Tagged: Errors & Omissions

E&O Binder Page in Appraisal Reports: Just Say No 11

Quit Doing This. Just Say NO!

E&O coverage has nothing at all to do with underwriting mortgage loans… Do not include your E&O binder page in any appraisal report. Period. End of story. Especially if you are being ‘managed’ by an AMC who has that in their engagement agreement, claiming it’s a lender requirement. A while ago, I received a “correction notice” via a prominent AMC for a report I submitted: “Per lender requirements, evidence of E&O coverage must be included in the report.” My response to the AMC directly via email, not in the report, was this: “To: AMC rep Is there any way you...

Desktop Appraisal... Should I or Shouldn't I?  28

Desktop Appraisal… Should I or Shouldn’t I? 

New wave of AMCs desktop “appraisal” products… VaCAP has received several emails from members concerning a new wave of desktop appraisals available from some AMCs. These products have an inspection of the property performed by another individual and the photographs and property specific data is provided to the appraiser. The AMC’s are claiming that the entire product is on-line and no written report is needed. They also claim the report is USPAP compliant. They are looking at compensating the appraiser $65 and the report should take approximately 45 minutes to complete. VaCAP does not have any specific knowledge of these...

Amendments To Sales Contract - Contract Amendments - When? 2

Contract Amendments… When?

Amendments to Sales Contract & Updates to the Appraisal… Fannie Mae recently issued the following: Currently, we require the lender to provide the appraiser with all amendments made to a sales contract, including amendments that are made after completion of the appraisal. With this update, we have clarified when the appraiser must be provided with updates to the sales contract and circumstances that warrant updates to the appraisal. For example, if the contract is amended in a way that affects the description of the real property used by the appraiser, then the lender must provide the updated contract to the...

Forms Designed for Specific Purposes - Appraisal Forms Designs 6

Appraisal Forms Designs & Purposes

These forms were “designed” to be used for those specific purposes… Appraisers, Earlier this week, I discussed the following about some lenders requesting a type of property inspection to be completed on a form “Not Designed” for the specific property type: Original observation discussed earlier this week: Read the highlighted sentence. Read the highlighted sentence again. According to a regional bank in my area, via info from their AMC, “thousands” of Manufactured Home appraisals have been done on the 2055 form. Do you do that, just because someone – who just wants to “make a sale” – tells you to...

AMC Non Grata 12

AMC Non Grata

I’m coining the phrase AMC non grata… Appraisers, There’s an old, accepted diplomatic term being used by US government folks these days: “persona non grata‘. It refers to a diplomat or other approved foreign nation person being involuntarily removed from the host country, on very short notice. In the most recent case it applies to Russians being expelled from the US due to the alleged actions of their government in the last election. ‘Persona non grata’ got me to thinking. We have instances in our profession where AMC’s become expelled from our businesses. So I’m coining the phrase AMC non...

Amateur AMCs Misguided Requests 12

Amateur AMCs

Amateur AMCs Misguided Requests & Unecessary Demands… Folks, I’ve written consistently over many years about the misguided request many lenders and AMCs have about “requiring” appraisers to include a copy of their license and E&O binder page in reports. I have consistently suggested appraisers PUSH BACK whenever you encounter this demand when it is in the list of items to be included, shown in the AMC assignment engagement documents. I’m not the only one doing this. It is absolutely essential that you review these docs prior to accepting and doing any assignment for anyone, especially the multiple new amateur AMCs...

Wells Fargo & Inflated Appraisal Fees: The End of AMCs? 5

The End of AMCs?

Wells Fargo has agreed to a $50 million settlement over inflated appraisal fees. Think about this for a minute….. The people bringing the lawsuit (the “Plaintiffs”) claim that Wells Fargo violated Federal law by charging homeowners more than the amount Wells Fargo paid for Broker’s Price Opinions (“BPOs”) and improperly concealing these “marked-up” charges. So, Wells Fargo was charging customers more for BPO fees on defaulted loans than the actual fees charged by the vendor. Is this any different than the use of an AMC? From the case: “Wells Fargo does not identify any provision in any of the numerous...

Tell Them to Find Some Other Lesser Experienced Appraiser 16

Tell Them to Find Some Other Lesser Experienced Appraiser

Tell them they are NOT needed in the report. The march of many appraisers who blindly comply with AMC & other lender ‘demands’ to INCLUDE YOUR E&O BINDER PAGE and FULL SIZE LICENSE COPY in every report. Inclusion of your E&O Binder in reports is the quickest and easiest way to have your report challenged, and for you to be sued. Why would you want to do that? Inclusion of your license copy is absurd. Your license info is already in every single report you submit, or hadn’t you noticed that tidbit of info? If AMC clerks tell you that...

AMC Vendor Agreement Controversies - Bad, Worst & Ugly AMCs 36

Vendor Agreement Controversies & Worst AMCs

AMC Vendor Agreement Controversies – Bad, Worst & Ugly AMCs And the winner is… According to a recent non-scientific survey conducted by AppraiserNews, the World’s Worst AMC Alive is Clear Capital. Honorable Mention goes to Coester VMS and Streetlinks. And the Worst Vampire AMC title goes to AppraiserLoft which is no longer operational. Excerpt: We’d also like to note the passion with which appraisers made their votes, describing the many ways that these AMCs deserved their titles! One final remark: It is sad that so many appraisers still hesitate to go public with their comments about AMCs, (justifiably) fearing that...

Greed Takes Over With Next Loss of Memory 13

Greed Takeover Coming Soon

Basic greed and institutional memory I am amazed how many times in my lifetime I have seen the past repeat itself. Beginning in the 1970’s, I have witnessed one form of financial meltdown after another, each occurring almost precisely 10 years after the last. I once had a wonderful professor who explained that the seemingly inevitable repetition of the past was based on numerous, very different factors, but with two factors appearing in virtually every case. The two “alpha” factors are (1) basic greed and (2) institutional memory. Basic greed is when one group of people is willing to compromise...

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