REALTOR Mag - The Trouble With the HVCC

Here is the long awaited REALTOR® Magazine article about the Home Valuation Code of Conduct (HVCC), HAVOC. Blanche Evans, Stacy Moncrieff and I spent quite a bit of time discussing the issue, including the initial investigation, the companies under investigation, appraisal practices, appraisal standards, enforcement and the effects of the HAVOC on the appraisal profession and real estate markets. In an effort make sure all points of view were represented, I furnished names and contact information for several parties in favor of the agreement, including several folks involved with Appraisal Management Companies (AMC).

Not only did Blanche and Stacy collaborate to produce a balanced and informative article, the story includes the best HVCC/HAVOC graphic encountered by Appraiser Active. We might just award a gold star or seal for that one.

It's appropriate for the article, "The Trouble With the HVCC" to start with a quip from Jonathan Miller:

"You can't make this up," New York appraiser Jonathan Miller riffed in his entertaining blog, Matrix, back in June.

Miller was recounting the frustration of a real estate salesperson who was trying to refinance her own New York apartment with her current lender. According to Miller's telling, the out-of-town appraiser walked into the apartment, threw his hands in the air, and asked "How am I supposed to appraise this thing?"

Of course, the favorite quote is from yours truly:

"The HVCC sets up AMCs as the guardians of appraiser independence, and isn't it ironic that the investigation that prompted the rules centered on an AMC allegedly manipulating the system to please its customer?"

Later in the article comes this gem:

For the largest lenders, AMCs are simply the way business is done today. "When you're ordering thousands of appraisals every single day, the risk to you is extraordinary," says Jeff Schurman, executive director of the Title/Appraisal Vendor Management Association in Pittsburgh, which represents a variety of settlement service vendors, including large AMCs. "Would it make sense to hand those off to thousands of [independent] appraisers?"

To which Appraiser Active responds: "Yes, it makes sense to "hand off" those to thousands of [independent] appraisers. Unlike Appraisal Management Companies, the appraisers are licensed and certified by an agency of government and subject national standards; recognized by every state and territory of the United States. What appraisal standards must the Appraisal Management Companies follow?" Which agency of government regulates their involvement in brokering valuation services?

There's much more. Read the whole thing right HERE.

UPDATE: Jonathan Miller provides his take on MATRIX.

My Hometown Paper Discovers the HAVOC of the HVCC

For the past last four days, I've been attending the Florida Association of REALTORS Annual Convention and Trade Show. From the moment I walked into the building, the topic foremost on the minds of the friends and colleagues encountered was the Home Valuation Code of Conduct - HAVOC.

In the past week the story has been picked up by the Wall Street Journal and the New York Times. Today, on the front page of the Business Section of the August 23, 2009 St. Petersburg Times, James Thorner writes about the HAVOC resulting from the Home Valuation Code of Conduct (HVCC).

New Home Valuation Code of Conduct cures some ills, creates new ones

First, Jim offers up an example of a an experience similar to hundreds of others reported in papers and blogs across the country:

Builder Charlie Hannah thought he was being generous when he agreed to sell a new 5,000-square-foot home for $1.15 million in the Tree Tops neighborhood near Tampa's Westchase. But the appraiser returned an appraised value of $1 million on the lakeside house in June. Two months later, the sale remains in limbo and Hannah remains indignant.

Four other homes Hannah built in the same neighborhood recently sold for much more per square foot than the $1.15 million home. But the appraiser found a comparable home sale miles away in Odessa to justify what Hannah considers to be a low-ball valuation.

Although I live and work in the Tampa Bay Area of Florida, my appraisal practice is limited to Pinellas County. The example cited is from across the bay in Hillsborough County. It's not possible for me to comment with any credibility about the allegations made by Charlie Hannah.

However, Thorner goes on to describe a couple of situations of which I have firsthand knowledge:

Since the new rules took effect, the law of unintended consequences has upended real estate deals. St. Petersburg Realtor Nancy Riley blames sloppy appraisals. She had a buyer for a sixth floor Feather Sound condo overlooking the water and golf course. Both parties agreed to the $200,000 purchase price.

But the lender, using an appraisal management company, got an out-of-county appraiser. The disappointed buyer and seller learned the condo appraised at only $157,000. As two of his comps, the appraiser used a unit in a former assisted living facility and a single story condo without a view.

Riley tried to challenge the appraiser's findings — which included wrong photos attached to the wrong properties — but got a cold shoulder from the bank. She's still trying to salvage the deal."I sent them two pages of things wrong with the appraisal. They refused to listen," Riley said. "I got one or two snippy responses."

Along with this one:

Mortgage refinancing — the centerpiece of the government's antiforeclosure efforts - has also suffered. Gregoire noted a case involving a house in upscale Tierra Verde. The home owner sought a reverse mortgage to pull cash from the home. Taking into account the recent depreciation, the home owner estimated the 2,000-square-foot home at $400,000. The initial quick-hit appraisal, using a $10 computer-generated valuation that isn't as good at distinguishing some of the nuances of real estate valuations like the differences between nearby neighborhoods, delivered a market price of $252,000.

When a real appraiser went to work on the house after driving up from Fort Myers, he, too, concluded the house was worth $252,000. Gregoire assumes the appraiser shoe-horned in comparable sales to make his numbers match the computer-generated price.

"That happens with appraisers who lack geographic confidence,'' Gregoire said. "I've been doing appraisals 30 years, but I don't go outside of Pinellas County. The most important thing is to know neighborhoods and submarkets.''

NOTE: The term I used in the interview was "GEOGRAPHIC COMPETENCE", but you all should get the drift.

Copies of the appraisal reports described in the two examples above are part of ever increasing pile of evidence sitting on the floor within two feet of my desk. The Feather Sound "appraisal" is a jewel. To some readers, it might look fine; the Comparable Sales are all relatively recent, two are less than 1/4 mile from the subject and the third is only 3/4 of a mile away. Unfortunately, for the seller and the buyer, only one of the Comparable Sales is an example of an acceptable substitute property and could could come close to being considered competitive with the subject.

The "appraiser" includes quite a bit of boilerplate claiming an oversupply of listings and declining prices in the development. Although a case could be made there is an imbalance between supply and demand for all housing in the Feather Sound area, the case is less supportable when condominiums only are considered in the analysis. As of the effective date of the appraisal, according to the Suncoast Multiple Listing Service, there were 89 active listings in Feather Sound. Eighteen of these (20%) are either under contract or pending sale. In the twelve months prior to the effective date of the appraisal, there have been 56 sales in Feather Sound reported by the Suncoast Multiple Listing Service. Both the average time and median time on the market for sold listings is close to three months; 96 days and 92 days respectively. Absorption rates have increased from about four units a month over the last half of 2008 and first quarter of 2009 to about 7 units a month in the second quarter of 2009.

If the analysis is limited to condominium parcels only, as of the effective date of the appraisal, the Suncoast Multiple Listing Service reports 56 active listings in Feather Sound. Fourteen of these (25%) are either under contract or pending sale. In the twelve months prior to the effective date of the appraisal there have been 30 sales of Feather Sound condominium units reported by the Suncoast Multiple Listing Service. Both the average time and median time on the market for sold condominium units is close to three months; 100 days and 80 days respectively. Absorption rates have increased from about 2 units per month over the last half of 2008 and first quarter of 2009 to nearly 4 units (3.7) units per month in the second quarter of 2009.

Although the appraisal report indicated prices are in decline, analysis of the sales data did not support such a conclusion, at least for the two quarters prior to the effective date of the appraisal. If all residential Feather Sound sales reported by the Suncoast Multiple Listing Service are considered, the median sales price over the last three months is about $155,000. This compares with a median price of $120,000 for the first quarter of 2009 and about $167,750 for the last half of 2008.

Although the market analysis was contrived and two of the pictures of Comparable Sales were of units that did not match the address or the description of the sales in the Sales Comparison Analysis, the bank loved the appraisal report!

The Tierra Verde Appraisal was just as "good" as the Feather Sound Appraisal Report. It was completed by an appraiser after being assigned by RELS, the AMC often associated with Wells Fargo Bank, N.A. , the same institution accused of rigging the appraisal process in a scheme to boost profits at the expense of homeowners and independent appraisers.

RELS has the audacity to use this on their website:

"Quality appraisals — and rapid turn times"

Right!

Florida Association of Realtors Convention

Appraiser Active will be out of the office for the next few days. We're heading to Orlando for the Florida Association of Realtors Annual Convention and Trade Show. FAR committees and councils will be meeting, as will the FAR Board of Directors.

There will be discussion of the Home Valuation Code of Conduct and the effort to introduce and pass legislation to regulate Appraisal Management Companies in Florida.

On Friday, I will be attending the meeting of the Florida Quality Council and making a presentation about the Home Valuation Code of Conduct.

It would be nice to see some of you at either one of the meetings. Make sure you come up to say HI!

Frank

NYT - Lotsa Love for AMCs and the HVCC - NOT!

Yesterday it was the Wall Street Journal. Today, it's the New York Times! It's nice to see all the love going to the Home Valuation Code of Conduct (HVCC) and Appraisal Management Companies. In this article the NYT even throws a dig in at Andrew Cuomo.

In Appraisal Shift, Lenders Gain Power and Critics

Mike Kennedy, a real estate appraiser in Monroe, N.Y., was examining a suburban house a few years ago when he discovered five feet of water in the basement. The mortgage broker arranging the owner’s refinancing asked him to pretend it was not there.

Kudos, Mike! By the way, what's a basement?

The Home Valuation Code of Conduct is setting off a bitter battle. Mortgage brokers, lenders, real estate agents, regulators and appraisers are all arguing over whether an effort to fix one problem has created many new ones.

The agents, maintaining that the changes are effectively blocking home sales by encouraging the use of inexperienced appraisers, are asking Washington to suspend the code until 2011. For their part, appraisers acknowledge that the change may have been well intentioned but contend that it has no teeth and is undermining the economics of their profession.

There's more!

Appraisal management companies and lenders say the agents’ charges are not true. “We’re an easy scapegoat,” said Donald Blanchard, chief compliance officer of Lender Processing Services Inc., which works with 20,000 appraisers. “We’ve yet to see any quantifiable proof as to the problems that management companies are supposedly causing.”

The real source of trouble for independent appraisers, he suggested, is not the code but a changing economy.

“Appraisers want to go back to the way it used to be,” Mr. Blanchard said. “But it’s good business for us to demand more for less.”

CLASSIC!!

Appraisers might be earning less, but consumers are being asked to pay more. The cost of an appraisal is now about $500, up from $400, appraisers say, because of the management companies’ share.

Moreover, if the goal of the code is to lessen pressure on appraisers, it is not clear that is happening.

A memo from U.S.Bancorp, which is based in Minneapolis, was posted recently on Appraisers’ Forum, an online discussion group. The memo bluntly urged the lender’s appraisers to “try and get the value we need the first time.” (A U.S. Bancorp spokeswoman said the memo was “not an official document.”)

There's even mention of the phantom Independent Valuation Protection Institute!

Under the code, the role of deciding what is pressure is assigned to a new entity called the Independent Valuation Protection Institute. If appraiser complaints are deemed valid, the institute is supposed to forward them to regulators.
Seventeen months after it was announced, the institute has no staff and no appraiser complaint hotline. All that exists is a single Web page.

Read the whole thing

My comment posted to the NYT site:

The comments from the AMC folks are telling -“Appraisers want to go back to the way it used to be,” Mr. Blanchard said. “But it’s good business for us to demand more for less.” This line of thinking is exactly why credentialed, designated, and experienced professionals refuse to accept work from meddling middlemen.

Many of the Appraisal Management Company assignments are accepted by recently licensed, inexperienced folks that often travel a significant distance to provide their supposedly "expert" service in areas where the buyer has examined more of the market than the appraiser is allowed to in order to meet the AMC mandated 48 hour turnaround time.

Mr. Blanchard will soon see the "quantifiable proof as to the problems that management companies are supposedly causing.” It will come in the form of complaints to state regulatory agencies due to poorly developed and incomprehensibly reported baloney prepared by their rookie independent contractors.

The source of the pressure, claimed by Mr. Cuomo to be eliminated, has shifted to the AMC. Although value pressure still exists, the real culprit is fee and turn time pressure. Their panel of appraisers will tend to deliver a product and service commensurate with the price paid, and the AMC will charge the borrower a premium.

When consumers, borrowers, and the public at large get the full story, attitude and demands may change. Folks will learn that the largest banks all have a piece of one or more Appraisal Management Company. The fact that Appraisal Management Companies are, for the most part, unregulated will not go over well with consumers. Borrowers will be surprised that these invisible middlemen often take a larger part of the borrower's appraisal fee than the appraiser, and that the AMC portion of the payment and their relationship with the bank is not disclosed at any point in the transaction.

Homeowners trying to refinance will be shocked to learn that the AMC appraiser was provided with an Automated Valuation Model generated value indication with the appraisal assignment; ostensibly to "assist" the appraiser. Without a doubt, the borrower will be pleased to learn the appraiser's opinion of value duplicates the computer generated number.

There are many more stories to be told and much more investigation needed of the Cuomo generated deal. It will be interesting to sit back and watch it develop.

WSJ - Unintended Consequences of HVCC

The Wall Street Journal has another article about the real estate market, appraisers and the Home Valuation Code of Conduct (HVCC). It's an interesting take with more tales of woe with a couple of interesting observations.

Reappraising Home Appraisers

After being blamed for helping to inflate home values during the housing boom, the appraisal business is again coming under fire. Squeezed by a drop in fees, some appraisers are compensating by driving long distances to handle more assignments.

Their wanderings are raising questions about whether they know enough about the neighborhoods to accurately assess the value of homes—which has implications for both home buyers and owners.

Bob Blake, a flight-test engineer who lives in Palm Beach Gardens, Fla., was shocked when an appraiser who traveled 44 miles from Port St. Lucie, Fla., valued his home at $228,000 in late May. Mr. Blake's mortgage broker, Skip McDonough, protested to the appraisal-management company, Nations Valuation Services Inc., that the appraiser had failed to look at comparable homes. Eventually, Nations sent another appraiser, who valued the home at $295,000. The dispute delayed Mr. Blake's refinancing by more than six weeks.

A spokesman for Nations Valuation declined to discuss the details of the appraisals but said, "We feel we handled it properly."

NOTE: Nations Valuation Service has posted their "commitment" to the HVCC. However, Appraiser Active does not find a "self-certification" or seal. Dang!

The WSJ goes on to give their interpretation of why appraisals are completed for a mortgage finance transaction:

Appraisals are supposed to shield home buyers from paying too much and lenders from overestimating the value of collateral. If appraisals come in too high, buyers may overpay, making defaults more likely. If they are too low, it becomes hard to sell or refinance homes. Many real-estate agents and builders say that the pendulum has swung too far toward caution, and that lowball appraisals threaten to snuff out any recovery in the housing market.

It's a nice interpretation, but a common misconception. The regulatory scheme for real estate appraisers adopted by the United States Congress in 1989 was in response to the collapse of the Savings and Loan industry. The purpose of the federal legislation is to protect federally regulated financial institutions, not individual home purchasers or borrowers.

Appraisals are completed for the benefit of the client and intended users. Rarely, in the case of an appraisal completed for a real estate purchase or refinance transaction, is the borrower named as an intended user.

The debate over appraisals is inflamed by a natural tension: Real-estate agents and mortgage brokers, who need to complete transactions to collect their fees, are unhappy when an appraiser nixes the sale price. But it also suggests that there may be unintended consequences to an attempt by New York Attorney General Andrew Cuomo to reform the appraisal business.
....
"Many appraisers are struggling to survive on the fees paid by the AMCs," says Bill Garber, a spokesman for the Appraisal Institute, a trade group based in Chicago. Appraisers are being asked to work faster even as their fees are cut, and that conflicts with the goal of getting reliable appraisals, he says.

Appraisal-management companies deny they are squeezing appraisers too hard. A spokesman for banking giant Wells Fargo & Co., which owns an AMC, says it "has invested substantial time and resources in the quality control of the valuation process to, among other things, ensure that individual appraisers have relevant knowledge of the markets and properties they review." A spokeswoman for Mr. Cuomo says the new code is working well and helping protect appraisers from pressure to inflate estimates.

The pile of appraisals generated by AMC Independent Contractor appraisers accumulating on the floor by my desk proves otherwise. The complaints about non-geographic competent appraisers pouring in to regulatory agencies provides even more evidence that the non-regulated, Big Bank Owned AMCs and Andrew Cuomo are blowing smoke.

In fact, within my collection is an "appraisal" generated by an individual contracted by RELS, the Wells Fargo affiliated AMC. Along with the "appraisal", the borrower provided a copy of the Automated Valuation Model (AVM) generated value estimate produced by RELS. The AVM was crap, and the "appraisal" mysteriously provided an opinion of value that mirrored the AVM estimate. The Wells Fargo claim that "that individual appraisers have relevant knowledge of the markets and properties they review."? The property was in Pinellas County, Florida. The "appraiser" is based in Ft. Myers, Florida. That's 120 miles away!

Here's more:

Sometimes appraisers are called on to express opinions on the values of faraway homes without even seeing them. LandSafe, an appraisal unit of Bank of America Corp., in May assigned Jane Price, an appraiser in Dallas, to review another appraiser's estimate of a home in Cathedral City, Calif. Ms. Price didn't visit the neighborhood in question, but her review cited nearby homes she used to determine comparable value.

I'll bet Ms. Price has no idea where in tarnation Cathedral City, California is, and that she does not have a license or certification to appraise in California. How does this protect the federally regulated financial institutions, never mind Fannie Mae and Feddie Mac. Is it any wonder the GSEs are in their current mess?

Go ahead and read the whole thing. By the way, it's 1320 miles from Dallas to Cathedral City.

HVCC Certified, and a Blog Award

One of the most popular accoutrement's for Appraisal Management Companies these days is a SEAL to bolster their claims of compliance with the Home Valuation Code of Conduct (HVCC).

"Certification refers to the confirmation of certain characteristics of an object, person, or organization. This confirmation is often, but not always, provided by some form of external review, education, or assessment. One of the most common types of certification in modern society is professional certification, where a person is certified as being able to competently complete a job or task, usually by the passing of an examination." - Wikipedia

Interestingly enough, AMC's appear to be comfortable with "self-certification" and awarding themselves Seals and Certificates.

Appraisers, on the other hand, must meet the Real Property Appraiser Qualification Criteria developed by the Appraiser Qualifications Board of the Appraisal Foundation and their state's licensing and certification laws to become Certified. For instance, here in Florida, appraisers must comply with Chapter 475, Part II of the Florida Statutes to become certified.

Section 475.615 Qualifications for registration or certification, among other things, requires the applicant to be competent and qualified to make real estate appraisals with safety to those with whom they may undertake a relationship of trust and confidence and the general public. The statute also requires a fingerprint card to be forwarded to the Division of Criminal Justice Information Systems within the Department of Law Enforcement and the Federal Bureau of Investigation for purposes of processing the fingerprint card to determine if the applicant has a criminal history record.

475.617 Education and experience requirements, specifies the minimum education and experience requirements to become certified. These mirror the AQB Real Property Appraiser Qualification Criteria. No self-certification here.

After all that, Section 475.616 Examination requirements states that an applicant for certification must demonstrate their knowledge of appraisal law, appraisal standards, an understanding of the principles of land economics, real estate appraisal processes, reliable sources of appraising data, and problems likely to be encountered in the gathering, interpreting, and processing of data in carrying out appraisal disciplines by passing a written examination.

After meeting the Character, Education, Experience and Examination requirements, the Certified Appraiser is subject to discipline by the Florida Real Estate Appraisal Board for misconduct, as specified in 475.624 Discipline.

The Florida Certified Appraiser is NOT awarded a seal. Sheesh!

Nevertheless, I found a blog award and I hereby bestow it upon Appraiser Active (h/t Iowahawk)

Free Seminar - Charles Rutenberg Realty

Charles Rutenberg Realty Invites you to a free seminar

A SHORT SALE AND APPRAISAL SEMINAR

Charles Rutenberg Realty will be having a short sale and appraisal seminar

Monday, August 17th, 2009 from 10:00 A.M. until Noon

Tucson’s Located in the
ICOT Center on Ulmerton Rd. just east of US 19.
13563 Icot Boulevard, Clearwater, FL 33760
All are invited, an RSVP a must, (see below)

APPRAISALS IN THIS MARKETPLACE: MYTHS AND REALITIES

Frank Gregoire will be discussing Home Valuation Code of Conduct.

Licensed in Real Estate since 1976, Frank is a second generation REALTOR®, Broker and Appraiser. In addition to his Real Estate Brokers License, he is a State-Certified Residential Appraiser and Appraisal Instructor.

Frank was appointed by Governor Jeb Bush to the Florida Real Estate Appraisal Board in February, 2000 and served eight years, four as Chairman. During his service as a member of the Florida Real Estate Appraisal Board, he represented Florida on the Appraisal Foundation State Regulator Advisory Group and as a member of the Board of Directors of the Association of Appraiser Regulatory Officials.

In addition to providing Expert Witness services in Administrative Hearings, Florida and Federal Courts, Frank is often quoted by local and nationally syndicated real estate columnists and appears as a speaker on appraisal and mortgage related topics. Articles by Frank have been published in the REALTOR® Magazine, the Journal of Property Economics and his blog, Appraiser Active.

RSVP a Must: Email Kristen at kconover@tampabay.rr.com

Hope to see you there

The Taylor, Bean, & Whitaker News Is Not Good

From Reuters:

NEW YORK, Aug 11 (Reuters) - Lawyers for Taylor, Bean & Whitaker Mortgage Corp, the 12th-largest U.S. mortgage lender, said in court papers last week that a "bankruptcy filing is imminent" for the lender after it was forced to shut down mortgage lending operations.

....The Wall Street Journal reported on Tuesday that an internal email at Taylor Bean dated Aug. 10, referred to a new computer folder "to assemble all of our bankruptcy detailed spreadsheets."

Who Do You Trust?

UPDATE!! - StreetLinks Quality Control Reviewer Opportunity!!

Since the May 1st implementation of the Home Valuation Code of Conduct (HVCC), there has been quite a bit written about Appraisal Management Companies (AMCs), their method of appraiser selection and retention and the quality and credibility of appraisal reports. The AMCs have been under fire from professional appraiser associations, individual appraisers and the National Association of Realtors (NAR).

Some of the AMCs have started to fire back. Yesterday, this was released:

StreetLinks Sets the Record Straight on Appraiser Quality

INDIANAPOLIS, Aug. 10 /PRNewswire-FirstCall/ -- StreetLinks National Appraisal Services addressed the anti-HVCC rhetoric dominating the media in recent weeks in a newsletter distributed to its national appraiser network.

"A number of groups with self-serving opposition to the HVCC have flooded the media with distorted claims about appraisers and appraisal management companies to win sympathy toward reversing or placing a moratorium on the code," explained StreetLinks CEO Steve Haslam. "In their lobbying efforts, these groups have crossed the line and impugned the integrity of the thousands of highly professional and experienced appraisers we have the opportunity to work with every day. On behalf of reputable appraisers and lenders, I felt compelled to confront these errant claims and set the facts straight."

Mr. Haslam's message to "Our Valued Appraisers" is right HERE.

If the name Steve Haslam sounds familiar, he is NovaStar's former chief of retail lending. NovaStar Financial, a large subprime lender during the housing boom, was disciplined by three states — Massachusetts, Nevada and Washington — for such infractions as employing unlicensed brokers and charging unlawful fees. Although admitting no wrongdoing, the company paid $5.1 million in 2007 to settle allegations in a class action brought on behalf of borrowers. After its mortgage business collapsed, NovaStar morphed into an AMC last year by acquiring another company and renaming it StreetLinks National Appraisal Services.

Back in February, 2009 BusinessWeek offered their TAKE on subprime players getting into the AMC game.

Regardless of what folks say, StreetLinks has this nifty, self-awarded seal.

How can we argue with that? But who do you trust?

UPDATE!! - StreetLinks Quality Control Reviewer Opportunity!!

Here's your chance to become a StreetLinks Quality Control Reviewer.

UPDATE 8/25/2009: The link to the job is no longer active. Someone must have been a wee bit embarrassed.

Job Description:

Execute, within a service center, a defined review process for all types of mortgage related appraisal products with the objective to verify their compliancy [sic] with StreetLinks service terms and USPAP, Fannie Mae, Freddie Mac and Underwriter guidelines. Communicate directly with appraisers to coordinate report revisions and completion deadlines for the expedient deliver [sic] of a compliant product to the client. Handle inbound lender underwriting stipulations by interpreting and communicating those stipulations to the appraiser for consideration and execution. Perform transaction review and billing audit prior to every product delivery. Serve as a resource to industry and product knowledge for customers and the StreetLinks team.

Specific Job Skills:

• Must be an excellent verbal and written communicator and demonstrate success and experience operating multiple software applications.
• Candidate must have the ability to process confidential information and consistently perform with a high level of customer service.
• The ability to “multi-task”, operate a multi-line telephone system and strictly adhere to operational protocol is a keystone to the quality control reviewer position.
• Candidate must have at least two years of real estate industry experience in the field of mortgage origination, underwriting, mortgage insurance, appraisal and/or other mortgage related position.

Education Requirements:

• High School Diploma
• Proficient in Microsoft Word, Excel, Outlook, Data-Entry, and Internet Explorer Preferred
• Strong Verbal & Written Communication Skills
• Typing Skills 40 plus WPM Preferred
• Appraisal Coursework Preferred

NOTE FROM APPRAISER ACTIVE: It does not appear as though a Seal is awarded for this position.

Security One Valuation Services - Making Promises

UPDATE - AUGUST 11, 2009 - Talked with folks at Security One - Scroll to bottom for UPDATE

UPDATE #2 -AUGUST 15, 2009 - Payments being made to appraisers

UPDATE #3 - August 25, 2009 - From the Comments, it's not good news

UPDATE #4 - AUGUST 27, 2009 - From the Comments, a note from Ember at Security One

UPDATE #5 - September 9, 2009 - From the Comments, Ember says it's not looking good

The cascade of problems associated with the closing of Taylor, Bean, & Whitaker continues. Some FOLKS can't get TBW to accept payments on their mortgages. The Massachusetts Division of Banks said it has issued a cease-and-desist order against Taylor, Bean & Whitaker Mortgage Corp. The Florida Office of Financial Regulation released an emergency CEASE and DESIST order August 7th against Taylor Bean. Freddie Mac, now under Federal government control and being supported by taxpayers, said the collapse of lender Taylor, Bean & Whitaker Mortgage Corp. may cause it “significant” losses.

HERE is the Freddie Mac SEC filing. Included within is this tidbit:

"On August 4, 2009, we notified Taylor, Bean & Whitaker Mortgage Corp., or TBW, that we had terminated its eligibility, for cause, as a seller and servicer for us effective immediately. TBW accounted for approximately 5.2% and 2.7% of our single-family mortgage purchase volume activity for full-year 2008 and the six months ended June 30, 2009, respectively. We are in the process of determining our total exposure to TBW in the event it cannot perform its contractual obligations to us. The amount of our losses in such event could be significant. "

Some of the finger pointing has started, including accusations by former employees. Hundreds of former employees are looking for work. We even have a crook taking credit for helping TBW down the road to ruin.

It looks like the media is covering every aspect of the fiasco, except one. What about the recently formed Appraisal Management Company, Security One Valuation Services, LLC, and the countless independent contractor appraisers wondering if and when they will ever be paid for appraisal assignments completed for the firm?


As Appraiser Active noted in a prior post, Security One Valuation Services, LLC is partially owned by Taylor, Bean, & Whitaker. In fact, the Taylor, Bean, & Whitaker web site even has a link encouraging appraisers to sign up because its' "Safe. Simple. Compliant."


Appraisers from across the country have been talking about their unpaid invoices. Although many appraisers have received emails assuring them payments will be made, their emails to the company are bouncing back as undelivered.


In the meantime, some folks involved in lending are asking questions such as: "If a new lender takes over a TBW loan for which you did the appraisal, would you be willing to accept a new assignment from the new lender that updates the original appraisal and has a new effective date? What would you charge for this service?"

Why would an appraiser agree to a lower fee and risk being stiffed by another AMC when they have already taken it on the chin from Security One?



If you are among the independent contract appraisers with outstanding invoices with Security One, please let us know if they make good on their promise to pay within 10 - 14 business days. Appraiser Active has started the clock.

UPDATE - AUGUST 11, 2009 - After reading posts by appraisers from around the country, fielding emails and telephone calls from independent contractor appraisers in Florida concerned about payment of outstanding invoices, I picked up the phone and called Security One Valuation Services, LLC. The number is right on their web site.


My call was answered on the third ring. I asked to speak with Todd Barfield and was asked to hold. After a short wait, a pleasant sounding Tammy came on the phone. After I asked again to speak with Mr. Barfield, she mentioned he was not in but she could answer my questions and help me.

My inquiry concerned the number of appraisers contacting me with concern about their unpaid invoices and what Security One was doing to get them paid. Tammy said (paraphrasing) that Taylor, Bean, & Whitaker was their main client, their closing affected Security One, and that Security One was spending the next two weeks printing checks. She claimed that every appraiser "should" be paid within 10 - 14 working days. When asked if their Independent Contractor Appraisers "should" or "would" be paid, Tammy emphasized "would" be paid.

Ms. Tammy also mentioned that appraisers with questions should direct them to Ember at Security One.

Since Appraiser Active has not outstanding invoices, we're counting on you to keep us informed if this promise is kept. Either email or post your experience here by leaving a comment.

All the best in your quest.

UPDATE #2 - August 15, 2009 - Payments being made to appraisers

From the comments and emails:

I just received the message below from a friend in Pinellas County, Florida. He had 9 invoices outstanding when Taylor, Bean, & Whitaker closed their doors.

"5 DOWN 4 TO GO!!!! WENT TO THE MAIL BOX THIS AM AND THERE WERE SOME CHECKS FROM SECURITY ONE. COULD THERE BE A COMPANY OUT THERE THAT STICKS TO THEIR WORD?"

Paul P said...
Security One is sticking to their word, I have received all my invoices paid for a total of $5500. Took them a little while; however, I got them all paid. I can understand that they would have a little problem paying appraisers if their client shut their doors, but they are keeping their word. A+++++ Company. PCP

UPDATE #3 - August 25, 2009 - It's not good news

Anonymous just posted this comment:

"I just spoke with Security One - TBW filed Chapter 11 and Security One has been instructed to hold all remaining payments to appraisers at this time. So stop checking your mailbox."

UPDATE #4 -August #27, 2009 - A note from Ember at Security One

Attention ALL APPRIASERS: The name is Ember not Amber! We are all doing our level best to process payments and get checks mailed out. Let's clear up a few things-

1. Payments have not been stopped by TBW's bankcruptcy. They have been delayed a few days for close scrutiny of payments to make sure we are in line with the law.

2. Yes, it has taken us a while to get you payment but you don't know the whole story of what has happened so why do you write us off and report our company as horrible? We are very close to getting all of the appraisal payments for the TBW loans out of our pipeline and EVERY appraiser paid.

3. So, you can email and call all you want but my word is as good as it gets when I tell you every appraiser, every appraisal report completed...will be PAID IN FULL!

So, gather your positive side and realize that we have NOT lied to you or disillusioned you. These are the facts. Thank you all for your hard work getting these appraisals completed in mostly a timely manner. May God bless you and keep you in your careers and business! Have a nice day.

-Ember @ SOVS

UPDATE #5 - September 9, 2009 - From the Comments, Ember Says it's Not Looking Good

**Not looking good. Here is the nitty gritty of what I pieced together: Since Platinum Community Bank has been shut down and all accounts frozen over the weekend the checks that were sent out may not be honored. I don't know much since I am not there at SOVS anymore as of Friday but I know that there was a batch of 1,000 checks waiting to be sent out last week that I wonder what will happen now.

It is absolutely terrible...SOVS has the money to pay the appraisers but alas the government has once again swooped down and jerked the last remaining "toe" so to speak (since the legs were knocked out from under SOVS when TBW shut down) out from under SOVS. It makes me want to scream because of the unjustice!!

I don't think there is anyone in the SOVS office to answer any questions...I will try and update the status here when I know something more. Makes me sick thinking about it. I doubt I will see my last paycheck for 2 weeks but that is small potatoes compared to what some of you are waiting on.I know this is long but I am venting my frustration of this whole complex situation! I sincerely hope all of you are able to recoup your losses.

May God keep and sustain you! Until next time, Good night.

(On a personal note - Ember, Thank You for your efforts and updates. For many appraisers across the country unable to get through to Security One by phone or email, your comments on Appraiser Active are the only source of information. -Frank)

Taylor, Bean, & Whitaker - What About the Appraisers?

UPDATE: Scroll to bottom for More TBW and Security One stories.

MORE UPDATES below!

Earlier today the Wall Street Journal and dozens of other sources reported that the Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency. Yesterday, August 4th, 2009, HUD issued a press release announcing the suspension. HUD states:

The Federal Housing Administration (FHA) today suspended Taylor, Bean and Whitaker Mortgage Corporation (TBW) of Ocala, Florida, thereby preventing the Company from originating and underwriting new FHA-insured mortgages. The Government National Mortgage Association (Ginnie Mae) is also defaulting and terminating TBW as an issuer in its Mortgage-Backed Securities (MBS) program and is ending TBW's ability to continue to service Ginnie Mae securities. This means that, effective immediately, TBW will not be able to issue Ginnie Mae securities, and Ginnie Mae will take control of TBW's nearly $25 billion Ginnie Mae portfolio.

FHA and Ginnie Mae are imposing these actions because TBW failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud. FHA's suspension is also based on TBW's failure to disclose, and its false certifications concealing, that it was the subject of two examinations into its business practices in the past year.


The release continues with:

FHA Commissioner David Stevens said, "TBW failed to provide FHA with
financial records that help us to protect the integrity of our insurance fund and our ability to continue a 75-year track record of promoting, preserving and protecting the American Dream. We were also troubled that the Company not only failed to disclose it was a target of a multi-state examination and a separate action by the Commonwealth of Kentucky, but then falsely certified that it had not been sanctioned by any state. FHA won't tolerate irresponsible lending practices."

Taylor, Bean, & Whitaker followed up with their own press release:

TAYLOR BEAN MUST CEASE ALL ORIGINATION OPERATIONS EFFECTIVE IMMEDIATELY

OCALA, FLORIDA – TAYLOR, BEAN & WHITAKER MORTGAGE CORP. (“TBW”) RECEIVED NOTIFICATION ON AUGUST 4, 2009 FROM THE U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, FREDDIE MAC AND GINNIE MAE (THE “AGENCIES”) THAT IT WAS BEING TERMINATED AND/OR SUSPENDED AS AN APPROVED SELLER AND/OR SERVICER FOR EACH OF THOSE RESPECTIVE FEDERAL AGENCIES. TBW HAS UNSUCCESSFULLY SOUGHT TO HAVE THE TERMINATION/SUSPENSION DECISIONS OF EACH OF THOSE AGENCIES REVERSED. AS A RESULT OF THESE ACTIONS, TBW MUST CEASE ALL ORIGINATION OPERATIONS EFFECTIVE IMMEDIATELY.

REGRETTABLY, TBW WILL NOT BE ABLE TO CLOSE OR FUND ANY MORTGAGE LOANS CURRENTLY PENDING IN ITS PIPELINE. TBW IS COOPERATING WITH EACH OF THE AGENCIES WITH RESPECT TO ITS SERVICING OPERATIONS AND EXPECTS TO CONTINUE TO SERVICE MORTGAGE LOANS AS IT RESTRUCTURES ITS BUSINESS IN THE WAKE OF THESE EVENTS. WE UNDERSTAND THAT THIS COULD HAVE A SIGNIFICANT IMPACT ON OUR VALUED EMPLOYEES, CUSTOMERS AND COUNTERPARTIES, AND ARE VERY DISAPPOINTED THAT A LESS DRASTIC OPTION IS UNAVAILABLE.

Taylor, Bean, & Whitaker is based in Ocala, Florida. That's in Marion County, the north central part of the state. According to the Ocala Star-Banner, Marion County's unemployment rate already stands at 12.6 percent. It's not clear how many employees would lose their jobs. However, a special jobs center is being organized to help workers who lose their jobs. This is aimed at employees of Maslow, Security One Valuation Services (SECURITY ERROR at Security One site-no pun intended), Citrus Land Title and Taylor Bean & Whitaker.

This is certainly a sad day for Ocala, Marion County and all the folks employed by Taylor, Bean, & Whitaker. Let's not forget the appraisers affected by this turn of events.

With the knowledge the Home Valuation Code of Conduct would soon be controlling the selection and retention of real estate appraisers, Taylor, Bean, & Whitaker, along with Florida Appraiser Todd Barfield, created their very own Appraisal Management Company (AMC)March 10, 2009. That Company, Security One Valuation Services.

Here are excerpts from Security One's filings with the Florida Division of Corporations showing the names of Managing Members

(click to enlarge)

Thousands of appraisers were solicited to join this new AMC early this year, yours truly among them. Although not a fan of AMC work, I took a look at their site and contemplated submitting my name. Before filling the application, however, I had a FLASHBACK and thought better of getting back on the treadmill. It looks like it was a good decision.

Late this afternoon, a good friend and State-Certified Appraiser here in Pinellas County called in a semi-panic. He has over 15 invoices, totalling over $5,000.00, unpaid by Security One.

Another appraiser from Massachusetts posts "I had two assignments in July, refi and they have not been funded. Sent an email to TBW’s AMC asking if their doors are closed also, no response yet."

From Virginia, an appraiser says "I also did my very first AMC appraisal assignment for full fee through their AMC SecurityOne in July. I only accepted one assignment and told them that I wouldn't accept additional assignments until I got paid for the first one. I emailed them today about payment and have not heard anything yet. This is a good lesson learned. I only have myself to blame for not following my motto of never doing work for AMCs!!!"

An appraiser in Nevada posts "I did my 1 and only assignment for them last week. Oh well, glad it happened before they sent over more work I won't get paid for."

From Nevada another appraiser says "Taylor, Bean and Whittaker has taken me for 2 invoices along with 2 other appraisers that I know. Seems XXXXX (not verified), will be taking them over. How are appraisers to get paid when the HVCC commands that we trust a 3rd. party with our money? Before HVCC we collected at the door now we have to put trust in companies via e-mail that may be here today and gone tomorrow. Is there a better way?

The Taylor, Bean, & Whitaker story is a sad one. However, the more serious story involves the countless appraisers interested in providing appraisal services for mortgage loans that are forced by the Home Valuation Code of Conduct to extend credit to companies tied to, or owned by large, shaky (and maybe shady) mortgage lenders. Companies that are unregulated by all but a few states. Companies that, as the mounting evidence demonstrates, are guilty of the same kind of pressure on appraisers the HVCC was designed to eliminate.

It seems that only appraisers are being eliminated. What a system.

They meant for the acronym HVCC to be pronounced "havoc" right?

UPDATE: More TBW and Security One stories.

An Appraiser from Virginia posts "I just got a call from an loan officer from Virginia. She wanted to know if I got paid for the appraisal I did in July as her client did pay for the appraisal fee up front. I told her no. She said she's going to make sure that I was paid, asked if I had a contact name and number for Taylor Bean & Whitaker which I gave her. She was so angry and was going on and on about her 25 loans in the pipeline and her having lost over $25,000 in commission because of TBW, about the out of state appraisers having done poor quality appraisals and having to pay for 2 appraisals in most cases for one property, having to wait sometimes over a month for an appraisal to be completed etc.

No wonder so many are angry. It seems that everyone is losing money with the implementation of the HVCC. Everyone except the AMCs.I haven't received any replies to my emails and phone calls and I don't think I will"

An appraiser from Jacksonville, FL emails " I am presenting my bills for appraisals for Taylor Bean and Whitaker to Andrew Cuomo for payment." He also adds this http://us.mc531.mail.yahoo.com/mc/compose?to=andrew.cuomo@attorney.general.gov , and the suggestion that others contact the fella in New York and send your invoices too.

A distressed (and angry) appraiser posted "Just left a message w/AG Cuomo's HVCC hotline asking if they will be paying the TB&W appraisal bill, since we were not allowed to collect the appraisal fee upfront I assume AG Cuomo will pay for it....will keep you posted. OH by the way...the is office number is 1-800-771-7755 hit "0" for the operator and ask for the HVCC hotline..then leave a message."

Another appraiser: "I am currently on hold. I tried to call Security One about whether or not I would get paid for my appraisal work. I didn't get Security One, I got the Taylor Bean switchboard. I thought these AMC's were supposed to be separate entities which were impartial? What a joke. I guess TB&W ran out of money and couldn't pay their Congressman anymore for protection."

And now, something different from MortgageNewsDaily:

Another concern regarding the closing of Taylor Bean is with the appraisals that were performed. Under the HVCC guidelines, you are supposed to be able to transfer appraisals from one lender to another, seems simple but most lenders have conditions. The appraisal must have been ordered through an Appraisal Management Company that is recognized by the new lender. If that lender does not utilize that particular AMC you cannot transfer the appraisal and will now have to pay for a new one. Also, the appraisal must be transferred directly from Taylor Bean to the new lender.

With the closing of Taylor Bean it is unlikely that they will continue to employ someone to do this task. In addition, even if they do have someone available for this task, there will be thousands of loans to go through which will make the process very difficult and time consuming. One major lender has announced that they will not take a transferred appraisal under any circumstance but they will lower their underwriting fee by the cost of the new appraisal. This will require that the consumer pay for a new appraisal up front. This illustrates one of the many bad aspects of the Home Valuation Code of Conduct.

According to Congress who passed this law, appraisals are supposed to be portable from one lender to the next but that is not the case and hopefully Taylor Beans

demise will draw attention to this matter.

Appraiser Active says: Chances are the appraiser has not been paid for their work!! Also, the HVCC is NOT a LAW and CONGRESS had nothing to do with it! However, we in the real estate profession hope CONGRESS will get moving and DO something about it.

UPDATE - August 7, 2009

An Appraiser from Massachusetts writes "Mortgage Broker called upset over the TBW closing, today, 08/07/2009. Her client gave SecurityONE a credit card payment of $600 for the appraisal.

The Mortgage Broker asked to me to re-assign the report as she has just down loaded the HVCC affidavit from TBW. She says I can just change the name on the report to another bank. She is upset over the $600. I told her I have not been paid. The HVCC and the affidavit have nothing to do with me. Now can the applicant have the credit company reverse the charge if my appraisal report is not used for a transaction? The report is complete and is in TBW, but has no value to TBW.

Did the HVCC think of the scenario? Was the borrower's appraisal fee protected with the HVCC?"

This Massachusetts Appraiser knows, regardless of being paid for his services or not, that simply changing the Client Name on the appraisal report is not an option. How is the borrower protected under the HVCC?