Improper Direction to Appraisers
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…specific prohibited direction to appraisers involved in federally regulated transactions…
Improper direction to appraisers as a new special lender condition
Honorable Ladies and Gentlemen:
The following article appeared in a recent online post at http://appraisersblogs.com/appraisers-asked-2-overlook-weed-cultivation (also copied to this letter following our inquiry).
We consider the original author to be a credible source.
Due to the serious implications of any appraisal management service giving such specific prohibited direction to appraisers involved in federally regulated transactions we believe it to be our duty to bring this to your collective attention.
We respectfully request that each Federal Regulatory Agency review this issue and contact Bank of America and confirm whether this direction to appraisers is at their behest, and constitute their instructions and special assignment conditions / directives?
At the same time, we also ask the TAF/ASB to publish an expedited and updated Advisory Opinion specific to this issue. We believe existing USPAP and Advisories already deal with this but due to the gravitas the referenced corporations are perceived to have nationally on lending and appraisal issues, we believe an unambiguous response by the ASB is urgently needed.
As TAF can only speak to USPAP, we further ask that each applicable federal regulatory agency having jurisdiction over all possible transactions that may fall into this category state or restate the Federal Government’s position with respect to property appraisals where conditions that violate federal drug laws (or any other federal law violations) are observed.
Is it only marijuana related violations of federal law that appraisers are being asked to keep mum about, or could this practice of hear, see & speak no evil also include other drugs such as heroin processing, opium growth, methamphetamines /speed, or cocaine/crack ‘cooking’?
Is the appraisal management service’s directed carve-out only an exception to the federal drug laws; or will other federal laws such as prohibitions against child porn, sexual slavery & human trafficking for prostitution, or kidnapping / holding of illegal immigrants hostage for payments also be directed to be ignored?
Will FNMA and FreddieMac be disclosing to potential investors that the bundled securities offered to Wall Street and international as well as national investors may include properties known to be in violation of United States drug laws that may result in the seizure of the collateral for those securities?
Similarly, is the Veterans Affairs Department going to knowingly be guaranteeing mortgage loans where cultivation of marijuana for personal and or commercial use? Is HUD aware it may in the future be insuring loans secured by property subject to potential forfeiture to other federal agencies?
Will B of A be required to disclose to their investors that they are engaged or intend to engage in risky lending practices where the collateral can be seized under existing federal laws?
Will unions, insurers, and municipal – state retirement systems that invest in real estate also be told the portfolio(s) could include property subject to seizure?
It’s doubtful incidents of this type will be as rare as after-the-fact public denials may suggest. If that were the case, then the obvious question becomes “Why was it necessary for B of A or CoreLogic implement such a policy-directive in the first place?”
Lastly, isn’t it time all federal agencies and GSE’s reconsider their over reliance on CoreLogic (CL) and their various services, if they (CL) think actions like this are acceptable? Certainly, they should immediately sever any and all business relationships and/or information sharing programs with companies that think it is acceptable to ignore federal law.
We recognize federal agencies cannot control CoreLogic’s membership or undue influence on the boards of MISMO and The Appraisal Foundation but partnerships with GSEs could be controlled could they not?
Additionally, the ongoing use of the CoreLogic data monopoly by the Treasury Department and all other federal agencies using RealQuest or Realist or other analytics from this corporate conglomerate should be reviewed before the reliance is so great that no matter what violations of federal laws are espoused or facilitated, a blind eye becomes the only solution.
We think the federal government may already have become too dependent on this monopoly.
Following is the CoreLogic communication as it was posted at the above link.
Submitted on behalf of or appraisal members, and the 12 ½ million members, retirees and taxpaying consumers of our parent unions #44OPEIU, AFL-CIO.
Michael F. Ford
American Guild of Appraisers
Chairman NAPRC /V.P. Special Projects
Mobile (714) 366-9404
AGA Office (301) 377-0099
AGA Letter regarding Improper direction to appraisers as a new special lender condition