Anatomy of a Substantiated (AMC) Complaint
Diligent Asset Valuations Alleged Multiple Non Payment to Appraisers
Anyone that knows me, or who has read past comments concerning California BREA’s non enforcement of C&R fees also knows I’m not generally their (BREA) biggest fan.
However, it would be intellectually dishonest not to recognize a case where they did the right thing. The case in question, BREA vs Diligent Asset Valuations (DAV), involved alleged multiple order non payment to appraisers by an AMC where orders were placed or assigned through the MERCURY NETWORK.
The specific logistics of how Mercury is involved could be of interest to those that use that service. I don’t, and cannot offer comment except to say it would be prudent to look into the matter. It’s nice that Mercury had records of multiple non payment complaints, but the question I have is WHY THEY ALLOWED DAV TO KEEP PLACING ORDERS THROUGH THEM AFTER THE FIRST UNRESOLVED COMPLAINT???
I tend to be unforgiving on issues of non payment. Either the money is owed or it is not, and it should not take more than a single phone call to resolve that. Whether there are mitigating circumstances (money is in the mail and got lost; stop payment and reissue all within two weeks could require more than one call). We all know the difference between a truly concerned AMC response and a run around. Perhaps MERCURY may wish to reconsider its user ordering agreements.
According to the complaint (and stipulation) DAV operated for years as an unlicensed AMC in several states.
Doesn’t MERCURY regularly check to see that the companies it allows to use their service comply with laws in the states that they are placing orders for? If AMCs can notify appraisers when their licenses or E&O is set to expire, portal networks should be able to accomplish the same thing for their lender and AMC users.
Again, some revision of their process seems to be in order. Perhaps a ‘member or authorized AMC’ section that has links to ALL the state licenses / registrations the AMC operates in along with their expiration dates. My understanding is ASC is either working on something along those lines or may already have it.
MERCURY was the online portal service involved in the instance being cited but it could just as easily have been another access and re-ordering appraisal management service (AMS) or portal service. ALL should learn form this incident and take the initiative to fix their systemic loopholes that appear to have allowed or facilitated an AMC without a license in multiple states to operate in their system. According to BREA, MERCURY knows it processed 63 orders from DAV after their California state registration had expired. How many from other states is not known.
Again, this is not an indictment of MERCURY. I am simply pointing out questions that arise from the BREA vs DAV complaint in question. I assume Mercury will take immediate steps to prevent these kind of problems in the future.
ALL appraisers should read the entire stipulation and complaint. Below is the PDF copy of the stipulation / Order only as it restates the complaint. Both the complaint and stipulation (Final Order) can be read on the BREA website. In California the BREA is found online under their old name – OREA.ca.gov.
As appraisers we may need to make suggestions for AMC or portal regulation to federal authorities so that a bad actor AMC in one state cannot simply drop that state from their coverage area and resume business in the other 49 states and 7 territories. Lenders that use the portal system(s) direct should also be included in any payment issue reporting section. Obviously they are exempt from AMC licensing, but identification as direct-client originators could be just as helpful.
I hope the blog readers will analyze the complaint/stipulation carefully in order to offer constructive suggestions. Let’s not merely bash all the AMC’s, portals or state regulators. Let’s try to develop practical methods of assuring payment, and broad public identification of those that do not pay promptly.
Anyone can have one or two payment issues, but when companies have multiple issues then that information should be made known.