundamental problem that undermines the reliability and integrity of Fannie Mae’s servicer reimbursement operations,” the IG report concluded, National Mortgage News reported.

The report suggested that Fannie minimize processing errors by creating a red flag system, and it also advised the firm to quantify and aggregate overpayments and to determine the root cause of those overpayments. The IG also said the firm should then publish the results.

The FHFA said it would implement most of the IG’s recommendations but noted that it would not publish the results of a review of overpayments.

Refinancings were down slightly in the second quarter, as borrowers shied away from rising interest rates, the Federal Housing Finance Agency reported Sept. 3.

Fannie Mae and Freddie Mac had 279,933 mortgages refinanced through the Home Affordable Refinance Program in the second quarter of 2013; 294,300 mortgages were refinanced during the first quarter.

With mortgage interest rates rising sharply in June to 4.07 percent, compared to 3.57 percent in March, refinancings became less attractive to borrowers. HARP has resulted in 2.65 million refinancings since the program’s inception in April 2009.

Of the HARP refinancings in the second quarter, 19 percent had loan-to-value ratios of more than 125 percent. Figures through June showed that 18 percent of HARP refinances for underwater borrowers were shorter-term, 15- to 20-year mortgages, which build equity faster than 30-year mortgages.

HARP continued to account for a substantial portion of total refinance volume in certain states. Through the second quarter, HARP refinances represented 59 percent of total refinances in Nevada and 50 percent of total refinances in Florida, more than double the 21 percent of total refinances nationwide over the same period.

Underwater borrowers accounted for a large portion of HARP refinances in several states, representing more than 61 percent of HARP volume in Arizona, Nevada and Florida.

See the FHFA’s second quarter report.

Reposted from Appraiser News Online

Hope everything is going well out in appraisal land! I know for me my AMC work has steadily declined over the past few months.

What about you?

Since work has been so great and plentiful over the past couple years I rarely found the time to update my profiles on numerous AMC websites so when a few of my top vendors started hiring in house appraisers, my AMC volume went from 40 requests a week down to about 10.

Now I am lucky if I can accept 2 orders a week from the AMCs. Luckily I have a fair amount of non-lender work due to some recent advertising campaigns, but I still count on a fair amount of AMC work to make ends meet.

What are other appraisers seeing out there with AMC work? How many orders do you do a week now compared to 3 months ago?

I would really appreciate your feedback, please leave a comment below.

BTW – I have started updating all my profiles with the other 250 AMCs I have registered with in the past. I will keep everyone that posts a comment below updated on how that goes.

Bryan
http://www.appraiserincome.com

William K. Black – Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle

I have done a series of articles about the efforts of honest appraisers (which began in 2000) and loan brokers to alert the lenders, the markets, and the government to the twin fraud epidemics (appraisals and “liar’s” loans) committed by lenders’ controlling officers that drove the financial crisis.

Honest appraisers could have profited greatly by becoming dishonest appraisers who would be given the lucrative assignments by fraudulent lenders’ controlling officers and their agents. Instead, honest appraisers suffered serious losses of income because they refused to succumb to the extortion efforts of the fraudulent lenders and their agents. A national survey of appraisers in early 2004 found that 75 percent of them reported that they were the subject of attempted coercion designed to inflate the appraisal during the past 12 months. A follow-up study in 2007 found that percentage rose to 90 percent and that 67 percent of appraisers reported losing a client and 45 percent did not get paid their fee because they refused to inflate the appraisal during the past 12 months. Many honest appraisers were driven out of the profession by the blacklists the fraudulent lenders’ controlling officers and their loan brokers used to deny business to honest appraisers.

…continue reading the rest of this post: Why Are Appraisers Furious at Fraud by Their Peers While Corporate Lawyers Are Complacent?

Running $$$ Total as of 05/14/2013
$9,349,612.97 (per Bankruptcy Records)

If you are owed money, please visit this website. Great information.

http://www.esappraisalscam.com/default.html

My prior posts about this problem:
http://appraiserincome.com/2012/12/20/evaluation-solutions-es-appraisal-services-is-ceasing-operations-another-appraisersloft-amc-story/

http://appraiserincome.com/2012/12/21/evaluation-solutions-es-appraisal-services-goes-morally-and-financially-bancrupt/

http://appraiserincome.com/2012/02/14/es-appraisal-services-evalonline-com-not-paying-appraisers/

Dianna Stieri the prior owner of US Appraisal Group sets the record straight.

After posting that a possible bankruptcy was looming for US Appraisal Group, I received calls from the prior owner and their Legal team in regards to my post. Dianna has advised that there is pending litigation in regards to the information that has been sent out.

She also stated that Appraisers have been contacted due to a billing dispute between a couple clients with US Appraisal Group and that appraisers were being requested to negotiate instant payment or set up a payment plan to receive payment.

She also stated most appraisers were owed between $250 – $400 each and that the total amount owed was not in the millions. (I didn’t ask a specific $).

At this time the company has been acquired by another AMC and all inquiries are being forwarded to their accounting department.

Bryan Knowlton
http://www.appraiserincome.com

Anyone having problems getting paid by LCAM or Lenders Choice Appraisal Management?

We have been notified with payment problems on open appraisals from LCAM/Lenders Choice Appraisal Management.

Before it becomes a big problem and appraisers are stiffed with millions in unpaid invoices, we thought we would reach out to other appraisers first and finally follow up with the AMC in question.

Please post your feedback below.

Bryan Knowlton
http://www.appraiserincome.com

By CHRISTINA REXRODE and STEVE ROTHWELL — The Associated Press

NEW YORK — The U.S. Justice Department is investigating JPMorgan Chase over mortgage-backed investments the bank sold in the run-up to the financial crisis.

The New York-based bank said in a regulatory filing that it is responding to investigations by the civil and criminal divisions of the U.S. Attorney’s office for the Eastern District of California. In May, the civil division informed JPMorgan that it had “preliminarily concluded” that the bank had violated federal securities laws in connection with certain mortgage-backed investments it sold from 2005 to 2007.

A JPMorgan spokeswoman declined to comment.

The disclosure is just the latest in a swirl of mortgage-related lawsuits and investigations that have hammered big U.S. banks in the aftermath of the financial crisis. The banks have been accused of improperly foreclosing on homeowners, discriminating against others and knowingly making loans to people who couldn’t afford them. Other probes, including the one disclosed by JPMorgan, have focused on mortgage-backed securities, where the banks bundled together their mortgages and sold them in slivers to investors.

JPMorgan didn’t give details on what the Justice Department is investigating. But previous lawsuits and investigations, against both JPMorgan and other big banks, have said that the banks misled investors about the quality of the loans they were buying. When the real estate bubble burst, many of the mortgage-backed securities soured and the investors who bought them lost billions.

If the investigations result in criminal or civil action by the Justice Department against JPMorgan, it would be the most high-profile government move against the bank to date. JPMorgan, which came through the financial crisis stronger than most of its competitors and was lauded for wise risk-management practices, has lately faced a slew of sanctions by federal regulators.

In January, regulators ordered the bank to take steps to correct poor risk management that led to a surprise trading loss last year of more than $6 billion. The Federal Reserve and the U.S. Comptroller of the Currency also cited JPMorgan for lapses in oversight that could allow the bank to be used for money laundering. Last month, the bank agreed to pay $410 million to settle allegations by the Federal Energy Regulatory Commission that it manipulated electricity prices in California and the Midwest.

An investigation by the Securities and Exchange Commission of the trading loss is nearing final stages with civil charges possible, according to news reports Thursday. The SEC is seeking an admission of wrongdoing from JPMorgan in a settlement, The Wall Street Journal and The New York Times reported, citing unnamed people familiar with the case.

That would be a departure from the SEC’s traditional policy of allowing most companies and individuals agreeing to settlements to neither admit nor deny wrongdoing. It would be a major application of a new policy announced recently by SEC Chairman Mary Jo White that calls for requiring admissions of wrongful conduct in some significant cases.

SEC spokesman John Nester declined comment on the reports.

The newly disclosed Justice Department investigations are not JPMorgan’s first legal headaches over mortgage-backed securities. It has settled charges from the SEC over mortgage-backed investments it made in the run-up to the financial crisis. It’s also facing lawsuits from the New York Attorney General’s Office and the National Credit Union Administration over the securities.

JPMorgan is fighting the attorney general’s lawsuit, which focused on investments sold by Bear Stearns in 2006 and 2007. JPMorgan bought Bear Stearns in 2008.

JPMorgan made the disclosure about the Justice Department investigations in a quarterly regulatory filing late Wednesday. It came a day after the U.S. government accused Bank of America of civil fraud, saying the company failed to disclose risks and misled investors in its sale of $850 million of mortgage bonds during 2008. The government says that the bank failed to tell investors that more than 70 percent of the mortgages backing the investment were written by mortgage brokers outside the banks’ network.

Bank of America has disputed those allegations, saying the investors who bought the securities had “ample access” to data about the mortgages.

“We are not responsible for the housing market collapse that caused mortgage loans to default at unprecedented rates and these securities to lose value as a result,” the bank said in a statement this week.

Shares of JPMorgan Chase & Co. slipped 47 cents, to close Thursday trading at $54.83. The stock has traded between $36.40 and $56.93 in the past 52 weeks, and remains up 25 percent since the start of the year.

AP Business Writer Marcy Gordon in Washington contributed to this report.

Illinois Cracks Down Further on AMCs
Mon, 2013-08-05 17:11 — Robert Ottone

As a result of the Dodd-Frank Act, many individual states are requiring appraisal management companies (AMCs) and their employees to register with their domicile state in order to continue operation. While not necessarily a bad thing, the costs associated with obtaining additional licensing is forcing many smaller AMCs to band together, while others are being forced out of the industry entirely.

In January 2010, AMCs didn’t require licensing of any kind. States didn’t particularly regulated AMCs, either, which, although potentially problematic, was business as usual. Fannie Mae then began issuing rules in the form of Appraiser Independence Regulations (AIR).

“Over time, through a flurry of complaints from consumers, realtors, lenders and other industry professionals; pressure was put on the states to begin regulating this market segment,” said Kevin Marconi, COO of United Fidelity Funding. “Legislation was being passed by each state to regulate these AMCs and impose annual fees and bonds to help legitimize this type of business.”

One of the latest states to begin imposing Fannie Mae’s AIR guidelines is the state of Illinois. As this is a Dodd-Frank requirement, the lenders are ultimately responsible for properly vetting all vendors, because an illegal or improper loan is their responsibility.

“The state-by-state rules have also challenged lenders who are now legally responsible for the actions of their third party vendors, including AMCs. Recently we reviewed a spread sheet that cross referenced the number of AMCs that were licensed in all states and the number was shockingly low,” said Aaron Fowler, president of United States Appraisals. The irony here is that lenders hire AMCs to be the appraisal expert, however; lenders now need to audit their AMCs.

While the number of states requiring AMCs to regulate is on the rise, this isn’t a particularly surprising move. As illustrated above, individual states are merely following rules put in place by the United States government. Appraisers remain up in arms over nebulous state laws and what their typical fines could be. With fine totals numbering in the thousands of dollars, AMCs should look to find themselves in compliance sooner rather than later.