Have AMCs Gone Dark?

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.
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Clarocity May Have Gone Dark.... Have AMCs Gone Dark? Clarocity May Have Gone Dark…

VaCAP has learned from one of our members the Appraisal Management Company, Clarocity Valuation Services, may have gone dark. The VaCAP member has invoices for their services over 30 days old and Clarocity has been unresponsive to numerous emails and phone calls over the past several weeks. Additionally, new orders are being assigned through their portal, Appraisal Scope.

Virginia passed a 30 day prompt payment law that went into effect July 1, 2017. The statute is very clear that an AMC must pay an appraiser within 30 days from the initial delivery of the report. VaCAP members initiated this legislation to protect appraisers from exactly this type of abuse. See the statute here. Clarocity may be in violation of Virginia Statute and we encourage all appraisers that have past due invoices to file a complaint with DPOR. This can be done here.

As an FYI, Valued Veterans merged with Clarocity recently and Valued Veterans was found to be operating in Virginia without proper licensure in May 2016. See the letter sent from DPOR to Valued Veterans below or here.

VaCAP has also learned Atlantic1 is past due on paying some appraisers. Atlantic1 could not be found on DPORs website as a licensed entity in Virginia, but with some research we learned the owner of this company has a history of not paying appraisers. Mathew Moore, the principal of Atlantic1, has operated AMC’s under the name Newtown Appraisal Management, LibertyOne, Maverick, Atlantic-West and Palm Beach Appraisal Management. Lots of information is found by simply Googling any of these names. There is a complaint on the website RipOff report for his operations. See it here.

VaCAP cannot encourage enough to do your due diligence before accepting  work from anyone. There are numerous groups on Facebook that you can get peer feedback on everything and there is one group specifically designed for AMC feedback. Take advantage of these great resources.

“Appraisergate” Scandal Uncovered

All appraisers need to listen to the Voice of Appraisal E182. Phil discloses an “Appraisergate” Scandal. AMC’s have gotten caught adding appraisal requirements that the lender did not request, nor does the lender endorse; one of which is the use of Appraiser Trainees. It is time for appraisers to communicate directly with the lenders. The lenders are being blindsided by what is in the engagement letters of their AMCs and they are not tolerating this abuse. Listen to the show here.

Have You Heard About Prohibition?

AppraisersBlogs published an article on how an AMC prohibits the use of third parties. The article is rather humorous, but it does make a point of how clueless AMC s are in what appraisers actually do and the resources we use to provide valuation services. This may be related to the “Appraisalgate” Scandal talked about on Voice of Appraisal, but the article suggests talking to your legislators about what is going on and supporting your state coalitions, as they are gaining traction. See the article “Prohibition is Back!” here. There are lots of other great articles on Appraisersblogs as well.

Let’s Talk Fees!

The 1004D form is a dual purpose form. The first part of the form asks has the market value declined since the original appraisal report and the second part asked if the construction is complete/repairs have been completed.  The scope of work for these two options are quite different. The first section requires market research, analysis and a new  USPAP compliant work file. The second option is merely verifying the work has been completed and references the original appraisal.

A recent waive of these Appraisal Update Forms are asking for option 1; has the market value declined since the original appraisal report. Your fee for these assignments should correlate to the amount of work necessary for credible results. Many AMCs do not understand the difference and will attempt to low ball your fee to the option 2 fee.

If you receive a request for an Appraisal Update, option 1, verifying if the market value has declined and you were not the original appraiser, think long and hard before accepting that assignment. If you choose to accept it, make sure your fee correlates to the scope of work and your liability in putting your signature on that certification. By completing that assignment you are certifying you agree with the original appraiser and the value; AKA, an appraisal review with a complete USPAP compliant file and certifying to any change that may or may not have occurred.

#GivingTuesday

The Virginia Coalition of Appraiser Professionals Participates in Giving Tuesday. We accept monetary donations as well as volunteer commitments. To volunteer your time, click here. To make a monetary donation, click here, or mail to:
VaCAP
P.O. Box 42314, 
Richmond, VA 23242.

To join VaCAP, click here.

Thank you for supporting VaCAP

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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25 Responses

  1. Koma says:

    You know what else seems shady; Clear Capital used to show how much of a fee was being paid for an appraisal they would not pay my fee for, but now they don’t. For example a 1004 fee of $500 from me that was declined they would show appraisal accepted, by another appraiser, at a fee of $325. Are they doing this for the states that have a Customary and Reasonable Fee requirement? Because with proof from their website the $500 appraiser that did not get the job can turn them in? Sounds exactly why they are doing this now.

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  2. Baggins Baggins says:

    In early November this year I solicited to valued veterans. The manager informed me the company was bought out by Clarocity. Also then following up they are shutting down the KC office. 

    For 1004d, I keep a special introductory page and this data entry line reiterating those statements in the brief available space under the question of value; (I do check the no box to bypass digital review compliance questions.)  “No. Assumed no. This final inspection report is only to verify the requested corrections were completed.” The final is not stand alone it rides ‘by attachment’ to the 1004. It subsequently does not require a value update. If value is altered at a later date a myriad of complications can arise. If the report is subject to you’re expected to present a value hypo as if the conditions did not exist, so value update is pointless for condition change and it’s assumed the seller won’t improve the property beyond the subject to conditions. If buyer or seller improves more than required that won’t change their existing loan and deal terms and they’ll need to quick refinance or re write contract to capture any improved value. The checkbox reviewers often have a difficult time grasping these complex concepts so if you just check no and put a note in there, the little red flag digi review box does not light up and they don’t even notice the bypass of data entry. New effective date = new assignment, and it’s better to furnish a new as is report instead of an updated 1004d value. The 1004d allows the original effective date to stand, despite necessary condition changes. Value update on 1004d is limited to the very rare scenarios of needing an extension of shelf life to use the appraisal. Live deals with completed 1004 reports rarely languish that long before finalizing.

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    • Mark SKAP says:

      Clarocity is not out of business and not dark. I spoke with the owner and also Ernie Durbin. They maintain their own email and phone systems and have had a huge issue with them. They are working on getting this fixed ASAP. They also stated all payments have been verified and sent out or will be. I had a good long conversation with them on this issue and they are trying hard to fix it ASAP.

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    • Rocky says:

      Baggins, I don’t understand half the technical jargon you posted but there is a lot of chatter going on between investors and management of Clarocity and management has gone dark on our red flag concerns as well. I am coming to you for help as we are concerned the vision we have been sold is a far departure from the health of the company.

      I see you have been following this company for over a year and was curious if you had any appraiser networks where we can get an idea as to how widespread or isolated the nonpayment is to appraisers, and how tardy the payments are.

      From an investors perspective, we are worried the company is out of cash, though they did just take on another 2.5m credit facility from a control person, assumedly to pay these outstanding fees (https://www.stockhouse.com/companies/bullboard?symbol=v.cly&postid=26987396)

      The CVO Bill Walterburg said any nonpayment affected a “nominal” number of appraisers and that past due payments were “just a few days late”. Any reports or formal complaints we can get our hands on? Cheers.

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  3. VaCAP Board VaCAP Board says:

    Update to the article: We have received word that the VaCAP member who is having difficulty collecting payment was able to get through to someone. He was told Clarocity is closing an office and was given another number to call. Of course he got voice mail.

    We also received a link to a Market Insider article stating Clarocity is issuing stock in llieu of interest payments…… Makes you go Hmmmm. Closing offices, late payments and issuing stock in lieu of payments, does not seems like a good recipe for success.

    Clarocity stock

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  4. VaCAP Board VaCAP Board says:

    Here is the link to the article:

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  5. wontobey says:

    The article states “Clarocity has been unresponsive to numerous emails and phone calls over the past several weeks…”

    Some of us are smart enough not to believe such claptrap excuses from an AMC claiming that they are having issues with their phones and emails and the check is in the mail. How are they communicating with their clients? They have no issue when it comes to ordering new requests….

    but when it comes to paying appraisers… “We’re sorry you have reached a number that has been disconnected or is no longer in service. If you feel you have reached this recording in error, please check the number and try your call again…and btw the check is in the mail”

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    • Baggins Baggins says:

      New tech is not good tech until it’s old tech.

      Year 1990: The phone is not working, the check is in the mail, the dog ate my homework.

      Year 2017: The advanced special proprietary phone and email tech integration systems went down. The third party deposit service and their subsidiary check issuing company are experiencing delays. The robot broke something and we’re trying to figure it out.

      I think I’ll stay in 1990 for a little while longer until these geniuses can figure out how to use their own inventions properly.

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  6. Baggins Baggins says:

    An appraisal management company issuing stocks? Their value is tied to the intellectual production worth of a group of independent freelance workers whom are not obliged to follow a single directive or instruction unless terms are agreeable.

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  7. VaCAP Board VaCAP Board says:

    Colleagues,

    We are very pleased to report our member who had several past due invoices from Clarocity has received payment on his past due invoices.

    We also wanted to share the following email from Bill Wattenbaugh at Clarocity. This is in direct response to our warning about them. Continue to read below for our response.

    To whom it may concern
     
    You recently provided an email correspondence to your readership regarding the status of Clarocity Valuation Services. The title of this communication read “Clarocity May Have Gone Dark.” Please see below and provide an update to your readers.
     
    I am the Chief Appraiser at Clarocity Valuation Services. Please be advised, Clarocity Valuation Services has not gone dark. However, due to the recent acquisition of Valued Veterans, there have been a few hiccups in merging both the email and phone systems. The difficulties surrounding this process are also the reason why some payments were processed just a few days late. While the number of appraisers affected by this transition is nominal, it does not change the fact that a mistake was made. For this, we sincerely apologize. 
     
    The phones at Clarocity Valuation Services were never down, and calls were received every business hour of every day. Clarocity Valuation Services was not aware of the issue until it was brought to our attention. When two companies merge, some of the multiple phone numbers and email addresses can slip through the cracks. While we prefer this would have never happened, it did. Again, the number of people affected by these issues was nominal. However, it is being made to sound like it was a more significant/widespread issue. I assure you, it was not. 
     
    Clarocity Valuation Services works very hard to maintain good relationships with our appraiser partners. We understand we cannot do what we do without your support. For this reason, please feel free to contact me directly anytime you have any concerns regarding payment or regulatory compliance. I promise I will do all I can to make things fair and right. If I do not answer, please leave a message, and I will get back to you as soon as I can. 
     
    Bill Waltenbaugh, SRA, AI-RRS
    Chief Appraiser
    Clarocity Valuation Services
    (760) 208-6463
     
    Thank you

    VaCAP’s Response:

    Bill,
    Thank you for your email.
    When our member first brought the issue to our attention, he provided documentation of his efforts to contact someone at Clarocity over a two week period with no response. Attempts were by phone and several different emails. He was leaving messages and sending emails; no one was calling or emailing back. 
    Further research was done and we found several other appraisers had posted similar concerns in Facebook groups about past due payments form Clarocity. Rightfully so, red flags were raised at this point. Our concern was escalated when a representative of another State Coalition shared with us the article stating Clarocity was issuing stock in lieu of payments. No communication, past due invoices, stock in lieu of payments, stock prices continuing to fall since the first of the year; not giving anyone reassurance all is good at Clarocity. Our concerns and warning to appraisers was valid and justified. 
    We have heard back from our member today informing us he has received payment on his past due invoices via direct deposit. Thank you. Unfortunately, he still has not received any communication from anyone at Clarocity, which is disheartening. It really does send the wrong message to the appraisal community when there is a lack of communication. 
     
    We will send out an update sharing your contact information to our members and post an update on Appraisersblogs.

    Thank you.

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  8. Rocky says:

    Anyone have anything to say? Does this jive with everyone’s experience?

    Clarocity Corporation Receives MOR RV2 Vendor Ranking from Morningstar for Second Consecutive Year Canada NewsWire CARLSBAD, CA, Dec. 6, 2017CARLSBAD, CA, Dec. 6, 2017 /CNW/ – Clarocity Corporation (TSXV:CLY; OTCQB:CLRYF) (the “Company” or “Clarocity”), a leading provider of residential valuation technology and solutions, is pleased to announce that Morningstar Credit Ratings, LLC affirmed its MOR RV2 residential-vendor ranking for the second consecutive year. Morningstar affirmed a Stable outlook for the ranking.”As we are now fully integrated from both a technology and operational perspective, we are committed to fueling growth while continuing to deliver our services in an effective and timely fashion,” said Shane Copeland, CEO of Clarocity Corporation. “The renewal of Morningstar’s vendor ranking affirms to our clients that our corporate operations and technology are effective, secure and well managed. The positive results of the updated Morningstar ranking are key to Clarocity’s future participation in the expanding securitization valuation market in the U.S.”According to Morningstar’s ranking announcement: “Clarocity has effective vendor management oversight in place for assessing vendor performance. Clarocity has developed vendor-selection criteria and scorecards that effectively measure agent performance, as reflected in the execution of service-level agreements with its customers. The company’s agile proprietary technology platform embeds comprehensive quality-assurance standards in work orders received from agents as well as providing clients with an expedited report turnaround time and low revision rate. A comprehensive multi-level quality assurance program is in place that measures and tracks vendor performance as well as assessing internal quality control effectiveness via scorecards, senior appraisal-level reviews and various production reports that are reviewed by operations and executive management.”

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  9. David P says:

    10.15 million dollar loss for the first 9 months of the year. 6.8 million dollar loss for same period 2016.
    https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=3218277 

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Have AMCs Gone Dark?

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