TSI Fraud & FTC vs. LREAB

Amrock aka TSI Appraisal Guilty of Fraud; Update on FTC vs. LREABAmrock, Inc, formerly Title Source (TSI Appraisal) was ordered to pay House Canary $706 MILLION in damages for theft of intellectual property and fraud. 

Bottom line, there was a 7 week trial with a 12 person jury. Amrock (Title Source) was found guilty of theft and fraud unanimously!

Amrock (Title Source) plans on appealing the verdict.

Housing Wire has an in-depth article with lots of details. See it here.

Things to ponder on:

Should Amrock’s amc license be revoked due to this guilty verdict?
Should appraisers and the public trust a company guilty of fraud and theft?
Could appraisers win a law suit for theft of our appraisal data in Collateral Underwriter?

From HouseCanary’s lawsuit (TSI in the excerpt refers to Title Source):

The full truth behind TSI’s scheme is sinister: notwithstanding TSI’s explicit promises to HouseCanary to the contrary, TSI was attempting to reverse engineer, recreate, and mimic HouseCanary’s software, models (including HouseCanary’s AVM, similarity score model and complexity score model), analytics, value reports, and algorithms–using HouseCanary’s software, data, modeling techiniques, data formats, reports and forms in violation of the plain language of the software license and nondisclosure agreements between the parties.

While gathering confidential data and proprietary reports from HouseCanary under the guise of Amendment One to the MSA Agreement, TSI’s primary focus was on using HouseCanary’s data and model outputs to develop TSI’s own AVM. Members of TSI’s data science team quickly realized that HouseCanary’s data and products were far superior than anything that TSI was licensing, and sought to learn what was behind the sophisticated HouseCanary algorithms so that TSI could develop its own “Title Source Automated Valuation Model,” including a Value Report and a similarity score that were direct copies of HouseCanary’s offerings…

As of Wednesday March 14, 2018, the FTC vs LREAB case has been updated. Here are the highlights:

Judge denys motion from Clear Capital to quash the subpeona. See the order here.

Judge denies the FTC motion claiming LREAB waived privilege. See the order here.

There are other documents and motions of interest that can be found on the public view of the case here.

VaCAP Board
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. Avatar Scott R. says:

    My first thought upon reading this….hope my outstanding accounts receivable from TSI/Amrock will get paid. Ouch. 

  2. Avatar EJ says:

    When will the Feds and our Washington representatives ever see that this AMC fiasco will never work ?
    Nothing but a bunch of crooked con men.

  3. Avatar TruthBTold says:

    As an approved vendor appraiser for TSI I have begun to notice an increase in shenanigans going on with them. Orders I’ve received over the past year have all been COMPLEX assignments. Apparently, this is the result of the staff appraisers passing on anything more than a cookie cutter appraisal. If you are an independent appraiser working with them, thoroughly check the property before you accept the fee and turn time. Also, many of these orders were properties that were re-builds or had significant add-ons. When I call the homeowners, they say “oh, we’re about two weeks from completion, we informed our loan rep of this”. I go thru the 2-3 step process to let TSI know that the assignment is on hold. “but why would they order the appraisal/1004D knowing that work is not complete”? Apparently, the loan staff is under pressure to meet quotas. The order is in the system as being in the appraisers’ hands and as a result, I’ve been registered as being late with the report after turning it in within 48 hours after the homeowners have let me know the work is complete. 

    • Avatar TJ says:

      I have experienced the same thing with them. Borrowers are delaying the process by not calling back or are not available until a week or so later. We are penalized for being late because they and the lender did not complete their due diligence upfront. TSI used be a decent company to work with, now it seems they have hired a new group of really inexperienced people and we are starting all over again.

      And what is with this new name, Amrock. I just don’t get it. Spend 20 years building a brand and reputation and then change it. Anyone that has taken marketing 101, or just uses a little common sense, knows that was the stupidest thing they could do.

      • Avatar Tweety says:

        Maybe the name change is their way of distancing themselves from the sins of TSI Appraisal? Their credibility and ethics are in question that’s for sure. I too have noticed a change in their practices and attitude toward appraisers, and it’s a change for the worst. I’ve seen a few posts where their staff appraisers complain of crappy orders and borrows who don’t respond, the turn time criteria, and being penalized for things beyond their control. Maybe that’s their client base these days, are they scraping the bottom of the barrel?

    • Avatar SuzC says:

      I am experiencing the exact same things!!!

  4. In answer to VaCAPS first question; “Should they lose their license…?” ABSOLUTELY! This is an offense involving fundamental integrity (or the lack thereof). If any appraiser in America were found guilty of USPAP ethics related charges arising from outright dishonesty they would never appraise again. It would be all over. NO amount of fines will change their demeanor. Firing the CEO by the Board of Directors is not an answer either since it is the Board itself that is accountable. THEY set the corporate tone of what is and is not acceptable. Title Insurance Companies have reigned supreme in California (and national) real estate transactions for many decades now. They have become all powerful and monopolies in their own right (First American). With great power comes great responsibility. When they are caught dead to rights with their hand in the cookie jar taking cookies without permission and ten trying to cover it up. There can be only one solution. Don’t let them have access to that, or any other cookie jar forever. Any arguments that dozens or even hundreds of innocent individuals will lose their jobs does not  mitigate TSI’s offense. The fact that they are appealing the decision demonstrates that there is absolutely no remorse. Click https://www.amrock.com/ to see how many facets of real estate and affiliated services they are involved in. In California, it is the title company that actually funds the escrow account to complete a sale. Have these people demonstrated that they can be trusted with hundreds of millions of dollars of consumer and bank funds? The California Insurance Commissioner should (subject to their appeal) put them on notice that upon losing their appeal they will also lose their license to sell any form of insurance in California. DRE and Secy. of State Dept of Corporations should also look into their activities under separate jurisdiction. Every state they operate in or are licensed to operate in should have formal inquiries filed asking whether theft is considered a serious problem for a title insurance company in that state. By the way, House Canary doesn’t get off scot free either. Where did THEY get all the so called proprietary transactional data that went into their algorithms?  

  5. Baggins Baggins says:

    Where is my advocate? You will be demoted to silver which will negatively effect your ability to attain orders if you reject too many orders, run late, or negotiate the rate. The distribution industry on all sides is populated largely by unlicensed egotistical crooks who can not hold a simple conversation about real estate or distribute and manage orders fairly for the life of them. Appraiser licensing for all distribution workers could have stopped this.

  6. Avatar Jim P says:

    I have personally had many dealings with Amrock and found their staff to be completely unprofessional. I was threatened by a nasty disgusting pathetic woman named Maryann Houmani on numerous occasions not to pay me on jobs in a rude manner (with a deep manly baritone voice) if I didn’t do this or that which INCLUDED coming in at a certain value. Her supervisors did nothing about it. This company should be shut down for violating the law in many facets.

    • Avatar Roger M says:

      Troll Alert: This comment/commenter was flagged as suspicious!

      I have also had a similar experience with the same person! It was over a different matter but I agree. That Maryann Houmani is a ***profanity redacted***

      • Avatar Sadie duva says:

        Hello Roger,

        I’ve had a similar experience with this woman who sounded half a sleep. Would it be ok if i reached out to you?

    • Jim, IF you were an AGA member, we would willingly file the complaint for you, if requested.. As an independent appraiser you SHOULD file a complaint about the alleged misdeeds attributed to Ms Houmani.

      Why try to hang on to a client that is eventually going to throw you under the bus anyway? People that make threats will eventually carry out the one they can at least pretend is legitimate. That of turning YOU in to state regulators over  some meaningless technical oversight that has no bearing on the conclusion.

      • Baggins Baggins says:

        Until such time as all individuals at assignment companies are individually licensed, there will be no accountability. I miss the days when we could appeal to licensed qualified people. The same people whom are not qualified to be trainees, are the ones ‘managing’ appraisers these days. From the distributors to the technical software people, professionalism in appraisal is at an all time low.

        • 25 years ago I hired the reviewer from a now defunct bank. He used to make our lives impossible on 704’s reading out of his reviewers textbook (apparently). When his bank folded (big bank at the time) I hired him as a trainee. Of 8 trainees that we had, he was the only one that never could learn to appraise. He simply could not grasp the concepts. THOSE  are the people many AMCs staff their order desks with.

    • Avatar Sadie duva says:

      Hello Jim,

      I’ve had a similar experience. Would it be ok if i reached out to you?

  7. Avatar Leigh Besson says:

    It is not humanly possible to obtain an order from them.  I was looking at my computer today and a “opportunity” came in their email.  I clicked on the link in under 1 second,  Last Pass login software logs me in (I have hundreds of login’s on Lass Pass) in under 1/2 second.  The screen comes up where we click, “accept”.  I clicked “accept” in under 2 seconds from getting the email.  Then the order disappears, gone.  So unless you get to the accept button in under 2 seconds you will not get an order.  Even if you do click “accept” you will not get an order.

    • Leigh, Respectfully these are not orders that you can legitimately accept anyway. Whoever IS accepting them is already violating USPAP out of the gate.

      FNMA requires competency BEFORE accepting an assignment. In two seconds, no one can determine if they are competent to perform the specific assignment or not.

      Instead of trying to play their game, we should ALL be working to put an end to these type of broadcast orders for first acceptance/lowest fee wins.

      For my part, if I hear or see the name “AMROCK”, my only answer is ‘no’. I’ve never done anything for them as far as I know and would never do anything for any company that operates this unethically.

      AMROCK in case YOU didn’t catch the nuance, ANY or ALL companies that push out orders and assign them without having assured yourselves of the specific appraisers competency to do a specific property appraisal is operating unethically and dishonestly. License level is NOT an accepted proof of competency for specific assignments.

  8. Avatar Scott says:

    After reading up on both companies, I’m 100% now…..not certain which one is worse.

    HouseCanary is trying to put ALL appraisers out of business with their AVM’s and other valuation products.

    Amrock/TSI has at the very least always paid me for the work I’ve completed for them through the VA.

    I’d love to see HouseCanary go the way of the Dodo bird…..but I doubt that will happen.

  9. Received call from Guild member earlier today. He did one of the ACI software Property Data Reports (PDR) for Amrock. $150 fee order # XYZ. He finishes and delivers the report. A week later Amrock orders full appraisal using 1004 on the same property. $400. New order number ZYXW. Amrock then says they are not paying him for the prior PDR since he would have had to inspect the property anyway for the 1004!

    (1) What an absolute scumbag organization Amrock is.
    (2) THIS is what happens when lenders and AMCs order inspections intending to obtain PIWs which then dont get allowed.
    (3) Appraisers should NOT be doing any inspection product which may later come back as an appraisal request for this bottom feeding, low balling deadbeat company.

    Amrock you can have your attorneys contact me via my website if you think I’ve defamed you but just keep in mind that truth is an absolute defense, and most appraisers I know believe you defame yourself with your lousy business practices and dishonest behavior. I am encouraging our member to file formal complaints against you with the state regulators in the state this happened in.


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TSI Fraud & FTC vs. LREAB

by VaCAP Board time to read: 1 min