Lender Makes Good on AppraiserLoft Bad Debt
The argument is unsettled to what degree lenders are responsible for the agents they hire to administrate valuation services- appraisal management companies (AMCs). The case of the AMC AppraiserLoft kicked off a heated debate when it closed its doors last year, leaving an estimated $3 million or more in unpaid appraiser fees. In the meantime, one major lender, Metlife Bank, made good on the bad debt created when its agent, AppraiserLoft, shut its doors. In the wake of the shutdown, Working RE reported that many appraisers believe lenders are responsible under federal law for bad debt left by their agents (AMC Bad Debt-Lenders Responsible?)). A follow-up story reported some appraisers actively pursuing the banks that hired AppraiserLoft in an effort to recover lost fees (AMC Success Collecting AMC Debt from Lender ). In the wake of this mess, MetLife Bank stepped up to pay appraisers for unpaid work completed for AppraiserLoft. Specifically, any appraiser who completed work for AppraiserLoft on behalf of MetLife and was left with an unpaid invoice, was given the chance to collect the fees owed. Sue Potteiger, Chief Appraiser at MetLife Bank, told Working RE, “We did this because we made the decision to work with AppraiserLoft. We did our due diligence on this vendor and engaged them to provide appraisal reports to mortgage brokers that we directed to them.”
According to Potteiger, “It’s not the appraiser’s fault that AppraiserLoft didn’t pay them. If an appraiser did the work and we made a decision based on the appraisal provided- the appraiser should be paid. We did pay AppraiserLoft all monies we were billed for. We paid the appraisers the money they would have been paid. These same appraisers are vendors that we might be working directly with on our fee panel. It’s important to us to maintain an open and respectful relationship with our appraisers,” Potteiger said. Potteiger explained that MetLife’s stance is a product of a pretty straight forward philosophy, “Treat people with respect and keep your word.” The offer to pay unpaid invoices ended March 30, 2012. How other lenders handle this issue, only time will tell. – by Isaac Peck, Assistant Editor
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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.
How’s Business? Survey Results
Working RE/OREPconducted a How’s Business? survey in early April with over 1,000 responses in the first few days. The results show 51% of appraisers reporting revenues increasing in the first quarter this year over the same period last year; 26% report the same revenue or less; 23% saw a decline in revenue greater than 20% this year over last. Additionally, 52% of appraisers taking the survey report they are more profitable this year than the same period last year, 48% say they are less profitable. Despite many obstacles, 80% of appraisers say they plan to continue appraising, with 20% saying they plan to retire from the profession. To view the entire results, visit WorkingRE.com and click “How’s Business Survey Results” under the Surveys tab.
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 Improving FHA Appraising under the Resources tab. “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 Recorded Webinars under the Resources tab.