Bounced Checks, Bankruptcies & Waivers
VaCAP has learned that another AMC might be having financial difficulties. There are conversations currently taking place in two appraiser groups on Facebook. The discussions revolve around bounced checks from an appraisal management company. The comments are varied and some are stating they are having no issues with this particular appraisal management company when it comes to payment. Others are stating invoices are past due from April and late payments have been the norm with this amc recently. One commenter stated their bank has issued a hold on checks from this amc. Then there is the original post from an appraiser stating the checks bounced. However, yesterday, on July 11, 2019, the AMC emailed appraisers on their panel the following:
Date: July 11, 2019
Subject: Important Update – Appraisal Nation
Last week Appraisal Nation was a victim of fraudulent activity. To protect our company and the bank, a decision was made by Branch Banking and Trust Company (BB&T) to temporarily freeze our account.
Unfortunately, this caused some checks to be returned. Understandably, the returned checks were cause for alarm to the appraisers impacted by this criminal activity.
Appraisal Nation’s Chief Financial Officer and our President worked with BB&T to quickly resolve the problem and our account was unfrozen the same day .
Please click HERE to view the letter of good-standing provided to us by BB&T.
We are thankful that this matter has been resolved, and only a small percentage of appraisers were impacted, but we understand the unnecessary stress caused to those affected.
Thank you for your hard work and Appraisal Nation looks forward to our companies growing together!
VaCAP encourages each of you not only to stop and look at your receivables, but to take action to protect your income. Virginia requires appraisal management companies to pay appraisers within 30 days of initial submission of the appraisal report. Senator Wagner introduced the legislation on behalf of VaCAP and all Virginia appraisers. VaCAP supported the bill to ensure Virginia appraisers are protected.
If you are owed money from an appraisal management company that is past 30 days, do not wait. Take immediate action to obtain your money. Here are some suggestions:
- Call the amc and discuss the issue.
- Notify the lender of the situation in writing via certified mail. The amc is an agent of the lender and the lender is responsible for the actions of the amc.
- Proceed with caution. Consider the consequences by accepting more assignments from the amc until the issue is resolved.
- File legal action against the lender and amc to obtain a court ordered judgement. Depending on the amount owed, a small claims court filing may suffice, if not the assistance of an attorney may be beneficial.
- Once a court ordered judgment is received, file a claim against the amc’s surety bond with the Virginia Appraisal Board. Remember, the longer you wait, the less likely you will see any funds.
In other news, Bloomberg has reported Stearns Lending LLC has filed for Chapter 11 Bankruptcy. Stearns blames rising interest rates as the cause for the $1.16 billion in liabilities and has only 1.22 billion in assets. The restructuring of Stearns involves acquiring a $35 million loan to keep the company running and another $60 million cash infusion. See the article here.
Also, HousingWire reported that Virginia-based Live Well Financial, a reverse mortgage lender that ceased operations in May, has been forced into involuntary bankruptcy. See the article here.
And, on July 9, the Appraisal Subcommittee granted the waiver to North Dakota. ASA announced:
On July 9, the Appraisal Subcommittee (ASC) held a special meeting to act on a received request from the state of North Dakota asking for a five year waiver of residential and commercial appraiser licensing and certification requirements, subject to certain dollar thresholds. After remarks from both the North Dakota Department of Financial Institutions, who supported the waiver, and the North Dakota State Appraiser Licensing Board, who opposed the waiver, as well as nearly three hours of debate among ASC members, the ASC voted 5-2 to provide a temporary waiver.
The waiver, which applies to both residential loans below $500,000 and commercial real estate loans below $1,000,000, is for one year with an ASC-activated option for a second year provided that both the Department of Financial Institutions and the Appraiser Board work productively to address issues that lead to some of the longest turnaround times in the nation, whether or not those issues are related to the presence or absence of a scarcity of appraisers in North Dakota.
The grant of a waiver must be concurred in by the Federal Financial Institutions Examination Council at its next meeting before a final order can be issued. As part of the public comment period, ASA joined with the Appraisal Institute, the American Society of Farm Managers and Rural Appraisers, and MBREA to voice our opposition to the proposed waiver. To read those comments, click here.
- We the People… - April 9, 2023
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I just can’t understand why AMC’s and Banks are not allowing Licensed Residential Appraiser to appraise for fha and various other entities before they open the flood gates?
Why are states putting a time limit on Licensed Residential Appraisers experience logs. Many Licensed Residential Appraisers were forced out of business due to the college degree requirement but still maintained their licenses. Once the Appraiser qualifications were updated to no longer mandating college degrees. The Virginia State Board of Appraisers has implemented a 5 year limit on experience instead of following the AQB Regulations of no time limit for experience. State Boards are stopping qualified Licensed Residential Appraisers from re-entering the Appraisal industry. This needs to be addressed so there will not be a need to have more appraisal waivers granted.
So lets see, lenders & big brother cause the problem (use of AMC’s, 50% fees, scope creep, 20 page engagement letters, no trainees, no residential appraisers (cert. + only), etc. / no C&R enforcement, increase license requirements, UAD mandated portals, sponsored waivers, no appraisers on congressional hearing panels, etc.), but the solution is to issue a short term waiver where potentially 90% (???), of the residential work goes away overnight? Addressing the issue (not really, as no focus will be on the above issues) in a year, when the state has an equal reduction of active appraisers (90% ???), will only reinforce their decision to make the waiver request permanent.
What a joke!
Seek the truth.
Assuming the letter is legit, I am inclined to give the benefit of the doubt to the AMC on this one. While these occurrences are not common-they aren’t all that rare either. I’d be concerned about unpaid invoices over thirty days though. THAT suggests they are not paying appraisers from the funds received for the appraisers specific job, but are rather relying on new orders to pay old outstanding prior debts.
THAT is an exceptionally bad but all too common practice!
Glad I’ve given up Bank work!!!
One time Ocwen took 3-4 months to pay me. I don’t know how appraisers even go with those programs. When anything starts running late, I turn the water off myself and move down the line.
Appraisers whom extend months of full time and employee time billing credit towards a management company who’s clearly not paying on time, they must be desperate. Why wouldn’t they instead take time to market to direct assignment companies? Pure desperation. Those appraisers would probably do better off and earn more in sales.
Ocwen was in this recent news. One could only hope they laid off their entire amc and appraisal management department.
Hello everyone, we are a small appraisal company in Las Vegas, NV. We did a few appraisals for Appraisal Nation several years ago and we were paid in about 2 weeks and then never heard from them. I did read the letter from their president regarding non payment for appraisers due to COVID-19. Recently we have been getting a few orders from them almost every day but I am reluctant to accept or bid. Has anyone gone back to accepting orders from them and if so, are they back to paying appraisers in a timely manner? Thank you for anyone’s response and stay safe!