Wells Fargo Visits Appraiser Active!

To tell the truth, Wells Fargo did not drop by my office, but folks from Wells Fargo have been visiting the Appraiser Active site.

There are a few tools used to help me determine the level of activity on Appraiser Active. In addition to lijit and Google Analytics, sitemeter provides quite a bit of information. Not only does it keep a running total of visits to the site and page views, it lets me know the service provider and what keywords are used by folks to get to this site.

Given all the interest in the Wells Fargo RVS Desktop Appraisal and their heavy handedness in dealing with questions about an appraiser's ability to comply with mandatory appraisal standards when accepting a Wells Fargo "opportunity" to participate in the exciting new program, it was amusing to learn what keywords are used when Wells Fargo employees land here on Appraiser Active.

Reactions to Wells Fargo RVS Desktop Appraisal Announcement

UPDATE!! - The North Carolina Appraisal Board Weighs In ON RVS Desktop Appraisal Announcement - Scroll to bottom for full text.

In response to the nasty-gram emailed to me by the fine folks at Wachovia, this email was sent their way:

Mr. Ramirez,

Thank you for your message and expression of concerns.

You may wish to know the post you found to be offensive has been modified. Instead of the Wachovia email, I reference an email from another person/entity with essentially the same information. That email DID NOT come from Wachovia.

Of concern is the fact you did not take issue with any of the points made in my post on Appraiser Active. Instead, your preference was to avoid disclosure, openness and discussion.

This “product” referenced in the email sent to appraisers from coast to coast has been discussed and debated extensively among appraisers, state regulators, AQB Certified USPAP Instructors, past members of the Appraisal Standards Board and users of appraisal services over the past few days. The consensus is that there are serious problems with the terms of the offering by Wachovia.

• It is undeniably a contingent fee arrangement.
• The contingent fee arrangement does not comply with USPAP.
• The contingent fee arrangement does not comply with Florida law.
• Appraisers may be in violation of the Scope of Work Rule by accepting the assignment conditions dictated by the Client.
  
  In the event you would like to discuss these issues or make a statement with respect to making corrections or modifications, I would certainly be interested. State regulatory agencies from Florida to Washington State would be interested as well.
  
  In the meantime, I wish you well.
  
  Respectfully,
  
  Frank
  Francois (Frank) K. Gregoire IFA RAA
  Gregoire & Gregoire, Inc.
  Realtor - Appraiser
  
  P.S. Several folks with an interest in the outcome have been blind copied on this email.

Among the "several folks with an interest in the outcome" were a selection of Administrators, Members and Attorneys representing State Appraiser Regulatory Agencies from one end of the country to the other. My email, along with links to the Appraiser Active and Matrix blog posts, were forwarded to others in their regulatory agency network. Needless to say, the Appraiser Regulatory Agency group is concerned.

Here are a few comments. The names and states have been redacted because these are not yet "official" positions.

A letter from XXXXX could be directed to the Comptroller's office describing how such practices are contrary to their need for ethical, competent appraisers to provide appraisals for collateral decisions. Wells Fargo wants to engage an appraiser, but they only pay for the appraisal is the appraiser is able to report certain predetermined results (e.g. at least two comps in the last 120 days, at least 2 comps within 1 mile, all comps must be listed in MLS, etc.). The problem, of course, is that such fee arrangements are prohibited by USPAP because they inspire unethical behavior by the appraiser.

Since we are all appraisal regulatory agencies, we are bound to process the complaints that inevitably will result from such a business practice. If the appraisers agree to those assignment conditions, they have already violated USPAP. Whether it was Wells Fargo's idea is a moot point as far as our Board. If your friend recommends you break the speed limit, and you do it, you are going to get the speeding ticket, not them.
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I do not think XXXX should take an advocacy position on behalf of real estate appraisers; however, an advisory letter to the Comptrollers office on the above USPAP requirement, wouldn't be overreaching our mission statement, I think.
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My opinion is what Wells Fargo is attempting to do with it's desktop program, requesting a "hit" or "no hit" is a blatant attempt for appraisers to accept assignments based on pre-determined results.
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As most of you know I don't "weigh in" on most things, I sit back and observe what others are saying and doing. This group has, over the past 10 years provided me with a tremendous amount of very good advice and "food for thought" and for that I am very grateful. We have seen both good and bad times in this industry. I realize that our industry is constantly changing and evolving, some change is good and some is bad.

This current issue is bad. I only have two questions for now; 1. What are we as a group going to do about it or can we even do anything about it? 2. When the complaints start coming in (and they will) do we just accept it or do we hand it back to Wells etal and tell them that we, "Can't cure stupid"?
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After 4 years of college, 3 years of experience and years of learning, we now have the opportunity to earn $25.50 per day that won't even cover most of the fees that are required to maintain the data services that are required to complete this "product." Is this a hoax? Did they leave off the first number? A BPO is better than this. No wonder the banks have needed bail outs. This is the most insulting and incredulous thing I've seen yet.
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What a mess! Hard to be it could reach such a low. Seems like they will not be happy until they can have the value before the appraisal is completed!
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You go Frank! We are meeting today to finalize our position on this product and hope to send an email blast to our licensees shortly.
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The XXXXX Board may issue an official advisory opinion regarding this product that will address the contingent fee arrangement and advise licensees of the board’s position.

Interestingly enough, there has been no response from the fine folks at Wachovia and no defense of their "product".

From the North Carolina Appraisal Board

GUIDANCE CONCERNING DESKTOP APPRAISAL ORDERS


A new desktop appraisal product was released in February 2010. The Appraisal Board has received numerous telephone calls and emails about this product and others that are similar. Although the Board does not approve or prohibit specific forms or software used to deliver appraisal results, the Board does have several concerns about this type of assignment.


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CLICK to Read More

WHAT ABOUT THAT WELLS FARGO RVS DESKTOP APPRAISAL?

UPDATE!! - APPRAISER ACTIVE receives NASTYGRAM from Wachovia!

UPDATE #2 - JONATHAN MILLER weighs in - Will Wachovia send a NASTYGRAM his way?

This post has been modified in response to the email received yesterday (February 15, 2010) from the friendly, helpful folks at Wachovia.

This is the message sent to me by Wachovia.

Greetings,

Recently the following posts were added to your forum, the links of which are included below:

http://appraiseractive.blogspot.com/2010/02/what-about-that-wells-fargo-rvs-desktop.html

The posts include information that is confidential, proprietary, and intended only for the use of the owner of the e-mail address listed as the recipient of the original message. The posts did not include the email disclaimer originally included and is shown below for your review:

The information contained in this electronic message is confidential, proprietary, and intended only for the use of the owner of the e-mail address listed as the recipient of this message. If you are not the intended recipient, or the employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, dissemination, distribution, copying of this communication, or unauthorized use is strictly prohibited and subject to prosecution to the fullest extent of the law. If you are not the intended recipient, please delete this electronic message and DO NOT ACT UPON, FORWARD, COPY OR OTHERWISE DISSEMINATE IT OR ITS CONTENTS.

Please remove any and all posts that include the information of this email in whole or in part, as this is a violation of its intended use.

Please advise me if legal recourse is necessary to have these posts removed from your website.

Thank you,

Jose J. Ramirez

Web Developer III

Residential Valuation Services

Telephone (210)543-5921

Fax (210)543-3128

Mail Code T7400-01E

Email jose.j.ramirez@wachovia.com

Well!

In response, here is the modified post:

Appraisers across the county found a communication in their email inbox from a firm affilliated in some way with Wachovia with an announcement for an exciting new opportunity.

YAY!!!!

What did the communication say?

It described the merger/acquisition of Wachovia by Wells Fargo and the resulting creation of two appraisal groups within Wachovia Settlement Services. These are Wachovia Settlement Services (WSS) and Residential Valuation Services (RVS). These two groups apparently share resources and will continue on that path.

The communication (which, by the way, DID NOT come to me from Wachovia) goes on to describe a new "product" to be used for loan servicing ad default appraisal needs for divisions of Wells Fargo.

The new "product" is the Wells Fargo RVS Desktop Appraisal. Included was a link to a PDF with instructions and guidance for:

• Compensation
• Appraisal Requirements
• Instructions for completing the "product"
• How to submit your name and be awarded contingent fee assignments for this exciting "product"

These folks also announce that appraisal requests would start on Saturday, February 13th. SATURDAY!! What's up with these folks?

Included in the correspondence was LINK to THIS "NIFTY" GUIDE.

---------------------------------------------------------

It's yours to decide if you would like to accept an assignment from an outfit that cannot spell "APPRAISER".

It's yours to decide if accepting assignments that pay $55.00 (net $51.00) is part of the business plan you have adopted.

It's yours to decide if you believe it's safe to upload a jpg of your signature to such a reputable company.

Compliance with USPAP, however, is not a choice for the appraiser.

For starters, let's take a look at just one small problem with this offer; it's a contingent fee arrangement.

Fees (Compensation), Charges, and Service Level Agreement (SLA)

1. The fee (compensation) paid for completing this product is $55.

2. There is an AppraisalPort charge to you of $4 for each assignment completed and returned with a value.

3. There will be no fee paid for a “No-Hit”, and no charge to you for returning a "No-Hit” through AppraisalPort. (Note: This product has a “No-Hit” component which means that either it is an ineligible property type or you were unable to develop a credible value. The compensation of $55 takes into consideration that you will from time to time have a “No-Hit”. For more on “No-Hits”, see the report instructions on page 6.)

4. There will be no additional charges to you for using Data Express provided that you are only accessing the RVS Desktop Form and Location Map features. Using any other features (plat map, comps search, etc.) will result in additional charges (refer to published pricing plan in Data Express). RVS and WSS are not responsible for any additional charges that you incur completing these assignments.

5. The Service Level Agreement (or turnaround time) is two (2) days.

6. All of these reports will be reviewed by the RVS Quality Control Department and reports returned to you for correction must be resubmitted within 24 hours.

For those of you certified in Florida, it might be wise to take a look at Chapter 475, Part II, particularly 475.624 (17):

(17) Has accepted an appraisal assignment if the employment itself is contingent upon the appraiser reporting a predetermined result, analysis, or opinion, or if the fee to be paid for the performance of the appraisal assignment is contingent upon the opinion, conclusion, or valuation reached upon the consequences resulting from the appraisal assignment.

That's it for now. If time permits, we might get around to noting some other problems with this offer. In the meantime, it's your decision.

Home Valuation Code Has Improved Appraisal Quality?

Home Valuation Code Has Improved Appraisal Quality? Freddie Mac says so.

Though it is early in the process, Freddie Mac said it has seen a tangible improvement in the quality of appraisals of loans it buys since the Home Valuation Code of Conduct took effect.Patricia McClung, Freddie's vice president of offerings management, said at the Mortgage Bankers Association's convention here last week that of the appraisals the government-sponsored enterprise receives, 15% more have come acceptably close to the automated valuation model it runs as a check.

The improved quality of mortgages bought by Freddie and Fannie Mae reduces the repurchase risk for mortgage lenders because of lower defect rates, she said.

Hmmmm. Maybe we should send Patricia some of the appraisal assignment requests from Appraisal Management Companies we've seen that are accompanied by an AVM estimate, complete with Comparable Sales. Have you seen those? No wonder "15% more have come acceptably close".

Marko Berishaj, a vice president at DartAppraisal.com, a Troy, Mich., management company, said the code is not responsible for a rise in appraisal costs. He cited three factors, including supply and demand: more appraisals ordered but fewer available appraisers. In addition, he said, the cost for appraisers to comply with new certification requirements is being passed along. And finally, the requirement for a market conditions report has also added to expenses.

Is there someone out there that would like to set Marko straight?

During a question-and-answer session, one mortgage banker said that in her experience management companies are using out-of-area appraisers to do desk reviews and she has had to educate these people.

Kathy Coon, the chief appraiser at FNC Inc.,** an Oxford, Miss., technology company, replied that if the mortgage banker was using an appraisal management company but had to educate the appraiser it was time to find a different company. But another mortgage banker in the audience countered that, as correspondents, they do not always get to choose which appraisal management company to use. Otherwise, it would be easy to switch, he said.

**(Appraiser Active) They can call themselves whatever they want, but they're still an AMC

Yeah, it's working out just great. Here is another point of view. It's a firsthand accounting of an appraisal saga by a reporter for the Atlanta Journal Constitution.

My $290,000 home’s worth what?

This is a story of how my $290,000 home was appraised for $115,000.

The tale begins in 2004, when my wife and I decided to buy a three-bedroom, two-bath 1920s bungalow in Ormewood Park in southeast Atlanta. It had been lovingly renovated by the previous owners, who’d also added a new master bedroom and dining room.

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The appraiser hired by the lender, Wells Fargo, took measurements and shot several photos as he tromped through our toy-strewn house.

He jotted a few things down on a form and left.

We put it out of our minds until mid-June, when the appraisal results arrived in the mail. I couldn’t believe what I read.

How could our house, purchased just five years before for almost $300,000, be worth just $115,000?

Didn’t the appraiser notice the pristine renovation? The original fireplace? What about the high ceilings, the plantation shutters, hardwood floors, granite counters and the spacious master bath?

Another shock: The $115,000 valuation was far below what our home had sold for in 2002, before being renovated and enlarged.

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In the meantime, I scoured the report to try to figure out what had happened.

The appraiser used three recent sales in our area —comparables — to generate what he deemed our house’s market value. But two of those sales were foreclosures. One nearby house had sold “as is” for $129,000. The other, located on a traffic-clogged main street a half-mile and a world away from our quiet street, had gone for just $80,000.

I decided to check on the higher-priced home. Its new owner welcomed me inside and showed off its handsome hardwood floors and shiny stainless-steel appliances. But he laughed when I explained why I showed up on his doorstep.

When he’d bought it, he said, the house was in terrible shape. The floors were covered with damp, mildewed carpet. The water heater was broken. Someone had ripped out and stolen the appliances. The kitchen sink didn’t work.

He’d fixed it up nicely, though it lacked the back porch and dining room our home has. But still, our bank’s appraiser had valued our home much lower than his — before he’d made any improvements.

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A Wells Fargo spokesman said the company takes appraisals very seriously.

Well, YES, you DO! I wonder what the AVM that went along with that assignment request from the Wells Fargo affiliated AMC indicated the property was worth?

Read the whole thing.