Another AppraiserLoft?

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 Valuation Services Red Flags... Another AppraiserLoft?If you do work for Clarocity Valuation Services, you definitely should pay attention…

Simple Wall St reports:

“Clarocity has limited growth and a worrying balance sheet”

On November 26, 2017 VaCAP shared an issue with one of our members not receiving communication from Clarocity Valuation Services concerning past due invoices. Due to our research and public sharing, our member was paid. During that time, VaCAP learned some things about Clarocity and we continued to follow the company.

We are not going to tell anyone who to do business with or how to operate their business, but we ask that the analytic appraiser in each of you look at the information and make your own conclusions about what is going on.

If you do work for Clarocity Valuation Services, you definitely should pay attention.

There is lots of information on the web about Clarocity. We encourage you to research on your own.

Here are some highlights what we have learned:

December 1: Clarocity issues 6,176,029 shares of common stock in lieu of $419,970 of interest only debt.

On December 6: Clarocity took on $1.1 million in debt at 24% interest. This includes a $100,000 buy down of the rate. Think about that for a moment. What is the cash advance rate of your credit cards? A 10% buydown of the rate?

December 6: TSX Venture Exchange has consented to the reduction in the exercise price or warrants. This was a renegotiation of the stock share price in lieu of a cash payment to a creditor.

December 7: A lively conversation about how Clarocity bringing on Appraiser Loft Executives and repeating the same bad behavior.

Clarocity has been issuing stock shares in lieu of debt since September, 2017, possibly earlier

December 8: Clarocity Stock closes at $0.055 per share. When we reported our story, stock prices were at $0.07.

Clarocity stock down

December 13: Stockhouse Bull Board: Discussions of a tax loss sell off and Clarocity being acquired by another entity.

December 14: Simple Wall St reports

Clarocity has “limited growth and a worrying balance sheet”

“Calrocity is loss making”

“Clarocity has negative assets”

December 18: Clarocity borrowers another $1,320,000 @ 24% interest!

As previously stated, if you do business with Clarocity, you need to be paying attention.

Could this be another AppraiserLoft situation for appraisers?

Image credit flickr - jenny downing
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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23 Responses

  1. TJ Everette says:

    Here is link to Barron’s. Lots of info here including all the financial statements and a list of their direct shareholders… There is even a prediction for 2018 for this company and it does not get out of the red. We all need to pay attention. Lots of speculative chatter going on about amcs being in serious financial trouble and it is not just Clarocity. 

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  2. Eric West says:

    Clearly, the terms of the new debt (10% fee upfront, 24% annual interest, & the issuance of stock warrants) show that this company is in dire financial straits. I would think that there are many AMCs that are having money problems with the decline in the number of mortgage applications. Especially smaller ones.

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  3. Xpert says:

    Yup smells and looks like another AppraiserLoft! Thanks for the heads up vacap

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  4. Gary says:

    Holy crap. Twenty four percent interest….I’m in the wrong business. Just told another AMC I don’twork for AMcs. It’s a real good feeling… Merry Christmas to all..

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  5. Carl says:

    Zaio rebranded as Clarocity! Remember Zaio? If they are the old Zaio guys then they are great at scamming people.

    “Zaio Corporation (TSXV: ZAO) (the “Company” or “Zaio”) is pleased to announce that is has officially re-launched as Clarocity Corporation (TSXV: CLY) as part of its strategy to take the company to the next-level as an integrated technology and services company providing the next-generation of appraisal and valuation solutions. Clarocity is entirely about NEXT.”

    …it should read “as a part of a new strategy to scam and cheat appraisers

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    • Carl, seeing ZAIO was a subsidiary of theirs is alI would have needed to know. ZAIO was a complete scam.

      IF they have offered appraisers stock in lieu of payments dues, then they are in violation of US SEC rules.

      Good looking out for appraisers VaCAP!

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      • David P says:

        WOW!  IF they are involved with that type of activity, people will go to jail! It would be a shame if an innocent appraiser was dragged into the middle of an international securities scandal.

        Every appraiser needs to investigate who they are considering doing business with and pay attention to receivables. THERE ARE RUMORS GOING AROUND THAT SEVERAL AMCS WILL BE SHUTTING DOWN QUIETLY OVERNIGHT by the end of the year. Some things that are being said are credit lines were cut off; demand notices being sent for immediate payment; $4 million in appraisal fees will be unpaid and unrecoverable by one entity, investigations by regulators have amcs running scared.

        Please pay attention and share with other appraisers. We need to help protect ourselves.

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        • Cort says:

          David P, do you have names of the AMC’s you mention? That would be helpful. I notice that too often AMC’s are referred to in general terms, instead of specifically identifying the actual bad players. We as a profession should not be afraid to identify the bad apples. Besides, if a company is about to stiff you, who cares what they think of you?!

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  6. Seneca says:

    Carol Trice is Director of Quality and Review Services for Clarocity, Inc.
    https://www.appraisalbuzz.com/quality-vs-condition/

    Carol is related to Joan Trice. Never trusted Joan as a speaker for us appraisers.
    I also received this email yesterday.

    Dear Valued Vendor: Due to an increase in anticipated order volume in your area, we are inviting you to update your profile and compliance documents. Please confirm the following items are both current and uploaded to your profile: 
    *Agree to Terms and Conditions
    *Enter billing information- upload w-9
    *Enter E & O information- upload E & O
    *Enter license information- upload current license. 
    Please log into the system and update your profile.  
    The website is http://www.cvsorders.com  If you have forgotten your password, please hit forgot password, enter your email and a password reset email will be sent to you.  Please note that we cannot send you work until your profile is completed. Thank you for your attention to this matter. We look forward to continuing to work with you.
    Kathy Lombardo
    Vendor Management Clarocity

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  7. Diana N. says:

    Interesting, I have been getting a lot of emails from them for work. Shades of ES Appraisal Services. I’m sure a lot of you remember those SOB’s. 

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  8. wontobey says:

    Appraisers are reporting that this company asks for appraiser’s signature stamp file! This alone should have been  a red flag for appraisers.

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  9. SDMike says:

    I’ve always said that AMCs look and feel like a Ponzi Scheme. We all know that they don’t release the reports until they’ve received payment for them, so why do we wait 30-60 days to get paid??? They’re using tomorrow’s revenue to pay yesterday’s bills. When is the money going to run out? We know that they pay their office staff every week or every other week so the appraisers come in second place in the payment race. Just doesn’t sound right to me.If they have to wait until next month to pay us, when they’ve already received their payment from the lender, the two things just don’t line up in the logic column.

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  10. Diana N. says:

    Just got another email from them, wanting my E & O, W-9 and License. They must be getting desperate this is the 4th one this week. 

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  11. TJ Everette says:

    I guess the Board of Directors does not trust the management…..

    Clarocity Corporation Announces Retention of Financial Advisor by Strategic Alternatives Committee Canada NewsWire CARLSBAD, CA, Dec. 27, 2017 CARLSBAD, CA, Dec. 27, 2017 /CNW/ – Clarocity Corporation (TSXV:CLY; OTCQB:CLRYF) (the “Company” or “Clarocity”) is pleased to announce that its Board’s Strategic Alternatives Committee has retained Keefe, Bruyette & Woods, Inc. (“KBW”), an investment bank, as part of the Company’s previously announced strategic alternatives review. KBW has been engaged to provide certain financial advisory services to the Strategic Alternatives Committee in connection with certain potential strategic transactions. Clarocity Corporation Announces Retention of Financial Advisor by Strategic Alternatives Committee

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    • I wonder if they are (legally) separated from their U.S. Counterparts down in San Diego County California? Either way, neither appears to be registered to sell or offer stock in the USA. Makes me wonder how they could ever have offered stocks in lieu of money owed; if they in fact offered stock in lieu of appraisal fees that were due.

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  12. TruthBTold says:

    Just wanted to say thanks VACAP. You offer a true “value-adding” service. 

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    • VaCAP is possibly the most active State Coalition in the country and they do fantastic work. But lets all PLEASE stop using the term “Value added” with respect to real estate appraisal ok? It is another one of those deceptive euphemisms coined by Big Data (“Leveraging” advocates). It is quite frankly pure bullshit!

      We are professional real estate appraisers. If people do not believe they have a need for us – then don’t use us; but do NOT expect me to include or ‘throw in’ some kind of “added value” like I’m selling used cars, aluminum siding or time share investment opportunities.

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  13. TruthBTold says:

    I was reading about “value-add” in real estate valuation books over thirty years ago??????

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    • Doesn’t make it right. Its one of those catchy buzz phrases or slogans that sound good until you really think about what that means in terms of a real estate appraisal. I think what tipped the scale for me was hearing it used to justify alternative standards for evaluations.

      Maybe I’m just getting old and cranki(er). What didn’t warrant a second thought 30 years ago now seems to be a major issue in a lot of areas. Then again, thirty years ago I didn’t have third party people in a position to mess with my pay or ability to earn a living.

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      • Diana N. says:

        Mike, my thoughts exactly. Getting really tired of all the BS. maybe that’s what they want, to wear good appraisers down, so they only deal with those that do and say what they want them to do. So much for appraiser independence.

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        • There is a lot in what you say. States have lost a lot of license revenue. My state’s volume is down by 50%. I read their “strategic vision” and it’s focus is on increased enforcement.

          Not because of increased violations and complaints, but for revenue purposes. One of the ASC functions is to make sure states have adequate funding to carry out their obligations. I think its time to recognize many have never had adequate budgets, and in recent years even those that did, no longer do.

          I’m not a great fan of federalism but I don’t really see a viable alternative anymore. Lot of appraisers I speak with concur.

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Another AppraiserLoft?

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