Appraiser Blacklisting: Fighting Back
by Cary Barker, WRE Assistant Editor
Blacklisting can do damage to your reputation, your bottom line and in some cases, your health- especially when you can’t get answers or help. Here’s how one appraiser, banned from the approved list of a large national lender, did get answers and ultimately, satisfaction- but not without a fight.
Michael Read, a Washington State appraiser, learned he was on the ‘Exclusionary
List' of a large national lender after submitting an appraisal to a mortgage
broker in October 2006.
“Eventually, I found the right person in the Quality Control Department of the
Lender’s Western Region Office in Los Angles, Calif. I sent her a letter asking
for an explanation and 40 days later she finally got back to me. She told me I
failed to mention that a house I appraised in 2004 was a Bed and Breakfast,”
Read said.
“I wrote her back saying that to my knowledge it was not a B&B. That at the time of the appraisal, there was no indication that the property was a B&B. I told her I did not make an error and that I should not be blacklisted. She told me to take it up with the legal department,” said Read.
Read, appraising 21 years, learned he had been on that blacklist for over two years and says there is no telling how much work he lost. “It’s amazing that a bank can blacklist you without explanation or notification, so that you can at least have the opportunity to set the record straight. I’m sure I was skipped over for work many, many times in those two years and never knew it.”
He contacted the Washington State Department of Financial Institutions (DFI) about his problem and asked to file a complaint against the lender. The DFI doesn’t have jurisdiction in the matter and directed Read to the Office of Thrift Supervision (OTS), a Department of the Treasury. The OTS is: “The primary federal regulator of federally-chartered and state-chartered savings associations, their subsidiaries, and their registered savings and loan holding companies.”
The OTS referred Read to their federal regulatory ombudsperson. The ombudsperson indicated they would contact the bank on his behalf. (You’ll find a list of the OTS regional offices as well as the national ombudsman online at www.workingre.com, click “OTS Regional Offices” at bottom of page.)
In the meantime, Read found the email address of the bank’s Chief Executive Officer while perusing their Web site. According to Read, this got the ball rolling.
“At first, no one paid attention to my problem,” said Read. “After emailing the CEO, an assistant got back right away saying they would look into it. It may be that the letter from the OTS arrived at the same time but this is when I finally got results.”
In late January 2007, three months after first learning he was blacklisted, Read received a letter reinstating him on the bank’s approved list, but not without an admonishment to do better and 'pay attention to the red flags.'
“There were no red flags,” said Read. “I was on the Exclusionary List for over two years without knowing anything about it. I was accused, convicted and punished without ever facing my accuser. What country am I living in? Wasn’t this unconstitutional? I believe lenders have the right to maintain a list of approved appraisers and to eliminate ones who create problems. But there should be a requirement that they notify appraisers and give them the chance to rebut. Apparently, there is no such requirement. The fact is that banks can abuse appraisers any way they want. That’s the bottom line.”
In an ironic twist, Read learned later that the appraisal that got him blacklisted was never used and the property never refinanced; the bank in question had the first mortgage on the property the entire time.
Another Fighter
Lisa Michels discovered she had been blacklisted not because she had made any errors on a past appraisal but because the lender was annoyed with her employer. "I expressed my feelings (to a representative from the lending company) about being removed from an approved list for no particular reason, and speculated on the phone as to how an attorney might view it. Two days after that, I was back on the approved list," she said.
Michels believes the best way to resolve this issue is to go through the original client (the person who ordered the appraisal) and ask them to get you through to the right reviewer, underwriter or manager.