Can you say ‘L-A-W-S-U-I-T’ boys and girls?

Michael Ford

Michael Ford

General Certified Real Estate Appraiser at Michael F. Ford Appraisal
Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory
Michael Ford

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AMROCK Valuations New Service Seems to Seek Circumvention of USPAP!Fellow appraisers I strongly discourage anyone from accepting AMROCK Valuations work generally due to their poor track record in dealing with appraisers across the country; and their apparent habit of making up their own appraisal rules as they go along without regard to C&R fees; Dodd Frank and most other common sense sound appraisal practices up to and including USPAP.

Y’all remember USPAP don’t you? A series of uniform rules we’d all follow to promote, preserve and protect the American real estate appraisal profession and the American Public. That is until it became an inconvenient impediment to MISMO; FNMA and hustlers of bundled collateral backed securities. Those uniform “principles” that seem to require change or novel new interpretation as often as the tides; blowing winds or underwear. The ones turned into laughing stock by The Appraisal Foundation and many lenders appraisal management services.

More importantly though, is the newest ‘poorly designed product’ by AMROCK Valuations. I think it’s significant that the term or phrase “USPAP” does not appear once in the advertisement. Maybe just an oversight? Like lack of compliance to it apparently is.

Appraisers are cautioned against accepting any of the following order types from them. They do NOT conform to the requirements of USPAP as postulated, regardless of what these jokers claim about FNMA ‘accepting’ them.

There is nothing wrong with an owner, agent or anyone else ordering a listing or pre-purchase appraisal. It’s a perfectly legitimate use. It MAY even seek to develop market value or it may seek only to develop a best probable asking price or price range. Such an appraisal is NOT however for mortgage lending purposes. It is to assist the client (whoever that may be) in establishing an asking or possibly selling price. Presumably one with a near or reasonable relationship to market value. Both the intended use and intended user are different than the product AMROCK describes.

Our liabilities to unintended third parties are already unreasonably open ended. This service expectation aside from other issues only exacerbates the problem! It could even have the end result of negating recent State Appellate Court published decisions about unintended third party users by specifically creating a condition where reasonable people or triers of fact would conclude the seller; the buyer and the lender-client all had reason to rely on one or both of the appraisal versions. Hell, may as well toss in the listing and selling agents too since both can now argue the initial intended use was to serve as a guide to them in their listing and selling process!

It is (presumably) for marketing purposes on behalf of a seller; or potential reassurance of a possible group of hoped for buyers.

AMROCK Valuations may, or may not be the actual ‘client’ since they seem to like to jump back and forth between being an AMC and lender. Hard to tell which specific hat they are wearing in these products.

IF it does not have a buyer or a sales contract then there IS no pending mortgage, and claiming it is for mortgage purposes is an outright lie.

SUBSEQUENT uses may improperly attempt to have the scope of work expanded to cover mortgage lending, but those are NEW appraisals, (even if incorporating old data & inspection results). They have their own compliance issues. One is that AMROCK Valuations does NOT GET TO DICTATE how to write a USPAP compliant report! An addendum of their design and choosing does not cover all your obligations under USPAP including disclosure of prior services in the signed certification section. Because AMROCK couldn’t care less about USPAP compliance, it’s no surprise they fail to see the potential conflict aspects of what they propose.

I get the concept of wanting to identify & be able to resolve all likely appraisal issues up front; determining price; & maybe even having an understanding of the market value. THAT is one specific use that requires it’s own appraisal for marketing purposes. Also, a more skeptical person might argue it is a phenomenally ignorant marketing ploy founded on the misguided notion that sellers; listing agents and loan officers not yet legitimately invited into a future transaction BY A BUYER, are attempting to ‘steer’ transactions to a particular lender.

I wonder if the FTC & state or federal regulators are paying attention?

When the property sells 60; 90 180 or 365 days later, the hypothetical buyer may decide “I’ve heard about Quicken Loans and AMROCK Valuations and I do not want to have anything to do with either of them.” So what then happens to the appraisal? Isn’t this just a ruse to attempt to have sellers control WHO a buyer selects for their loan officer or mortgage broker? Anyone want to bet if the deal does NOT go to AMROCK, the appraiser isn’t likely to get paid? Since there is no buyer yet there is also no likelihood anyone has paid up front for the appraisal and its actually a contingent assignment.

In the same time frames, a buyer says OK, you convinced me to go with these guys who had a hand in developing the price being asked, and then confirmed it by an appraisal (or vice versa), ordered from people of unknown qualifications and independence. People that agreed in advance (contingent conditions?) to provide supplemental services after their appraisal, to change the intended use; intended user, contract analysis conclusions, and client by addendum only.

People who, when market conditions change are automatically put in a potentially compromising position of having to maintain support for their own prior opinion, or admit they may have been wrong in conclusions such as trends.

TRY convincing a buyer they were given an impartial purchase transaction appraisal when it is cobbled together from a marketing appraisal performed by the same appraiser. Just TRY to defend THIS one before your state Board! Let a buyer discover just one undisclosed thing about the property unrelated to FNMA requirements or AMROCK’S special requirements; or even defects not apparent at the time of the pre listing appraisal but which may be argued to have taken place between the first appraisal and its amended addendum. Can you say ‘L-A-W-S-U-I-T’ boys and girls?

Some national corporate brokerages are already showing a trend of filing state regulator complaints automatically when they dont get their values. Two that I reveiwed in the past week involved some of the best appraisal work I’ve seen in awhile

Has it occurred to anyone to ask why most current valuation efforts & new mortgage ‘products’ seem to seek circumvention of USPAP rather than to provide better protection and reassurance to consumers, investors and taxpayers alike?

FNMA proved some time ago that if they ever had an understanding of USPAP it either died of old age, neglect or simply because it became inconvenient and an impediment to accelerated reckless lending policies. So, it would not surprise me if what AMROCK is claiming about ‘FNMA saying these are ok’ has a grain of truth to it.

Then again, it IS AMROCK making the claim so draw your own conclusions.

Other AMROCK Valuations fiascos can be read at:

AMROCK Low-Balling Your Talents

AMROCK VALUATIONS Seller Ready Program

Hello (name redacted),

Amrock will be placing informational 1004 and 1073 appraisal orders on potential purchase transactions! The subject properties are fee simple, and the purpose for this type of order is mortgage financing. An addendum may be ordered to update the contract section when a purchase agreement has been executed.

What’s different about these orders?

• These are pre-purchase deals and are to obtain market value.
• At the time of order the buyer is to be determined.
• There will not be a purchase agreement available.
• The property may or may not be listed.

How do I complete the report?

• Disclose if the property is listed in the report.
• The borrower field in the subject section should be completed as “to be determined.”
• The contract section should be marked “I did not analyze the contract for sale for the subject purchase transaction.”

Is this acceptable per Fannie?

It is! Please see the Fannie Mae reference: B4-1.3-02: Subject and Contract Sections of the Appraisal Report (04/15/2014).

Thank you,

Maria Tobey
Amrock Valuations

Michael Ford

Michael Ford

Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory

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10 Responses

  1. Kimberly DeFilippis says:

    Thank you for saying out loud what most of us think about this company.

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  2. Mike Kuhn on Facebook Mike Kuhn on Facebook says:

    Unbelievable…..

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  3. Marion says:

    An AMC has no USE of an appraisal. Hence it can not be the client. This is poofed away by requirements that AMCs are agents of lenders. But, without a purchase agreement there is no Lender. So what magical USE of a pre-listing appraisal does an AMC have??? And how does the property owner’s USE conflict with the uses an AMC might have for a pre-listing appraisal? Is the seller going to be forbidden from selling the property to an old cash buyer? Should the seller receive a discounted price, because two comps in the neighborhood were purchased with sales concessions?

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  4. marion says:

    And consider that in a per-listing appraisal, the only entities with a USE of the report, are the seller and the marketing company. If AMCs are going to market the property for the seller, and then make the loan to the buyer, they will be working both sides of a transaction. Therein lay the lawsuits that will make headline news.

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  5. TruthBTold says:

    FNMA abandon USPAP when they went bankrupt and starting working as flunkies for the banks!

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  6. Fritz Vogel AGA,CRS,CEI,GRI 27+ Yr Cert. Residential says:

    I’m happy with Amroc. They always pay and pay in 20-40 days. The only work I do for them is VA, so no bikering about TT and fees. Some cubical dweller may ask for S&*t but that’s life.

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  7. Baggins Baggins says:

    Remarkably close to a foreclosure process appraisal. The bright idea of the day was, we’re not managing any pre listing appraisals but we read all the time about appraisers providing these.

    The pre listing violates AIR if used for mortgage lending after the fact because it was ordered by an interested party. They could have sourced a hundred of them until they got the results they wanted. What if these are pre foreclosure appraisals and they’re using the appraisal to confirm a narrow margin to help people sell out prior to them having to actually foreclose. Double win because they offload the purchase appraisal cost on the active loan management side, then can solicit ‘free appraisals’ for future customers. What if every single one of them was a borrower with a current mortgage in place whom is experiencing distressed financial conditions? Did they tap into the fsbo market through one of those big fsbo websites? Where are the customers coming from?

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    • Don Donk on Facebook Don Donk on Facebook says:

      Yes. That is my question. Where are they getting their customers from?

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      • Baggins Baggins says:

        It’s too coincidental that this mirrors the HUD approach to reo development which even HUD got away from in the last 5 years or so. aka; to be determined lender and borrower. If anyone has log ins to fsbo sites, some searching there might bring some information. Where else could a company capture pre listing appraisal requests in volume?

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Can you say ‘L-A-W-S-U-I-T’ boys and girls?

by Michael Ford time to read: 5 min
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