Unsolicited Appraisal Request
…an unsolicited appraisal request instructing payment be collected at the door…
Well who said 2020 would be a nice calm year for appraisers? VaCAP has been receiving messages from appraisers about some of the crazy dumb stuff lenders and amcs are doing. What is scary is the things we are hearing are very reminiscent of 12-15 years ago.
A long time VaCAP member forwarded an appraisal request to us he received via Mercury Network. All was good with the order, turn time, fee; all good except for one little issue, payment was to be collected at the door from the borrower! We remember those days. Anyone still have uncollected checks? Every appraiser who has been breathing over the past 10-12 years knows this request is a violation of Virginia AMC Regulations which was taken directly from Title XI of FIRREA. It does not matter if it is a lender or amc; this request is a violation of state and federal law. Who is overseeing the compliance of these companies?
Another appraiser reached out about an appraisal request from a company he is not signed up with. No real issue here, appraisers get unsolicited requests all the time. Well this appraisal request was a bit different. The amc who sent the blind request also sent a username and password in the same email. Now it may have been well intentioned, but seriously how dangerous is this to the appraiser? What about the borrower? Is the borrower getting the service he or she paid for and deserves? How presumptuous of the amc for creating an account for an appraiser. Is this really any different than what Wells Fargo did when they opened accounts in customers name without permission?
And then there was the appraiser who received a different blind solicitation from an amc she is not signed up with. This email, perhaps more professional than some others:
“Hello – We have an assignment in your identified market and are inquiring into your availability to complete as well as meeting the requisite knowledge, experience, property type / geographic competency and the time frame you would anticipate needing to complete this assignment for us. Please respond to this email with your fee and turn time. Your quote must be in writing. Verbal quotes will not be accepted.“
The amc graciously provided a link to sign up and another link to obtain the mandatory background check. They only want her fee and turn time. Not a word concerning her qualifications.
Most of us are very busy now and many will just ignore these requests. Please do not. Please take the time to respond in a professional manner that you are a professional and their actions are questionable at best. Do not be afraid to copy the lender, agents and borrowers. Many are unaware of how appraisers are being selected. The borrowers deserve a quality appraisal by a competent experienced licensed professional appraiser. After all, that is what they paid for. Don’t think for one minute agents will sit back and let their deals go south. Most lenders will bend over backwards to maintain a positive relationship with agents and most agents have more than one lender relationship.
Now think for a moment how supply and demand works. When demand is low and supply is plentiful, prices go down. When supply is low and demand is high, prices go up. This is how a free market works. Translate this specifically to the appraisal profession: when appraisers are slow, our professional service is not in demand. When appraisers are busy, our professional service is in demand.
Now for just a moment, let’s talk about those dirty words call “price fixing.” We all know price fixing is illegal and we all could get in trouble for it. In a free market situation, supply and demand will fluctuate. This is not price fixing; it is a free market at work. There is nothing illegal, unethical or immoral with appraisers adjusting their pricing in a free market based on supply and demand.
One appraiser shared on Facebook how Uber and Lyft charge “surge pricing” during peak travel times of the day. When traveling in the Express lanes along I-95 in Northern Virginia, are we not charged more during peak times? What about I-895 connecting South Richmond to the East Henrico? Does it not cost more during rush hour? Does it not cost less for that 5:00 AM flight and more for the 9:00 AM flight?
Just today, many appraiser received notification from loan officers, despite very low interest rates, lenders are raising their rates. Price fixing, no; a free market reacting to supply and demand, YES! Don’t be afraid to run your business as you see fit. Don’t be afraid to charge your worth. If clients want your professional service, they will conform to your fees and policies.
- We the People… - April 9, 2023
- Federal Valuation Agency Impact on Appraisers & the Public - July 22, 2022
- Is Georgia Going Rogue? - June 13, 2022
I SAY DO NOT RESPOND
Unsolicited Requests are like Robocalls
Mercury Network has become a TOILET BOWL full of bad AMCs
I agree, unless you’re set up for unsolicited requests, be careful. People who are not familiar with the process are also more likely to become irate when something happens that they don’t understand. Unless you’re prepared for these requests, proceed with caution.
Alternatively, seek out firms that do these types of requests and learn.
I completely disagree we should ignore them. As the article states respond professionally and ask to be removed from their list. Like Robocalls, if you don’t stop them, they will only continue.
I miss the days of collecting at the door. Always had cash around and no 1099s to claim.
It’s been a while since I read FIRREA. I don’t recall such a prohibition. I DO know that FNMA will not buy a loan where the fee has been paid by the borrower to the appraiser. It’s why I am so careful to explain to clients on private deals that it CANNOT later be used for any GSE loan
I’m glad VaCAP is reminding appraisers in their state of the additional prohibitions. What would be MORE helpful is an effort to change that legislation so that we CAN collect at the door again. The original logic was to lock in an appraisal to a specific lender so other lenders couldn’t steal deals without paying for new appraisals. Pure and simple self-interest. FNMA later came up with the fairytale that it compromises appraiser independence.
In practice, the 3rd party deferred payment has been MORE prone to abuse of independence since AMCs use it as a lever to extort favorable modifications to appraisals under the guise of ‘necessary revisions’.
Its truly amazing how originally GOOD legislation like FIRREA has been allowed to become so bastardized with subtle changes over the years that the public trust is no longer served or protected.
The very organization charged to develop and maintain standards (USPAP) TAF, is now one of the biggest causes of diminished standards, requirements, and appraisal credibility. THEIR corporate self-interests conflict with their original mandate. THEY developed remedial education programs for state enforcers. Then they caved to AARO and started teaching investigator programs that tell investigators they don’t have to comply with USPAP themselves!
Apparently, there is no sense directly competing with AI education providers if no one takes the courses. Enter their regulatory investigative courses. Designed specifically to promote a prosecutorial approach to appraiser review, they now have a captive audience that states gladly keep feeding them through bogus complaint ‘findings’.
Hopefully, GAO will in response to Congress Member Waters Committee letter identify all these current failures of FIRREA, and redo it like it was originally intended. Back when it worked. We already HAVE USPAP. We don’t need an overpaid private corporation to needlessly change it every two years. Leave that up to the existing recognized appraisal professional organizations, unions and state coalitions. Go back to the Departure Provision and tie it to SOW like it used to be. Don’t let reduced SOW sidestep any principle or standard anyone chooses to ignore on any given day anymore.
Put USPAP compliance under one single federal agency such as ASC with peer groups performing the SR3/4 reviews for compliance, with a SINGLE SET of standards instead of the current Heinz-57 FLavors Enforcers Buffet that allows broke bureaus like California’s BREA; or confused regulators like those in other states that think USPAP doesn’t apply to them.
One of my lender/clients PREFERS that I collect at the door! In fact, because of their policy they are my ONLY lender/client!
I forgot to add, my lender/client also orders through Mercury so I don’t have to put up with an AMC!
i collect at the door for several of my clients. I’m don’t extend credit. I’m going to start quoting fees to AMCs that include a 45 day credit charge. Like this. $650 for COD. $700 for billing.
Good on you. I always used an engagement letter at the request from a client and IF I received payment on the site, I issued a receipt, in it I named my client.
Don’t worry about state investigators being broke much longer.
Appraisal Subcommittee; Notice of Adoption of Grants Handbook
Yup, worth a read.
It’s a good thing the amc’s don’t have to comply with something like 11.4 or 11.5.
Are you trying to bore me to death?
That’s the best summary of the situation I have seen. It makes me want to join AGA.
Don Martin CA
I have no problem adjusting my fees for demand. My email is full of rush requests. My phone is ringing off the hook. I just got rush assignment with $1200 fee. It was offered at $320. I told them $1200 and they took it. Probably will earn my money trying to collect. Lol
What’s the big deal if an appraiser collects $500 at the door? It’s not like 2003-2007 when countrywide was offering NINJA loans! Don’t think the little appraiser collecting peanuts at the door is going to crash the Global economy
None of it makes sense because the fee for the borrowing consumer remains generally constant
When appraisers provide a lower priced product to an amc, the consumer does not save a dime.
Supply and demand. That’s not what’s happening here. That is not the whole picture.