Appraisers Alarmed by USDA’s Poor Decision

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USDA Appraisers Alarmed by Verdi Consulting & Clarocity's Engagement

Verdi Consulting has no business being involved with appraisals… they have fraud examiners that should have done some due diligence on Clarocity…

Nope, not going to happen…

I received an email from what appeared to be from USDA. As a long time USDA appraiser, I opened the email:

Verdi Consulting, Inc. has been engaged by the United States Department of Agriculture, Rural Development Office as one of two vendors under a Blanket Purchase Agreement (“BPA”) for Nationwide Single-Family Housing Origination Appraisals. The USDA has provided your information as a preferred incumbent Vendor Appraiser. We would like to invite you to register and sign up as a qualified vendor appraiser to receive requests under this contract.

Vendor Appraiser Management for this contract is managed by our sub-contractor Clarocity Valuation Services (“CVS”). Clarocity is a National Licensed Appraisal Management Company (“AMC”) and will oversee all appraiser services including engagement and appraisal management related services and all aspects of appraiser vetting, management and order. To register and sign up as an appraiser for this contract, please click here

If you have any questions, please do not hesitate to contact us on USDA-RD@Verdiconsulting.net.

We look forward to working with you.

Well, I can’t repeat the words that I blurted out in this blog article, but rest assured, I would never allow my kids to speak them and my mother would have grabbed a bar of soap!

From Verdi Consulting’s’ website:

Our team includes certified public accountants, fraud examiners, government financial managers, information systems auditors and information security professionals.

They have no business getting involved with appraisals! Further they have fraud examiners that should have done some due diligence on Clarocity. If they could not see the fraud committed by Clarocity and all you have to do is Google Clarocity. It will go down-hill quick, very, very quick. Verdi Consulting has no business being involved with appraisals.

Clarocity is not an American owned company. They have a very poor reputation among appraisers for non-payment, slow payment and below reasonable fees. Appraisersblogs has had many articles warning appraisers of their financial difficulties, fractional penny stock prices and nonpayment to appraisers. If memory serves, didn’t Clarocity use the upcoming government shut down as the excuse they did not pay appraisers?

Financial difficulties aside, Clarocity has been the biggest promoter of bifurcation. This has failed, not once, but twice. Now they are going at it again with IROC as their new owners.

USDA originates mortgages for low income borrowers in rural areas with little to no money down. These loans carry a higher risk and allowing a company like Clarocity to be involved in any capacity does nothing to protect the borrower, the investor or the communities. The consumer/taxpayer is on the hook for even more.

I spoke with my USDA local agent that I have worked with for many years who referred me to the national office. I have sent a letter expressing great concern and advised them I will not be registering with Clarocity.

I encourage each of you to contact USDA and express concern for this very poor decision as well.

Administrator’s Office
(202) 690-4730; (f) 202-690-4737
Address: USDA Rural Development
Rural Business-Cooperative Service
1400 Independence Ave. SW, Rm 5803-S STOP 3201
Washington, DC 20250-3201

By Advocate. The author is a Certified Residential Appraiser and has chosen to use the pen name Advocate to protect their identity. Many famous people including Benjamin Franklin, Agatha Christie, and Steven King have written under a pen name for various reasons. Just Google pen names used by famous authors, there are only 45,700,000 results to choose from.

Image credit flickr - FJ

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17 Responses

  1. Avatar JW says:

    I was hoping someone would post a blog with concerns. I got the email to sign up. Its my understanding there are two companies so hopefully the other company will have a better reputation

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  2. Avatar Ash Malnati says:

    Waiting for VA to do something similar eventually

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  3. Avatar Koma says:

    Sad! I was told about USDA looking for this to happen last year from my local rep. After 11 years working with RD it’s unfortunate because I will not sign up with Clarocity.

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  4. Wow! I had assumed the previously highly touted “new government contracts’ cited by Clarocity before their stocks went under 1/2 a penny, had fallen through.

    This is unbelievable. In addition to writing to the USDA Administrators Office it’s going to take writing to House Financial Services Committee and others as well. Why on earth would any government agency contract with a company whose stocks and securities cannot even legally be offered for sale in the USA?

    Especially a company with as tarnished a reputation as Clarocity?

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    • Baggins Baggins says:

      When dealing with appraisal related content, who has the time?

      If it was a public bid like HUD REO MM contractors, the government agency will have just checked for compliance with registration standards and then skipped to the bidding number. If there are any compliance standards for recognition of reg z and fair appraiser billing, that’s easy to skip past as well. Because after 10 years of highly aggressive operations, amc’s have never been given an honest national audit of cost of service differences, they’re simply not worried about it.

      That’s what’s really great about amc’s as far as government is concerned. They do it cheaper and faster. Or so they claim. I’ve never had usda work, not sure how that works.

      You guys, everyone should sign up. For the primary purpose of documenting the abuse and forwarding the requests to the usda heads.

      Unlike mortgage lending conventional, it may be somewhat more difficult to conceal the clients name during the bidding and undercutting the appraisers fee process. Signing up and accepting orders are two entirely different actions. If you actually want to see the client return one day, you should be on that mailing list.

      My crystal ball is glowing. They’ll hit the ground running and will not have a clue what a fair fee for this work should be. They’ll test everyone on panel for discount fees and within a month or two will redirect the majority of all work orders to the few absolute lowest bidders. Cost savings from reduced price of appraisal service will not be returned to borrowing consumers.

      The pertinent question remains the same. What was the client charged for this service. If an appraiser can not get an answer to that question they should refuse service. I’ve asked that for so many years, I’ll tell you my fee if you tell me yours first. I’ve attained the information from low level people sometimes, often learning they charge variable fees based on negotiations with individual clients. When working with amc’s, the appraiser is the customer. You can’t get around it.

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  5. Avatar Tobby says:

    I’m stunned that Clarocity would be involved with USDA appraisals. I really have to wonder how that decision was made. Maybe follow the money? Mad Maxine might want to look into this.

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  6. Bill Hattaway on Facebook Bill Hattaway on Facebook says:

    2 months ago I registered for my government SAM account and CAGE code so I could receive USDA orders directly from the regional USDA office in my area. I completed 3 USDA appraisals at a good fee. Last week I received this same email. I responded that “Clarocity had a track record of not paying appraisers and while Valligent didn’t pay C&R fee’s.” The USDA replied that there was noting they could do about the fees but if we didn’t get paid for a USDA appraisals to let them know. They have thrown us to the wolves.

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  7. Avatar Residcert says:

    Whose hands did Clarocity grease to get that contract. Since when does USDA allow a company to sub contract with a company whose parent company is registered in Canada – has their policies always been so? What’s next Chinese or Indian corporations- Overseeing Appraisals for AMCs, USDA, FHA , Fannie and Fred?

    4
  8. Bill Hattaway on Facebook Bill Hattaway on Facebook says:

    FYI for other USDA appraisers; I asked if we needed to maintain our government SAM accounts and Cage codes. They replied yes if we still wanted to be considered for Foreclosure Cost Valuations.

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  9. Avatar Milton P says:

    I will not be signing up with Clarocity. Not now or ever. By far one of the worse amcs out there. And not just because of their financial difficulties!

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  10. Avatar Milton P says:

    Everyone should contact Verdi Consulting as well and share with them your thoughts of Clarocity. I agree with the author, Verdi Consulting has no business be involved with appraisals. Clearly, they have no idea what they are in for!

    info@verdiconsulting.net

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    • Avatar JW says:

      My guess is verde consulting is Clarocity reinvented. I hope to get a request to sign up with the other AMC thats suppose to be the only other one the USDA is working with

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    • Be very careful of any comments to Verdi re Clarocity. Don’t get yourselves sued.

      We have a legitimate interest as taxpayers in asking USDA what the heck they were thinking, and inquiring as to how they were selected. Also, whether their past reputation with appraisers was considered. Is USDA aware they are a Canadian company whose stock (in the past) could not even be offered for sale legally in the USA?

      As concerned appraisers, our interest is also legitimate in assuring USDA is dealing through someone that both the government and appraisers believe is trustworthy and competent. I’d be very careful about offering any direct personal views that aren’t factually objective.

      2
  11. Avatar Advocate says:

    Well this is where it is going… no appraiser license required.

    1

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Appraisers Alarmed by USDA’s Poor Decision

by Guest Author time to read: 2 min