FNC Data Mining Lawsuit Settles Quietly
According to the attorneys bringing suit on behalf of a group of appraisers against FNC/AppraisalPort for alleged false advertising and data mining, the suit has settled quietly and its terms prohibit them from comment. As you may recall, a group of appraisers accused FNC of “intentional misrepresentation, negligent misrepresentation, conversion, misappropriation, breach of bailment and breach of implied contract.” Specifically, they claim FNC built a national database of information about properties using appraisers’ information and now competes with them at their own expense. FNC denied the claim in court and in a Working RE story, Federal Suit Alleges Misuse of Appraisers’ Data by FNC, Angela Atkins, FNC Public Relations Manager, told WRE, “FNC was very disappointed and disturbed to hear of this complaint. It tries to attack FNC’s core commitment of protecting the information we transmit between appraiser and lender. As a result, we believe it is entirely without merit and will defend it vigorously” (WorkingRE; Volume 17). In February of this year, the United State Court of Appeals Fifth Circuit, reversing a lower court decision, allowed the lawsuit to continue. Recently, the suit settled.
The following detail of allegations is excerpted from the February 24, 2011 Court’s Opinion allowing the lawsuit to continue: “The plaintiffs in this case have prudential standing primarily because of the zero-sum competitive relationship that exists between them and FNC in the field of real-estate-valuation services. Lenders who use the National Collateral Database would otherwise use the plaintiffs’ appraisal services, FNC was able to create the National Collateral Database only because it stole the plaintiffs’ work product, and FNC’s taking of the plaintiffs’ work product was made possible by the false advertisements FNC ran touting the confidentiality of AppraisalPort. But for the false advertisements FNC targeted at the plaintiffs, the National Collateral Database would not have been able to compete effectively with the plaintiffs’ appraisals. It is the inextricable linkage between FNC’s false advertisements and the plaintiffs’ diminished opportunity to sell appraisals that brings this case within the ambit of §43(a).”
Neil Olson, FNC Chief Legal Officer said, “FNC is delighted that the lawsuit has been resolved and excited to continue to serve our clients to the best of our abilities. We are unable to comment on the terms of the suit as they remain confidential and we respect those terms for both parties involved.”
The firm representing the appraisers is Marzouk & Parry, located in Washington, D.C. To read the February 2011 Court’s Opinion in its entirety, visit WorkingRE.com; Sidebars: FNC Lawsuit Settles.
Editor’s Note: This story first published in Working RE’s email News Edition
Insurance: How Saving Money Can Really Cost You
If you are considering letting your errors and omissions (E&O) insurance policy lapse (not renewing or canceling) to cut expenses or thinking about switching to a company that does not provide “prior acts” coverage for your past appraisals just to save money, you should think again. Appraisers are being sued in record numbers today- even the careful ones. No matter the merit, appraisers have to spend time and resources defending themselves- even if they did nothing wrong. As most claims involving appraisers take several years to surface, letting your Claims Made insurance policy lapse, cancelling midterm or willingly giving up your prior acts coverage to save a few dollars could be very costly indeed should a claim arise from the past and you have no coverage. Call your insurance agent to find out what is really at stake. For more on E&O insurance issues, see Insurance: Insight and Advice from the Inside, an interview with OREP.org Senior Broker David Brauner, who has been point of sale for appraiser E&O insurance for 20 years.
This blog is an information exchange by and for appraisers about working with the various AMCs- read the good but mostly the bad and ugly about which AMCs to avoid, such as the following: “Boy, are you right! I had to chase (AMC name removed for publication) for months for a check. We have friends that had to chase them for 120 days for $3,000+. They are supposed to be run by an ‘ethical’ appraiser but I think not! I did an appraisal for them, busted by rear to get it in in their turn time and then I got an email back saying they had cancelled it and utilized one of the appraisers in the area that does most of their work. I never got a cancellation email. So, I was out two day’s work and $375. Nice!” Learn what you need to know about working with AMCs at this blog. Visit WorkingRE.com and under Blogs click AMC Rater.
Customary and Reasonable Fees- Still Breathin’
The issue of Customary and Reasonable Fees may not be dead. Staff from the Federal Reserve Board recently requested survey results from the OREP.org/Working RE Customary and Reasonable Fee Survey, with over 16,500 appraisers participating. Why? Because customary and reasonable fees and other issues related to the Dodd-Frank Financial Reform Legislation are not settled, according to the Federal Reserve, who is tasked with implementing the law- sort of. The Fed was tasked with implementing Dodd-Frank initially. Its Interim Final Rule was released in 2010 but instead of finding a way to enforce the intent of the C&R fee provision in the Legislation, it rendered it impotent by way of convoluted logic that permits the status quo- appraisals to the lowest bidder. As a result, the issue of fair fees was dead in the minds of most appraisers. But maybe not quite.
The Consumer Financial Protection Bureau (CFPB) took over from the Fed in July 2011- well, not exactly. According to a Fed staffer (Fed staff are not permitted to be quoted by name), “As explained in the testimony of Division Director Sandy Braunstein, in the last paragraph of the section on appraisal independence (p. 12-15), authority for issuing permanent rules to revise the Interim Final Rule is shared by the Board with several agencies, including the CFPB. The Board and the other agencies are also required under Title XIV of the Dodd-Frank Act to issue several other rules related to appraisals which must be finalized by January 2013. Thus, we are focused on those rulemakings but are also actively assessing the Interim Final Rule and will consider whether changes should be made in issuing permanent rules in the future.” Find results at WorkingRE.com, Surveys. Find the Testimony by FED Division Director Sandy Braunstein at WorkingRE.com, Sidebar Info, FED Director Testimony (pages 12-15).
Editor’s Note: This story first published in Working RE’s email News Edition
Do you Need General Liability Insurance?
Do you need general liability insurance? You just might. Business Owner’s/General Liability Policy has been compared to a homeowner’s policy for your business. Coverage includes but is not limited to Property Damage to others, Bodily Injury, Business Interruption and Loss of Income coverage, Personal Property Coverage (computers, client records, buildings) and employee dishonesty. Inspectors, appraisers and real estate agents/brokers need this coverage. Minimum premium is $500. Workers Comp also available. Call OREP.org for details and a free quote (888) 347-5273 or email: email@example.com with your request.
Fannie Mae: Non-Arm’s Length Red Flags
This from Kim Ellison, on behalf of Bill Brewster, Director, Mortgage Fraud Program, Fannie Mae, presented at Valuation 2010 late last year.
- Purchaser has previous or current ownership of the subject property.
- Purchaser address matches the borrower’s address.
- Purchaser’s name is similar to the borrower’s.
- Purchaser employment address matches the borrower’s employment address.
Homeowner Loan Reduction
- Borrower has had a strong payment history and no clear reason for default.
- Borrower requests a short sale before exploring workout options.
- The reason for default given for loss mitigation is not consistent with reasons provided to collections.
- A bid is received at the short sale price immediately.
- Cash for “repairs” is returned to the buyer at closing.
- The proposed buyer has commonalities with the borrower (e.g.,last name, address, etc.).
- The buyer and real estate agent are the same person.
FHA Appraising Easier, More Efficient
FHA work is booming. Here’s an opportunity to make your FHA appraising faster and more efficient. The FHA Appraiser Inspection Checklist, Checklist Instructions and eBook is designed to get you up to speed and more efficient at FHA appraising. The Checklist serves as a field guide for completing your reports. The Instructions explain how to complete the two-page checklist line by line. The eBook saves you time and money by summarizing and organizing the material you need to know. Author/appraiser Lore DeAstra says, “We reviewed more than 450 pages of HUD materials and spoke with several HUD officials to compile the FHA Appraiser Inspection Form, course materials, and eBook. It will save you time and money.” The guide is updated with the following: formatting updates for improved ease of use: more concise information in an easy-to-follow eBook searchable by topic; web links to topics for easy access; symbols and pictures included by topic for at-a-glance comprehension to FHA Checklist; FAQ from appraisers and lenders by topic with detailed index by page; over 10 new ways to access information and contact FHA to check competencies and get help fast! For more, see the inside back cover or go to WorkingRE.com and click FHA Checklist, Instructions and eBook. “Differentiating yourself from others improves your business and marketing efforts,” says author Lore DeAstra. “These revised materials will help you obtain additional avenues of income pertaining to your FHA expertise now and into the future.” OREP insureds enjoy a discount.
New 7 Hour USPAP CE Online: Convenient, Affordable
Enjoy an OREP/Working RE discount on McKissock’s new 7 Hour USPAP online continuing education course, approved in most states. Taking this mandatory continuing education coursework is now affordable and convenient with this new online course. Visit WorkingRE.com and click USPAP CE at a Discount under the Resources tab to learn more.
Filing C&R Fee Complaints
This from the Appraisal Subcommittee (ASC.gov): The appropriate agency to receive your concern about a creditor’s compliance with the Truth in Lending Act (TILA), including the creditor or the creditor’s agent paying an appraiser a customary and responsible fee, is the agency that enforces TILA for the creditor. If the agent or appraisal management company (AMC) is affiliated with a federally-regulated creditor, the appropriate agency to receive complaints against the AMC is the affiliated creditor’s federal regulator. If the agent (or AMC) is not affiliated with a federally-regulated creditor, the appropriate agency to receive the complaint is the Federal Trade Commission. There are two websites that you can use to find the federal regulator for a creditor: Federal Reserve System – National Information Center website: http://www.ffiec.gov/nicpubweb/nicweb/nichome.aspx ; and FDIC website at the “Bank Find” webpage: http://www2.fdic.gov/idasp/main_bankfind.asp . Questions regarding the appropriate interpretation of the Truth in Lending Act, including those on customary and reasonable fees, should be directed to the Federal Reserve Board at http://www.federalreserve.gov/feedback.cfm.
New Webinar Series: Information You Can Use from Industry Leaders
OREP/Working RE Magazine introduces a new webinar series on important industry topics, presented in webinar format by industry leaders. The topics are useful, the prices affordable. OREP members/Working RE paying subscribers always enjoy reduced fees. Many appraisers are busy these days, so prerecorded webinars also are available on demand for your convenience. New topics are added regularly. See below for the first offerings. For the current schedule, including dates, times and pricing, please visit WorkingRE.com and click Webinars under the Resources tab.
Mobile Appraising: Saving Time and Money
Presenter: Dustin Harris, “The Appraiser Coach”
Learn the techniques and technology to make your business profitable and competitive. If you think you’ve heard it all before, you haven’t. Dustin does it successfully and enjoys showing others how.
Professional Appraiser Series: Other than Lender Work
Presenter Andy Anderson
Long-time appraiser and industry sage Andy Anderson (see his story Customary and Reasonable Assignments), doesn’t rely on lender work. In this webinar, he shares his experience on how to diversify, grow and forge your own kind of independence-financial.
Appraiser Independence: Know Your Rights
Presenter Richard Hagar, SRA
Nationally recognized author, instructor and fraud expert, appraiser Richard Hagar, SRA puts a spotlight on appraiser rights and responsibilities. Learn how to assert your rights and protect your practice with this valuable webinar.
Maximizing AMC Orders and Income
Presenter: Bryan Knowlton, author the 2012 AMC Directory.
“We learned so much on Tuesday, we decided to come back today and bring our office manager.” – Lu Waara
Appraiser Bryan Knowlton is busy is with well-paying AMC work. How does it do it? He knows the best AMCs to work for and the techniques for being profitable. Learn proven strategies for maximizing orders and income when working with AMCs.