29th June 2015

OREP/Working RE Upcoming Webinar Series

“I sat in on your webinar and found it truly informative.
I wanted to thank you for the service.” – Nick Honiotes, Allstate Appraisal

“Thanks for all of the tips. I found this very valuable.” – Patrick Jones

Working Well with AMCs
(Higher Fees / Fewer Headaches)

Does your typical day at the office look like this– low fees, multiple call backs, endless revision requests and stipulations and unreasonable turn times?

If so, we feel your pain and have an “appraiser aspirin” for you.

This webinar shares techniques to improve your experience working with AMCs, showing you how to earn higher fees and minimize the time-wasting, aggravating back and forth that kills your day. If you’re still struggling to create successful and lucrative relationships with AMCs, this webinar can help.

See how to negotiate from a position of strength, establish yourself as an expert to get the highest paying work, and take back control of your business!  

Part 1: Getting What You’re Worth (Working with AMCs)
You can successfully negotiate fees and terms with AMCs. Bryan Knowlton, author of the 2015 AMC Guide, shows you how to quickly locate and sign up with the best AMCs, negotiate fees and terms, get higher-paying assignments and pick and choose your work for a better quality of life.

There is no magic wand when working with AMCs but Knowlton’s valuable insights, gained from years of working with AMCs on his terms—in the very competitive San Diego market, will help you save time and effort and move toward working with only the best AMCs (and firing the rest).

Working with the best AMCs and negotiating your own fees gives you more power and more choice.

This Course Will Show You:
• How to Save Valuable Time
• Shortcuts to finding the Best AMCs
• How to Create a Fast, Efficient Application Process
• How to Follow Up to Get Results
• How to Get Paid
• How to Land Better Assignments
• How to Update Documents Efficiently
• How to Turn Review Requests in to a Win/Win
Plus: Q&A from a Successful AMC Appraiser


Bryan Knowlton
Author of the 2015 AMC Guide
Part 2: How to Work Profitably with AMCs
Working with AMCs doesn’t have to make you want to pull what’s left of your hair out. There are proven techniques for saving time, minimizing call backs, getting the choicest assignments, and commanding higher fees from someone who has sat on both sides of the desk; an independent fee appraiser and an AMC executive.

Seasoned appraiser, course developer and instructor James Baumberger, President of AMC Synergy Appraisal Services, shares his advice on how to work efficiently with AMCs, minimize or avoid the frustrating back and forth and enjoy a smoother, friendlier, more profitable AMC process.

James Baumberger
President of Synergy Appraisal Services

In this webinar, Baumberger shares the keys to successful relationship management, shows you the most common mistakes to avoid, and helps you create a streamlined process for Underwriting Conditions.

Working Well with AMCs: Two-Part Series
Part 1: July 9th, 10 – 11:15 a.m. PST
-Bryan Knowlton, Busy fee appraiser and author of the 2015 AMC Guide

Part 2: July 16th, 10 – 11:15 a.m. PST
-James Baumberger, President of Synergy Appraisal Services

Sign Up Now!
OREP Members/ WRE Subscribers: Click here for a Discount
Save with a Season Ticket: Enjoy the entire summer webinar series at your leisure (live and recorded) and save: June, July, and August Webinars for a single price!
Regular Price: $237   Season Ticket: $149

Summer Series – Buy Now
Parts 1 & 2: How to Support and Prove Your Adjustments (available now on demand)
How to Get What You’re Worth (Working with AMCs)
How to Work Profitably with AMCs
Running an Effective Appraisal Business
Efficiency through Technology: Mobile Tools and Paperless Appraising

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25th June 2015

Coester Appraisal Management Fined for not paying Customary and Reasonable Fees

Louisiana Fines Appraisal Firm for Not Paying ‘Reasonable’ Fees

JUN 5, 2015 5:16pm ET

Editor’s Note: Following this article’s publication, the Louisiana Real Estate Appraisers Board issued a new statement regarding the stipulation and order it entered into with Coester Appraisal Management Group.

The Louisiana Real Estate Appraisers Board has fined an appraisal management company $5,000 for failing to pay “customary and reasonable” fees to appraisers.

It marks the first time a state has taken action against an AMC under a provision of the Dodd-Frank Act.

Coester Appraisal Management of Rockville, Md., was ordered Thursday by the Louisiana appraisal board to use a third-party appraisal fee schedule compiled by the Southeastern Louisiana University Business Center in Hammond, La.

The company also must submit detailed quarterly activity reports to the state appraisal board for a year and forfeit all rights of appeal, said Bruce Unangst, the board’s executive director.

Coester, which has a network of roughly 3,000 appraisers in 50 states, did not admit wrongdoing. The company’s lawyer, Robert Rieger, with Adams and Reese LLP, declined to comment.

A provision of Dodd-Frank requires that mortgage lenders pay appraisers “customary and reasonable” fees.

But appraisers have long complained that AMCs take a cut of their appraisal fees, in violation of the law.

Unangst said the Louisiana board intends “to continue to move aggressively in providing a level playing field for all industry participants.”

The Dodd-Frank appraisal standards were created to address the fee compression that is said to have resulted from the Home Valuation Code of Conduct, which took effect in 2009 and barred loan officers and brokers from selecting appraisers. Many blame the HVCC — which sought to prevent commissioned sales representatives from bullying appraisers into inflating valuations — for driving business to appraisal management companies that act as middlemen. Traditionally, AMCs took a cut of the fees for the appraisals they arranged.


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19th June 2015

Habitat for Humanity seeks Dodd-Frank Customary and Reasonable relief

The regulation was aimed at boosting housing market protection by making sure mortgage companies and banks wouldn’t receive faulty financial advice from cheap appraisers.

But Habitat for Humanity — which relies on appraisers who volunteer their services for free — says it’s created a regulatory headache for their more than 1,400 U.S. affiliates who fear they’re bucking Dodd-Frank in accepting free appraisal services.

“Dodd-Frank reforms were passed with the good intentions of protecting consumers and taxpayers and of stopping predatory lending that targeted lower-income families and contributed to the foreclosure crisis,” said Christopher Ptomey, Habitat for Humanity International’s director of government relations.

“However, provisions in the law … created unintended consequences for Habitat for Humanity.”

The Consumer Financial Protection Bureau (CFPB) officials signaled to Habitat that they’re exempt from the regulation, but the group isn’t taking any chances.

Senate Banking Committee Chairman Richard Shelby (R-Ala.) included a provision in his financial overhaul bill that would exempt Habitat from the regulation. Sen. Rob Portman (R-Ohio) reintroduced legislation earlier this month aimed at addressing the same issue.

“Common sense,” was how Shelby put it. “[It’s] one of the many ways that this legislation helps consumers and rightly addresses the unintended consequences of Dodd-Frank.”

Even Sen. Sherrod Brown (D-Ohio) said the issue “merits further discussion.”

But Brown criticized Shelby for including such a provision in his overhaul, which progressives like Brown oppose for other reasons.

“It shouldn’t be included in a sweeping package of Wall Street reform rollbacks that would threaten safety, soundness and consumer protection,” Brown said. “Opening the door to risky, high-cost mortgages seems to counter Habitat’s mission.”

Habitat’s Ptomey, however, said the group “greatly appreciates Sen. Shelby’s efforts to include protection for donated appraisals.”

CFPB officials declined comment for this story but provided a 2014 letter that CFPB assistant director for regulations Kelly Thompson Cochran sent to Habitat officials.

The letter seemingly indicates that appraisers who volunteer their services are not in violation of Dodd-Frank regulations.

“When a state-licensed or certified appraiser voluntarily chooses to donate appraisal services for a consumer credit transaction and to perform an appraisal without receiving a fee,” Chochran wrote in the 2014 letter, “we do not believe the appraiser is acting [in the same intent as the regulation].”

Still, the regulatory confusion has drawn criticism from the housing industry.

“The fact that the Consumer Financial Protection Bureau has been unwilling to clarify issues such as this is troubling,” the Appraisal Institute, which represents real estate appraisers, wrote in a comment letter to Shelby and Brown on the issue.

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16th June 2015

Free Appraisal Marketing Webinar

This Free Appraiser Training Will Teach You…

-> How to make your appraisal business STAND OUT!
-> The best appraisal management companies to work with
-> How to do marketing for non-lender work
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-> Websites: How to set yours up so you can get found in the search engines
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Register Now For The Next Webinar – we’ll see you there!

Bryan Knowlton

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13th June 2015

Appraiser Shortage Could Gum Up the Works at Mortgage Lenders

Mortgage lenders are facing a potential threat to their business that has nothing to do with new regulations or the uneven economic recovery: a persistent shortage of home appraisers.

Since the height of the housing boom in 2007, the number of individuals certified or licensed to do home appraisals has declined by 23,000, or 28%, according to the Appraisal Institute.

It’s not a crisis — at least not yet — but with older appraisers retiring and fewer and fewer college graduates entering the profession, some industry observers say that, in five to 10 years, there won’t be enough appraisers to handle the volume of home sales. For lenders, that could mean higher appraisal fees and long delays in closing loans — at a time when technology could be speeding up the process.

“In five years the banking industry will not have many appraisers left to do their mortgages,” said Rick Hiton, the owner of the Chicago appraisal firm Rick Hiton & Associates.

Age is perhaps the biggest reason why the industry is facing a talent shortage; many existing appraisers are between 50 and 55 and looking to retire within the next decade. But many younger appraisers are being driven from the industry by a combination of lower pay and heavier workloads and more stringent certification requirements that took effect in January have raised the bar for becoming an appraiser, experts say.

It used to be that an appraiser could enter the profession with just an Associate’s degree, but now a Bachelor’s degree is mandatory. New appraisers must also serve at least 2,500 hours as an apprentice and starting in 2017 appraisers will be required to undergo mandatory background checks.

“Now it can take seven years before someone can do an appraisal on their own,” said Greg Schroeder, the president of Comergence, a Mission Viejo, Calif., company that vets appraisers and mortgage originators. “Regulation has created very onerous time and educational requirements for appraisers and it’s killing an industry that is already dying because of age.”

Mortgage lenders, servicers, and real estate investors rely on appraisers to justify the value of a home and the size of a home loan. Appraisals are required by law for nearly all real estate salesabove $250,000 and they must be performed by a state certified or licensed appraiser.

At this point, the appraiser shortage isn’t affecting home sales much because overall volume is low. The turnaround time on most appraisals these days is about a week — compared to 10 days during the refinancing booms of recent years — though appraisals can are taking longer in rural areas, where there are fewer appraisers.

“Appraisers are busy, some are declining the work and lenders are asking for more capacity and staff,” said Brandon Boudreau, the chief operating officer at Metro-West Appraisals, a national appraisal firm based in Detroit.

Industry experts suggest that these bottlenecks will only get worse as mortgage volume picks up and the number of appraisers continues to shrink. Schroeder estimates that as many as 30% of the roughly 61,000 nation’s certified and licensed residential appraisers are no longer in the business but just haven’t surrendered their licenses. Another 20% to 30% are “grumbling about retiring, so the actual number of working appraisers could be cut in half,” he said.

Many appraisers blame the Home Valuation Code of Conduct, which took effect in 2009, for thinning their ranks. The HVCC, which came about as a result of negotiations between then New York State Attorney General Andrew Cuomo, the Federal Housing Finance Agency, Freddie Mac and Fannie Mae, sought to prevent commissioned loan officers and mortgage brokers from bullying appraisers into inflating valuations.

Banks responded by eliminating their costly in-house appraisal departments and instead hiring third-party appraisal management companies. Because these firms get a cut of the appraisal fee, individual appraisers that may have once collected $400 to $500 per appraisal have seen their fees slashed to anywhere from $225 to $350.

“The banks saved millions of dollars a year but appraisal fees never went up,” said Bill King, a senior vice president of valuation solutions at Platinum Data Solutions, an Aliso Viejo, Calif.-based firm that provides collateral valuation technology. “No one thought through these actions.”

A provision of the Dodd-Frank Act requires that lenders pay appraisers “customary and reasonable” fees, but many states are still studying the issue. In the meantime, employers like Hiton say they need to accept work from appraisal management companies even if the fees are low because their employees need the work.

“I have to make sure in a bad month that the appraiser can earn a living and have grocery money, while the company basically does not earn anything,” said Hiton, who employs 12 appraisers.

Advances in technology could further reduce the need for appraisers, some observers say.

In January, Fannie Mae released Collateral Underwriter, an analytical software tool that performs an automated risk assessment of appraisals. Mortgage lenders are encouraged to use the software to double-check the accuracy of property values and reduce mortgage buybacks.

For now, though, appraisers are not allowed to use the software because they are the “boots on the ground updating property” updating property data, a Fannie spokesman said.

Tim McCarthy, the chief appraiser at his own Chicago appraisal firm, TJ McCarthy & Associates, agrees that technology can’t replace appraisers — though he does believe that it can help them do their jobs better. It’s puzzling to him that Fannie has made its tool available to lenders, but not appraisers out in the field.

“Can you think of any other industry that withholds the best tools available for the professional, and only uses the tool after the job was completed to see if they did it correctly?” he said.


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10th June 2015

No More Middlemen – Full Fee Directory

No More Middlemen

Have you noticed a significant decline of lender work over the past few months? Do you want to learn how to get more appraisal orders and finally get off the Appraisal Management Company roller coaster ride for good?

Like many appraisers I have seen a very significant decline in AMC orders over the past few months. I have been kicking myself in the butt for not getting started on my marketing to Attorneys, bail bond companies and credit unions prior to the interest rates going up.

Luckily I have a steady stream of attorney work that keeps me busy due to having a good contact management system in place and a steady client base of bail bond companies that refer their customers to me.

In this book I have detailed the steps that I take to create an inexpensive mailer to get more work from credit unions, attorneys and bail bond companies as well as the systems I use to continually get more referral work from all my past clients.

This is an incredible resource to those appraisers that are really looking to learn how do market your appraisal company and build up your client base so you don’t have to deal with seasonal and economic slow downs. This kind of work never goes away!

Possibly one of the most valuable aspects of this book is the spreadsheets that include:

2500+ Credit Unions
550+ Bail Bond Companies
300+ Direct Lenders


Chapters Include:

  • How To Use the Spreadsheets Included With This Book
  • Will Rising Interest Rates Affect Your Appraisal Business?
  • Getting Off The Appraisal Management Company Roller Coaster Ride for Good
  • How to Market to Attorneys, Bail Bond Companies, Direct Lenders and Credit Unions
  • Step-by-Step Instructions to Make a Postcard Mailer From Card Design to Mailing
  • How To Get Low Cost Mailing Lists Made Targeting Local Divorce and Bankruptcy Attorneys
  • Tested Methods on How To Get More Referral Work From Past and Existing Clients
  • How to get a FREE Local Listing in Google and Optimize it for Best Results

You are going to especially love the Bail Bond marketing information. These orders are amazing and I have been focusing a lot of my efforts to getting more of their referrals. Why?

When I am referred a customer, I quote 3 fees. I base my first fee off of complexity of the appraisal. Lets say it is a standard tract home in San Diego. I quote them $400 and will inspect within 2 working days and have the appraisal report back to them within 2 days. The second fee is to inspect within 24 hours and have back within 24 hours for $800, and finally a same day inspection and deliver of the appraisal is $1200.

Which one do you think the client wants when they are trying to get a loved one out of jail? 75% of the time it is the $1200 fee for a simple tract home appraisal.

But you do have to follow up to keep these clients, and I have listed all the techniques I use to stay in contact with these clients so the work doesn’t go away.

This resource is jammed packed with information and the spreadsheets are 100% sortable by state to make it easy to create your postcard and do your mailing as noted in Chapter 5: Step-by-Step Instructions to Make a Postcard Mailer From Card Design to Mailing

The next chapter lays out the steps I use to get a massive list of Attorneys in my market area by an inexpensive virtual assistant.

Take the time today to order my New Book & Directory – No More Middlemen – Full Fee & Appraisal Managment Free : 2014 Appraiser Marketing Guide and List of 3400+ Direct Lenders, Credit Unions and Bail Bond Companies and finally get off the crappy appraisal management company roller coaster ride for good!

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Bryan Knowlton
Appraiser Income

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9th June 2015

Fannie Mae accused of widespread racial discrimination

The National Fair Housing Alliance and 19 local fair housing organizations are accusing Fannie Mae of widespread racial discrimination, claiming that the GSE maintains and markets its foreclosures in white neighborhoods “consistently better” than in middle- and working-class African American and Latino neighborhoods.

The groups filed a complaint with the Department of Housing and Urban Development, alleging that Fannie Mae’s neglect of foreclosures in minority neighborhoods in 34 metro areas is a violation of the federal Fair Housing Act.

The NFHA said that the complaint is the result of a five-year investigation into the property preservation methods used by Fannie Mae. In a release, the NFHA said that evidence gathered from 2010 through April 2015 shows an “ongoing pattern and practice of discrimination” by Fannie Mae and its asset management contractors.

“Fannie Mae is wreaking havoc on middle- and working-class communities of color nationwide through a pattern of neglect that is frankly appalling,” said Shanna Smith, president and CEO of NFHA.

“Fannie Mae’s failure to take care of its massive foreclosure inventory in African American and Latino neighborhoods further destabilizes the communities hardest hit by the foreclosure crisis, in clear contradiction of its congressional charter, federal fair housing laws, and its obligation to affirmatively further fair housing,” Smith continued. “This systematic failure also creates health and safety hazards, contributes to blight, and places an unfair burden on neighbors and city governments to clean up the problem.”

The complaintant groups (see below for full list) say they investigated 2,106 foreclosures owned by Fannie Mae in 34 metro areas that include 129 cities and found that properties in communities of color had broken doors and windows, unlocked doors and windows allowing access to the home, excessive litter, dead or overgrown lawns, dead animals or live animals on the property, and other major deficiencies.

When contacted about the allegations, Fannie Mae said that it believes the charges are without merit.

“We strongly disagree with these allegations and firmly believe they have no merit,” Fannie Mae said in a statement to HousingWire. “We are confident that our standards ensure that properties in all neighborhoods are treated equally, and we perform rigorous quality control to make sure that is the case. We remain dedicated to neighborhood stabilization efforts across the nation, including with respect to our maintenance of foreclosed properties.”

In the release, the NFHA said that since 2009 it made efforts to work with the GSEs to correct their property preservation practices.

Freddie Mac looked into its practices and made good faith efforts to correct its business model, but Fannie Mae refused to take responsibility for its neglect in communities of color,” Smith said. “The difference between Freddie and Fannie properties is striking. We now rarely find disparities in Freddie Mac’s inventory. Fannie has to take responsibility.”

The groups said that they investigated foreclosed properties for “deficiencies” that would affect the properties’ marketability and visual appeal. Among those deficiencies are broken, boarded or damaged windows and doors; unlocked doors and windows; damaged and obstructed gutters and downspouts; safety hazards; accumulated trash; overgrown lawns and shrubs; lack of “for sale” signs; and others.

According to the result of the groups’ investigation, 49.5% of the foreclosed properties in White communities had fewer than 5 deficiencies, while only 24.4% of the foreclosed properties in communities of color had fewer than 5 deficiencies.

The groups also said that 22.1% of the REO properties in communities of color had 10 or more deficiencies, while only 8% of the REO properties in predominantly White communities had 10 or more deficiencies.

The groups say there neglected properties in the following cities: Hartford, Connecticut; Indianapolis; Greater Palm Beaches, Florida; Grand Rapids and Muskegon, Michigan; Orlando; Vallejo, Richmond and Oakland, California; New Orleans and Baton Rouge, Louisiana; Chicago; Miami; Richmond, Virginia; Atlanta; Milwaukee; Baltimore; Charleston, South Carolina; Kansas City; Las Vegas; Memphis; Minneapolis; Philadelphia; Phoenix; San Diego; Tucson, Arizona; Washington D.C.; Prince George’s County, Maryland; Dallas and Fort Worth, Texas; Gary, Indiana; and Cleveland, Dayton; Toledo and Columbus, Ohio.

“Fannie Mae has not only ignored the problem but has continued to award millions of dollars in new contracts to the same asset management companies that engaged in this discriminatory behavior,” Smith said. “We have filed this complaint after having exhausted every possible means we could think of to get Fannie Mae to abide by the law and work with us to re-stabilize the damaged communities.”

This isn’t the first time that the NFHA has levied serious complaints against Fannie Mae and its contractors.

In July 2014, the NFHA, Housing Opportunities Made Equal, and Fair Housing Continuum filed a discrimination complaint with HUD, alleging that Cyprexx Services, a Fannie Mae contractor, failed to properly maintain real estate owned properties in African American and Latino neighborhoods in Baltimore, Maryland; Kansas City, Missouri; Orlando, Florida; and Richmond, Virginia.

At the time, a Cyprexx source told HousingWire that the company was not made aware of any complaints and the NFHA, to his knowledge, never reached out.

Cyprexx, for its part, said that it was “extremely disappointed” that the NFHA did not contact it to discuss their concerns before filing the complaint. Cyprexx also said the appeared to be “frivolous, and without reasonable merit.”

After HousingWire posted its first article about the NFHA accusing Cyprexx, more than a dozen commenters responded to the article, with varying degrees of support for Cyprexx or the NFHA’s claims. One commenter said, “Cyprexx (at least in my areas) doesn’t do jack squat with their properties, regardless of what “color” neighborhood it’s in. It’s all the same idea: maintain/pay out as minimal as you can on services, unless it’s an emergency.”

While another said, “This is tantamount to a witch hunt. Anyone in the business knows that maintaining properties in densely populated areas with high percentage of crime/vandalism and often times serious deferred maintenance is a huge challenge. I can assure readers from my first hand experience that banks, vendors and everyone involved does their best to get -0- deficiencies – there is not a higher tolerance for properties in one area getting a higher percentage of deficiencies than another based on neighborhood makeup. The idea that it is racially motivated is nauseating. Our government should get a little more progressive and ask questions instead of blaming.”

The alliance has also targeted big lenders, such as Bank of America, and online real estate market places, such as Zillow and Trulia in the past as well.


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5th June 2015


Editor’s Note: Discovery in an ongoing appraiser lawsuit against a bank and an AMC uncovers troubling evidence pointing to continued pressure on appraisers to “hit value.” (This story is taken from the new print edition of Working RE – in the mail now! Are you a Working RE Subscriber?)

Blacklisting Lawsuit Continues
by Isaac Peck, Associate Editor

In early 2014, North Carolina appraiser Michael J. McSwain filed a lawsuit against Yadkin Valley Bank and the appraisal management company (AMC) StreetLinks Lender Solutions, alleging that he was retaliated against for failing to reach targeted values. (See Smoking Gun Allows Appraiser to Sue Over Blacklisting)

According to the suit, McSwain performed two appraisals for StreetLinks in late 2012, on behalf of Yadkin Valley Bank, both of which failed to “meet value.” The suit cites explicit emails from the branch manager at Yadkin which state: “StreetLinks has sent out a BUTCHER on two of my last refis [sic] … make sure he is not sent out in our county and make sure he is not on the approval list…I thought I would let him do these two just to see. NOW THE DEALS ARE DEAD.”

Yadkin then demanded that StreetLinks remove McSwain from the bank’s Approved Appraiser List and according to new discovery documents that have been made public, McSwain was placed on Yadkin’s Exclusionary List in early 2013. McSwain then filed a lawsuit in February 2014 alleging that both Yadkin and StreetLinks engaged in unfair and deceptive business practices and were engaged in a civil conspiracy to encourage targeted appraisals.

The lawsuit remains ongoing but many of the facts that have come to light during the discovery process will be of interest to appraisers. More than any recent case, McSwain’s suit raises troubling questions regarding appraiser independence: namely, how much has changed since the Dodd-Frank reforms?

Appraiser Panels
At the heart of the issue is whether AMCs should create and maintain their own independent appraiser panels or allow lenders to handpick the appraisers they want used on their loans. In an interview with Working RE, Chuck Mureddu, managing director of AMC Quality Valuation Services (QVS), said that QVS uses its own panel. “We don’t believe in utilizing a lender’s panel because there’s a risk of diluting the independence part of building a fee panel,” said Mureddu.  (See Low Fee Solution: Cost Plus Model)

While independent appraiser panels are not specifically required under Dodd-Frank, many AMCs insist on them in order to safeguard appraiser independence. In fact, StreetLinks’ own Certificate of Compliance, that is issued with every appraisal and is signed by Steve Haslam, StreetLinks’ President and CEO, states that: “Appraiser Selection was performed at the sole discretion of StreetLinks by utilizing a selection methodology designed, maintained, and supervised by licensed real estate appraisers and is based on the criteria of proximity to the Subject Property, availability, and historical quality and performance metrics.”

However, in legal briefs filed as part of the discovery process, StreetLinks states that it “does not decide which appraisers are included on a lender’s exclusionary or preferred list,” writing that such moves are “solely the lender’s internal decision” and that StreetLinks “has no involvement in determining who belongs on the list, or why.”

Loan Production Staff
A central factor in McSwain’s lawsuit is the allegation that both Yadkin and StreetLinks violated appraiser independence by blacklisting McSwain for his failure to “meet value.” So far, Yadkin and StreetLinks deny any wrongdoing, insisting that their actions are completely legal.

The Appraiser Management Services Agreement between StreetLinks and Yadkin states “the lender panel will be delivered by Customer to StreetLinks…and MUST be sent by the Customer’s operations or compliance department directly from the Customer’s corporate office. StreetLinks will not be required to accept Lender Panel information from Customer’s production or sales staff.”

However, the initial suit filed by McSwain cites emails written by Yadkin’s Branch Manager, and a loan officer, which seem to indicate that direct input on the appraiser panel was made by the sales and production staff. The initial email that refers to McSwain as a “BUTCHER” and demands that he be removed from the approved list for “killing deals,” was sent by Yadkin’s Branch Manager, but it was a Mortgage Loan Assistant who ultimately contacted StreetLinks and instructed them to remove McSwain from the approved list. After confirmation that McSwain had been removed, Yadkin’s Branch Manager then forwarded the email chain to several other loan officers with the message: “FYI, I have had two cut deeply by appraiser,” according to the suit.

According to federal regulations, Yadkin is allowed to manage its own appraiser panel, but influence from sales and loan production staff is expressly forbidden. The Interagency Guidelines specifically address this point, stating that the “collateral valuation program is an integral component of the credit underwriting process and, therefore, should be isolated from influence by the institution’s loan production staff” and “the person who selects or oversees the selection of appraisers should be independent from the loan production area.”

Secret Blacklisting
McSwain’s experience is shared by many appraisers across the country who, without warning, suddenly stop receiving work from a client after a “low” appraisal is submitted. The internal emails from Yadkin provide a rare, behind-the-scenes record of what actually happens when a lender is unhappy enough with a missed value to retaliate against the appraiser.

In legal briefs filed as part of discovery, StreetLinks does not address the removal of McSwain from Yadkin’s approved list, but admits that McSwain was placed on Yadkin’s exclusionary list in January 2013 and that StreetLinks did not notify McSwain that he was placed on any exclusionary list. McSwain’s suit alleges that StreetLinks’ failure to notify him of his removal from “its list of qualified appraisers” is against both North Carolina AMC regulations, as well as rules adopted by the North Carolina Appraisal Board, which indicate that AMCs are prohibited from influencing a real estate appraisal by “allowing the removal of a real estate appraiser from a list of qualified appraisers used by any entity without prior written notice to the appraiser” (N.C. Gen. Stat. 93E-2-7 and 21 N.C. Admin Code 57D.0311a). In its discovery answers, StreetLinks expressly denies any obligation to notify appraisers that they are being placed on a lender’s exclusionary list and admits that StreetLinks “has not notified any appraiser that he/she was placed on a lender’s exclusionary list in North Carolina.

It also appears that Yadkin gave StreetLinks instructions to NOT place McSwain on the exclusionary list, but instead to simply remove him from the approved list. However, as part of the discovery process, StreetLinks actually submitted Yadkin’s exclusionary list and it appears that Michael McSwain is on the list.

Regulators Silent
The case remains ongoing in the Gaston County Superior Court and McSwain continues to seek damages from both Yadkin and StreetLinks. It remains to be seen if and when state and federal regulators will become involved in the case. Dodd-Frank defines a violation of appraiser independence as any instance where “A person with an interest in the underlying transaction…attempts to compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate such a person, for the purpose of causing the appraised value assigned, under the appraisal, to the property to be based on any factor other than the independent judgment of the appraiser.”

StreetLinks’ discovery responses seem to provide supporting evidence for McSwain’s contention that he was placed on Yadkin’s Exclusionary List shortly after a Yadkin branch manager referred to him as a BUTCHER and blamed him for two failed deals. According to the suit, Yadkin did not review McSwain’s appraisals for errors or poor judgment and no complaint was ever filed against McSwain for bad appraisal work, nor was McSwain ever notified that he was being removed from an approved list or placed on an exclusionary list. Instead, Yadkin hired other appraisers who submitted appraisals that allowed the two deals to close.

Many appraisers see this case as a clear violation of appraiser independence but so far no state or federal regulators have shown interest in the case. Dodd-Frank mandates a penalty of up to $10,000 per day that the loan exists, so if this case is ever pursued by federal regulators, StreetLinks and Yadkin may each face fines in the millions, since the loans in question were funded in February and March of 2013.


Upcoming Live Webinars:
Bulletproof Appraising: Fannie Mae, Due Diligence and Your State Board – (Two-Part Webinar)
Presented by Tim Andersen, MAI
Part 1: May 12th, 10 – 11:30 a.m. PST
Part 2: May 19th, 10 – 11:30 a.m. PST

Are you prepared to successfully defend your work against inquiries from Fannie Mae, your state board and your AMC/lender clients? This webinar is designed to share an expert’s knowledge of what it takes to protect yourself. Gained through years of defending appraisers before their state boards, over real-life reporting issues, USPAP expert Tim Andersen, MAI helps you fill in any experience or knowledge gaps in your practice so you can appraise confidently and successfully. Learn More/ Sign Up Now!

JUNE: How to Support and Prove Your Adjustments – A Closer Look
Presented by Richard Hagar, SRA
Part 1: June 4th, 10 – 12:00 p.m. PST
Part 2: June 11th, 10 – 12:00 p.m. PST

It was a great webinar, now I need to redo all my reports for the last 30 years!” – Sharon

Updated and expanded, Hagar shows you how to properly support your adjustments- the foundation of good appraising! Regulations state that appraisal adjustments cannot be based upon an appraiser’s opinion. Failure to provide proper proof and analysis to support your adjustments means a rough road ahead: state board complaints, panel removal, lawsuits, even license revocation. Fannie Mae cites “the use of adjustments that do not reflect market reaction” as the number one reason an appraiser can be “blacklisted.” This training is critical in helping appraisers avoid catastrophic appraisal failures. Learn More/ Sign Up Now!

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1st June 2015

Webinar on how to get more non-lender and AMC work

This Free Appraiser Training Will Teach You…

-> How to make your appraisal business STAND OUT!
-> The best appraisal management companies to work with
-> How to do marketing for non-lender work
-> How to be found in your local area online… and why that’s so important
-> Websites: How to set yours up so you can get found in the search engines
-> The right way to build your list and do follow-up (and how to automate a huge percentage of it!)
-> How to build relationships that will send you an endless stream of leads
-> How to use direct mail effectively (i.e. without losing money!)
-> The fastest and easiest way to get #1 rankings in Google (just wait until you see what we were able to accomplish for other appraisers!)
-> One way to reach your list within minutes… and all but guarantee they see your message
-> How you doing LESS work can actually grow your business 10x faster
-> And much, much more!

Register Now For The Next Webinar – we’ll see you there!

Bryan Knowlton

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