Appraiser Removed from AMC Panel due to 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 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.