TSI Fraud & FTC vs. LREAB

VaCAP Board

VaCAP Board

Coalition of Appraisers in Virginia at Virginia Coalition of Appraiser Professionals
Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.
VaCAP Board

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Amrock aka TSI Appraisal Guilty of Fraud; Update on FTC vs. LREABAmrock, Inc, formerly Title Source (TSI Appraisal) was ordered to pay House Canary $706 MILLION in damages for theft of intellectual property and fraud. 

Bottom line, there was a 7 week trial with a 12 person jury. Amrock (Title Source) was found guilty of theft and fraud unanimously!

Amrock (Title Source) plans on appealing the verdict.

Housing Wire has an in-depth article with lots of details. See it here.

Things to ponder on:

Should Amrock’s amc license be revoked due to this guilty verdict?
Should appraisers and the public trust a company guilty of fraud and theft?
Could appraisers win a law suit for theft of our appraisal data in Collateral Underwriter?

From HouseCanary’s lawsuit (TSI in the excerpt refers to Title Source):

The full truth behind TSI’s scheme is sinister: notwithstanding TSI’s explicit promises to HouseCanary to the contrary, TSI was attempting to reverse engineer, recreate, and mimic HouseCanary’s software, models (including HouseCanary’s AVM, similarity score model and complexity score model), analytics, value reports, and algorithms–using HouseCanary’s software, data, modeling techiniques, data formats, reports and forms in violation of the plain language of the software license and nondisclosure agreements between the parties.

While gathering confidential data and proprietary reports from HouseCanary under the guise of Amendment One to the MSA Agreement, TSI’s primary focus was on using HouseCanary’s data and model outputs to develop TSI’s own AVM. Members of TSI’s data science team quickly realized that HouseCanary’s data and products were far superior than anything that TSI was licensing, and sought to learn what was behind the sophisticated HouseCanary algorithms so that TSI could develop its own “Title Source Automated Valuation Model,” including a Value Report and a similarity score that were direct copies of HouseCanary’s offerings…

As of Wednesday March 14, 2018, the FTC vs LREAB case has been updated. Here are the highlights:

Judge denys motion from Clear Capital to quash the subpeona. See the order here.

Judge denies the FTC motion claiming LREAB waived privilege. See the order here.

There are other documents and motions of interest that can be found on the public view of the case here.

VaCAP Board

VaCAP Board

Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.

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11 Responses

  1. Scott R. says:

    My first thought upon reading this….hope my outstanding accounts receivable from TSI/Amrock will get paid. Ouch. 

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  2. EJ says:

    When will the Feds and our Washington representatives ever see that this AMC fiasco will never work ?
    Nothing but a bunch of crooked con men.

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  3. TruthBTold says:

    As an approved vendor appraiser for TSI I have begun to notice an increase in shenanigans going on with them. Orders I’ve received over the past year have all been COMPLEX assignments. Apparently, this is the result of the staff appraisers passing on anything more than a cookie cutter appraisal. If you are an independent appraiser working with them, thoroughly check the property before you accept the fee and turn time. Also, many of these orders were properties that were re-builds or had significant add-ons. When I call the homeowners, they say “oh, we’re about two weeks from completion, we informed our loan rep of this”. I go thru the 2-3 step process to let TSI know that the assignment is on hold. “but why would they order the appraisal/1004D knowing that work is not complete”? Apparently, the loan staff is under pressure to meet quotas. The order is in the system as being in the appraisers’ hands and as a result, I’ve been registered as being late with the report after turning it in within 48 hours after the homeowners have let me know the work is complete. 

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    • TJ says:

      I have experienced the same thing with them. Borrowers are delaying the process by not calling back or are not available until a week or so later. We are penalized for being late because they and the lender did not complete their due diligence upfront. TSI used be a decent company to work with, now it seems they have hired a new group of really inexperienced people and we are starting all over again.

      And what is with this new name, Amrock. I just don’t get it. Spend 20 years building a brand and reputation and then change it. Anyone that has taken marketing 101, or just uses a little common sense, knows that was the stupidest thing they could do.

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  4. In answer to VaCAPS first question; “Should they lose their license…?” ABSOLUTELY! This is an offense involving fundamental integrity (or the lack thereof). If any appraiser in America were found guilty of USPAP ethics related charges arising from outright dishonesty they would never appraise again. It would be all over. NO amount of fines will change their demeanor. Firing the CEO by the Board of Directors is not an answer either since it is the Board itself that is accountable. THEY set the corporate tone of what is and is not acceptable. Title Insurance Companies have reigned supreme in California (and national) real estate transactions for many decades now. They have become all powerful and monopolies in their own right (First American). With great power comes great responsibility. When they are caught dead to rights with their hand in the cookie jar taking cookies without permission and ten trying to cover it up. There can be only one solution. Don’t let them have access to that, or any other cookie jar forever. Any arguments that dozens or even hundreds of innocent individuals will lose their jobs does not  mitigate TSI’s offense. The fact that they are appealing the decision demonstrates that there is absolutely no remorse. Click https://www.amrock.com/ to see how many facets of real estate and affiliated services they are involved in. In California, it is the title company that actually funds the escrow account to complete a sale. Have these people demonstrated that they can be trusted with hundreds of millions of dollars of consumer and bank funds? The California Insurance Commissioner should (subject to their appeal) put them on notice that upon losing their appeal they will also lose their license to sell any form of insurance in California. DRE and Secy. of State Dept of Corporations should also look into their activities under separate jurisdiction. Every state they operate in or are licensed to operate in should have formal inquiries filed asking whether theft is considered a serious problem for a title insurance company in that state. By the way, House Canary doesn’t get off scot free either. Where did THEY get all the so called proprietary transactional data that went into their algorithms?  

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  5. Chrome1 return (Chrome test) Apologies to all. 2 returns1 return 2 returns 

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  6. Baggins Baggins says:

    Where is my advocate? You will be demoted to silver which will negatively effect your ability to attain orders if you reject too many orders, run late, or negotiate the rate. The distribution industry on all sides is populated largely by unlicensed egotistical crooks who can not hold a simple conversation about real estate or distribute and manage orders fairly for the life of them. Appraiser licensing for all distribution workers could have stopped this.

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TSI Fraud & FTC vs. LREAB

by VaCAP Board time to read: 1 min
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