Appraiser Removed from AMC Panel due to Fraud

Homeowner report appraiser identity fraud

Homeowner was not comfortable with the apparent fraud that was committed…


I am sometimes offered information about appraiser issues in a confidential nature by other appraisers. When that occurs, I do not distribute specific information about the issue, but may choose to reveal facts via the ‘big picture.’

This is one such case:

A homeowner decided to refinance their home. Appraisal appointment was scheduled. ‘Someone’ showed up at the home to do the interior & exterior inspections and take photos, etc. When the homeowner asked who that ‘someone’ was, ‘someone’ provided a different appraiser name.

Report was completed and submitted to the AMC. The report was then submitted to the lender, who sent it to the homeowner per lending regulations.

Turns out the homeowner works as an assistant to another Certified appraiser in that regional location. The homeowner and the Certified appraiser discussed the report. They talked about the ‘someone’ who was at the home, as compared to the report’s signing appraiser. The homeowner’s employer (the Certified appraiser) happens to know the signing appraiser via classes and other interactions. That person’s physical description did not jive with the ‘someone’ who inspected the home. The signing appraiser’s name was the one provided by ‘someone.’

The Certified appraiser contacted me to discuss options the homeowner would have. The homeowner was obviously not comfortable with the apparent fraud that was committed. It was determined the best way to handle the situation was to have the homeowner contact the lender and reveal to them what happened during the property inspection and subsequent report.

The lender contacted the AMC to report the situation. And the AMC & lender conducted their own investigation.

The outcome:

  • The appraiser who signed the report did not inspect the home. Yet signed the report using the ‘did inspect’ checkbox. He was removed from the AMC roster as an approved appraiser, for fraud. The signing appraiser also did not reveal ‘significant appraisal assistance’ in the report, which is a violation of USPAP.
  • The ‘someone’ who showed up at the homeowner’s house, gave the other appraiser’s name, and lied about his personal identity. He was given a warning. (This seems to be a mild slap on the wrist instead of stronger sanctions). Incredibly, this ‘someone’ happens to be a Certified appraiser, licensed for many years.

This may not be the end of the situation for these appraisers. Per the Dodd-Frank law and other regulations, whenever a lender discovers appraiser fraud, the lender is required to submit a complaint to the particular state appraiser regulatory agency. When that is done, the agency conducts its own investigation and has the power to impose strict sanctions against appraisers.

The point of this true story is pretty simple: conduct yourself as an appraiser professionally. Especially ethically. Follow USPAP. And don’t have ‘someone’ do your inspections unless the client is aware, the individual is correctly identified both to the homeowner and in the report. And you sign the report correctly, without lying.

By the way, for the curious among you, I won’t reveal the place this occurred or people involved due to potential reprisals against them. So please don’t bug me about this.

Dave Towne
Image credit flickr - david pacey
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on

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15 Responses

  1. Avatar diana says:

    Dave, going through a similar experience in maryland. had a guy set up the inspection. he shows at door and completes inspection. I get the report back and someone else inspected and signed. no mention of the person who inspected the house.

    we settled the refi…. i put in a complaint to the MD board in September. They dont start investigating until november… and as of last week still are investigating meanwhile these people are still in business!

  2. Avatar bill johnson says:

    The rules are the rules and they shouldn’t be broken, but why does much of the world operate on a different level compared to our profession? As you become a successful real estate agent that means you use your name but have a team of people that enter your MLS data, show property, meet the appraiser, etc. The appraisal system is flawed when many clients won’t allow trainees to sign the report, and many others won’t add licensed appraisers to their panel. The idea that I CAN’T send a 2 year trainee by themselves to take a picture of an installed CO detector is a joke. If I want to see my doctor I call someone else to set the appointment, someone checks me in, a nurse may check my weight, blood pressure, etc., and a different nurse may see me before the doctor finally comes in. If the doctor was the appraiser he would take my call to set the appointment, he would check me in, he would check my vitals, etc. The next time you go to the doctor ask him to include his license and his E&O insurance when you leave just to see his reaction. I don’t condone such behavior, but the current state of the industry is leading many to the dark side.

  3. Dave, if YOU have knowledge of this then you too have an ‘obligation’ to report this cheater to the state board. THIS is exactly how some are able to ‘afford’ to accept low fee work. They send trainees; and in many cases completely unlicensed individuals out to the do all the field work! The signing appraiser just sits back and write reports all day on properties he or she has never seen. This is ALSO one of the reasons why no one other than the signing appraiser is allowed to do the home inspection by many lenders and AMCs.

    Most appraisers have always had a live and let live attitude. I used to as well BUT NOT for people that are undermining our business. We hear a lot about “professionalism” these days, and how things like a college degree; dressing nicely, using lasers and tablets in the field; and stuffing your reports full of regression analyses and charts all add to “professionalism.”

    I think integrity is a far more important aspect of it. If an appraiser cannot be trusted to do what he contracted to do, how much credibility can his or her work have?

  4. Retired Retired says:

    Let’s search for something positive that came from this.  I’m not a fan of fraud but I have to admit he is one lucky appraiser.  That’s 10 less phone calls (over 1 order) to deal with each day, 10 fewer reverse auctions to compete in each month, and one less AMC to sue over nonpayment.  All in all I would say that appraiser had one of the best days a person can have.

  5. Avatar Retired Appraiser says:

    This is the way most appraisal chop shops operate

    Its the only way they handle the volume they do

  6. Avatar Serendipity.hh says:

    This has been going on forever. Wish that lenders and the state boards would crack down on it.  Hurts everyone except for the cheater, and btw, could be considered federal bank fraud.

    • It would be easy to stop if regulators actually wanted to. Issue a state appraiser ID card and start insisting all lenders tell their borrowers to ask the appraiser to see both their appraiser license and their picture ID or DL. …Appraisers in states that already issue wallet IDs should start doing this on their own. Show the homeowner even though you don’t have to! Start a trend.

      Then again if regulators stopped it they’d miss out on all those near automatic $5,000 fines …maybe even $10k

  7. Avatar Koma says:

    I’m sorry but am I missing something here. Why would one Certified appraiser sign another Certified appraiser’s signature stating that person inspected and completed the report? I mean I could see if it were a trainee or if it were complex assignment a licensed appraiser??

    Thanks in advance for the replies!

    • Avatar Ann says:

      I would suspect the “unidentified” Certified has some “other issues” hiding income, or disability claims pending, the saving grace here is was a Certified and not a $10 an hour guy off craig’s list with no training at all…

    • Mike Ford, CA AG; AGA,GAA, RAA, Realtor(r) Mike Ford, CA AG; AGA,GAA, RAA, Realtor(r) says:

      Koma, legitimately there could be many reasons. A commercial AMC (PCV Murcor) has its AG Comm’l division manager’s signature stamped on all appraisals that go out as supervisory. Clients hire them and expect their review and signature. They in turn sub contract the work out.

      Or; alternatively If I were (hypothetically) appraising an Intermodel Gateway Project for a large railway; and had never done one before I’d probably partner up with someone-even though I HAVE been involved in a lot of research concerning them. ( SCIG) . Being familiar with a variety of aspects wouldn’t necessarily give the competency required. On the other hand a trusted relationship may have been established by one appraiser with less project specific appraisal experience than another (possibly across the country) that could specialize in such projects. Click the link. Its how a good Republican like me became a union organizer.  Its all BNSF’s “fault”.

      If they hadn’t shown me how well big industry-big business can work with organized labor I’d STILL be looking for an effective national appraiser coalition of some kind. [Im only partially kidding. They & the unions actually WERE the ‘good guys’ in the whole deal whereas the “professional environmentalists” were nothing more than outright extortionists].

      While we like to THINK we know it all, the thing we know BEST in our hearts is that we do NOT know it all.

      • Avatar Koma says:

        Mike, Thanks for taking the time to reply. I understand the legit reasons (learned some new ones) it was the illegal ones I didn’t. Just now saw your earlier response above about trainees, unlicensed persons doing field work and an appraiser back at the office writing up the report. That’s just wrong and we do need to report this when it’s happening.

  8. Baggins again Baggins again says:

    Amc’s act all surprised by catching this runner deal happening, when it is the amc’s themselves whom as an industry wide group, promote that activity, with under 1 wk turn times, and selection by fee approaches. The amc’s were non qualified from the start, despite their instant proliferation in this industry, which is why they have no clue about grading for repurchase risk, and only grade for fee and tat. If we were to look at the parallels, every single amc worker would be a skippy or a runner. None of them are licensed, and even if they were, they’re unaccountable in their amc blanket safety position. The only person at an amc whom is remotely accountable, is the owner and required senior appraiser. I remember when I started something like 15 years ago, our lender connections would not cut the orders off until like the 6 week out period. Everything rolled in at the 400/450 scale, no fees, no xml, etc, etc, 15 years ago. People used our services and trusted us, because we were trust worthy. The problem w/ mb direct, was they were staunch advocates of the commission. The only difference now is that advocacy shifted from one parties commission, to another. Nobody is willing to risk their personal position to protect appraiser independence or support best practices. Lenders, amc’s, and mb’s impatient attitudes continue to drive this train wreck on down the line. Betcha if there was some sort of picture verification process followed for every single origination order out there, half of the ‘best performing’ appraisers through a wide variety of assignment outlets, would fall off overnight.

  9. Mike Ford Mike Ford says:

    “Knowing” how this is done and being able to prove it sufficiently for a specific complaint are two different things. An appraiser that foolishly shares this information over a cup of coffee or at appraisal class breaks is not going to sign an affidavit admitting to it.

    Unless its a case like a female San Francisco certified appraiser sending out a MALE to do her field work and then pissing me off personally enough to make it worth my while to document the violation and pin it down; we usually just cant do much about this EXCEPT to warn our ‘peers’ to knock it off if they are doing it!

    Also, when the reviewer DOES catch this and gives you a way out to FIX it by reinspecting the property personally, TAKE advantage of the offer-don’t keep denying it after it is proven and becomes a state complaint! Better yet-don’t cheat in the first place!

  10. Avatar Brad Lipshaw says:

    I know two appraiser’s that never inspect their properties and sign while working a full time on site review job. I reported to Florida and Texas and Florida requested me to get his fraudulently signed reports or they would do nothing. Thats not possible so Florida perpetuates fraud once again. Texas at least sent me a post card that they would investigate. We have the obligation to blow whistles that nobody wants to hear.

    • Amazing, isn’t it? Bureaucratic form and format are more important than using common sense to keep our profession free of dishonesty.

      We should never promote frivolous complaints, but when something as serious as this comes up its a pretty big deal to me. This isn’t a subjective non compliance allegation – its basic integrity and states should prioritize those complaints over all others.


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Appraiser Removed from AMC Panel due to Fraud

by Dave Towne time to read: 2 min