Wednesday, November 11, 2009

Veterans Day - 2009

Please fly your U.S. flag today and express your appreciation to veterans. We have a lot to be thankful for, and veterans need a little more appreciation today.

Claims Against Appraisers, the FBI and NAR Conference

It's early Wednesday morning, and I'm clearing up a few things in preparation for a flight across the country to attend the 2009 REALTORS Conference and Expo in San Diego. There was a last minute appraisal inspection today, along with an attempt to put one last assignment out the door. Efforts to clear my desk have kept me from posting, although I did update the H.R. 3044 page with the increased number of cosponsors.

Before heading out, though, I wanted to post links to two interesting posts on the Appraiser Legal Defense and Insurance Blog.

The first, Claims Against Residential Appraisers in 2009, describes the some of the major trends and issues seen in 2009:
  1. Overvaluation Claims by Borrowers
  2. Undervaluation Claims by Borrowers and Sellers
  3. FDIC Claims
  4. Claims Involving Trainees and Independent Contractors
There are some interesting observations and some good advice. It's worth a read.

The second post, The FBI is on the Phone for You, is must read. Given the heightened interest in mortgage and valuation related fraud, and the stepped up enforcement efforts of the FBI and other investigative agencies, it's nice to see some advice about what should the good appraiser do when the FBI or any law enforcement officer calls. Appraisal Scoop posted the same story a couple of days ago.

Friday afternoon (Friday the 13th and I'm superstitious), I will be attending the meeting of the NAR Appraisal Committee. Here's what the agenda looks like:

I. Call to Order and Introductions – Penny Triplett
II. Approval of Minutes from Last Meeting – Penny Triplett
III. ReportsAppraisal Foundation Trustee Report – Joe Traynor
NAR Representation on Appraisal Foundation Boards - Penny Triplett
The Appraisal Foundation Advisory Council (TAFAC) – Vic KnightIV.
New Business
A. Tentative: FHFA & Freddie Mac Speaker & FHA Speaker – Thomas Strickland
B. Legislative/Regulatory - Jerry Nagy

2. HR 1728
3. HR 2336
4. Consumer Protection Finance Agency
5. FHA Appraisal Rules

C. Report of Broker Price Opinions Work Group – Penny Triplett

V. Other Business

A. Update on Appraisal Education Workgroup – Penny Triplett
B. Breaking out Appraiser fees on HUD-1 – Thomas Strickland
C. Next Meeting: NAR MIDYEAR MEETINGS - Washington, DC

VI. Final Comments and Adjournment

Immediately following the meeting the NAR Appraisal Committee will celebrate the anniversary of the RAA/GAA designations.

It's likely there will some discussion of this, as well. It was a surprise to everyone.

More, when I return next week.

Wednesday, November 4, 2009

Another Class Action Suit Filed - AMC Related

Well, well, well. Isn't this appropriate? On the same day a bill is introduced in the Florida House of Representatives to regulate Appraisal Management Companies, Hagens Berman Sobol Shapiro, LLP, files a class action suit against KB Home, Countrywide and LandSafe alleging a widespread and complicated inflation scheme. One of the major players in the alleged scheme is LandSafe, an unregulated Appraisal Management Company, owned by Countrywide.

From the Press Release:

ORLANDO, FL - A Central Florida homeowner forced into foreclosure filed a class-action lawsuit last week against KB Home (NYSE: KBH), Countrywide Financial and LandSafe Appraisal Services, claiming the three conspired to rig housing prices in Florida, South Carolina and North Carolina, costing home purchasers millions of dollars, and fueling the collapse of the region's housing market.

The suit, filed in U.S. District Court in Orlando, Fla. on Friday, October 30, claims the three companies employed a well-planned scheme to control the typically independent appraisal process, jacking up home values, which, in turn, were used to determine the value of other homes sold by KB, affecting thousands of homeowners.
According to the 94-page complaint, Countrywide funneled all its KB customers' home appraisals to a single person at LandSafe, an appraisal subsidiary of Countrywide, who in turn would deliver an appraisal value at whatever KB and Countrywide ordered.

The complaint is 94 pages. For the appraisers reading this, the allegations made against the parties are nothing new. We have been watching this going on all around us, sounding the alarm and clamoring for someone, some entity, some regulator, to reign these bastages in.

Read it all RIGHT HERE

Appraiser Active mentioned another HBSS suit HERE. That one makes allegations against Wells Fargo and its appraisal subsidiary Rels Valuation. Isn't it interesting how the banks and their AMCs can game the system and dig deep into consumer's pockets and wallets?

- Mary Shanklin of the Orlando Sentinel offers some additional details and statements from KB Homes.
"It was common practice for builders and subdivision developers to have pet appraisers," Gregoire said. "That was true not only for subdivisions but also for builders within a subdivision or development — and, in particular, for condo converters."

It's time to Regulate Appraisal Management Companies - FLORIDA!

Quite a bit has transpired since the first "It's Time to Regulate Appraisal Management Companies" post here on Appraiser Active. Additional form are required for mortgage loan appraisals and, most notably, the Home Valuation Code of Conduct (HVCC) has been implemented.

However, some things don't change. Back in January, the Appraiser Active post noted that Appraisal Management Companies typically administer a network of certified and licensed appraisers to fulfill real estate appraisal assignments on behalf of mortgage lending institutions. They often recruit, qualify and verify licensure for their panel of appraisers.

We also mentioned a major problem with Appraisal Management Companies; they are completely outside the regulatory loop controlling real estate appraisers and protecting the public. No state or Federal agency is tasked with the regulation of Appraisal Management Companies. In fact, there is a documented case of a Florida Appraisal Management Company owned and operated by an individual that surrendered his Certified Residential Appraiser credential for permanent revocation to avoid prosecution for several complaints. That story was detailed by the St. Petersburg Times in May, 2009.

Well folks, it's time to gear up for the 2010 effort to REGULATE APPRAISAL MANAGEMENT COMPANIES IN FLORIDA!

Take a look at HB 303, filed in the Florida House of Representatives yesterday by Representative Matt Hudson. Matt is a REALTOR®, and well aware of the problems associated with Appraisal Management Companies.

Regulation of Real Estate Appraisers & Appraisal Management Companies:

Requires appraisal management companies to register with DBPR; provides exemptions; specifies application requirements & procedures; requires application, registration, & renewal fees for appraisal management companies; requires fingerprinting & criminal history records checks of, & provides qualifications for, certain persons who control appraisal management companies; requires nonresident appraisal management companies to consent to commencement of actions in this state; establishes additional acts for which appraisers are subject to disciplinary action; provides for discipline of appraisal management companies by Florida Real Estate Appraisal Board; provides penalties; revises requirements for retention of appraisal records; requires appraisal management companies to follow such requirements; requires DBPR & board to adopt certain rules.

Thanks, Matt!

Please let Rep. Hudson know of your appreciation, and how important this bill is for the appraisal profession, the real estate market and consumer protection in Florida.
Tallahassee Office - (850) 488-1028
Naples Office - (239) 417-6270
Pembrooke Pines Office - (954) 704-2990

Press Release - Majority Office

Tuesday, November 3, 2009

Security One Valuation Services - November 2nd UPDATE from Todd Barfield

It's been about a month since the last post with an update from Todd Barfield about the checks issued by Security One Valuation Services, LLC. Although the number of comments has tailed off, plenty of folks continue to email me with questions.

In response to an email sent to Todd over the weekend, this response was received today:

Email from FDIC to SecurityOne October 15, 2009

I can only answer your question on the release of funds: investigations should be completing the review of this account by the end of next week. If it turns out that the FDIC has no claim against this account, the funds will be released immediately.

From FDIC to SecurityOne October 23, 2009

Investigations is in the process of releasing holds. Yours has not been cleared yet. Thank you

There has been no further correspondence from the FDIC

That's all I have right now. If there is anything new, I'll let you know.

Sorry for the light posting and lack of updates. We have been swamped with a bunch of interesting assignments. When time permits, there is some news to post.