Blog

Tuesday, April 15, 2014

Thinning wallets and dwindling fees for work performed are nothing new for the appraisal community. Yet in their latest income-reducing move, AMCs have sparked an outcry by requiring appraisers to foot the bill for additional services. These charges are further cutting into appraisers’ fees, which already suffer from AMC management fee deductions.

Recently, FREA uncovered three hidden costs being introduced by AMCs – which of these have you experienced?

 

Technology Usage

An increasing tendency among AMCs is the passing of technology fees on to appraisers. When an AMC orders a home valuation, the appraiser must submit the report through the AMC's authorized software. However,...

Monday, April 14, 2014

For the six government agencies (FDIC, Federal Reserve, OCC, CFPB, FHFA, NCUA) who banded together to issue the recent proposed set of rules for Appraisal Management Companies (AMCs) it’s report card time! (To see the full press release from the FDIC click here)

For the purpose of this report card we will use a standard grading system of A-F and explain our grading and point out additional, important questions the proposed rules raise that are as yet unanswered.

1)    Register in the state and be subject to its supervision.

-       This is a great start. We agree there needs...

Tuesday, April 1, 2014

A recent case out of San Diego County underscores the importance of clearly outlining the scope of your inspection in your inspection agreement.

In that case the plaintiff, a 20-year old male college student was visiting friends, who were also college students, at a home they rented near San Diego State University. The plaintiff decided to participate in the sport of Parkour, utilizing a free-standing six foot concrete block wall located in the home’s backyard. (“Parkour” is defined as the sport of traversing environmental obstacles by running, climbing or leaping rapidly and efficiently). 

When the plaintiff attempted to pull himself onto and over the wall,...

Tuesday, March 25, 2014

If you are a real estate professional, please read this, especially if you fear your own business is being damaged by all of the new regulations designed to “help” the real estate industry recover.

Imagine you, a hardworking, law abiding taxpayer, are sitting at home one evening watching television when there is a knock at your door. Somewhat surprised by the late hour of the visit, you get up and open the door and three IRS agents barge into your home and declare, “We are from the IRS and we are here to help.” I think it’s safe to say you would be both...

Tuesday, March 18, 2014

Here on the FREA blog, we recently ran a two-part series on blacklisting that brought to light the serious and long-term ramifications of being placed on a “do not use” list by big banks and AMCs. In response to Part 1 of the series, we received an email from a FREA member who expressed his concerns with the changes and trends taking shape in the appraisal industry. With permission, we’ve reprinted his exclusive letter to the editor, in which he further explains the underlying issue of being denied access to client communications, relates the struggles of today’s appraisers, and suggests a call to action...

Tuesday, March 11, 2014

This article will provide an overview of what to expect when the unthinkable happens and you have been sued. Each specific lawsuit is different, but this will provide general parameters of what you can expect and what your obligations are.

                              

Don’t Ignore the Summons

In order to initiate the lawsuit, the plaintiff will serve you with a Summons and Complaint. The Summons alerts you to the fact that you have been sued and the Complaint contains the allegations against you and any other parties named...

Tuesday, March 4, 2014

In September of 2013, Joe Appraiser (not his real name) was notified by one of the big banks that he had been placed on ineligible status due to an incorrect review. Immediately, Joe contacted the bank regarding his placement on the “do not use” list believing this was all a simple mistake. In hopes of reversing his eligibility status, Joe submitted a detailed rebuttal where he provided a line-by-line response to each alleged deficiency in his appraisal report.                                                   

In part 1 of our series on blacklisting, we talked about the process Joe Appraiser went through to be reinstated using his FREA Professional membership...

Tuesday, February 25, 2014

When a lending institution loses confidence in an appraiser’s work, the bank or AMC will put them on a “do not use” list, also known as a blacklist.

In some cases, this means an appraiser has made a costly mistake. However, some banks are taking blacklisting to an extreme by treating appraisers as guilty until proven innocent without cause or reason why.

If unchallenged, this practice can be devastating because being blacklisted even once can have permanent detrimental effects on an appraiser's career, income, and reputation.

By engaging in blacklisting lenders are trying to insulate themselves...

Friday, February 21, 2014

Recently it has come to our attention a firm called Savant Claims Management from Plano, Texas is mailing letters to appraisers alleging damages from old (2007 and older) residential appraisals. The claim letter is being sent on behalf of an alleged investor called First Mutual Group, LP which claims to be the successor in interest to one or more failed lenders. The letter is not signed by anyone and gives no contact name whatsoever.

...

Monday, February 17, 2014

We recently spoke to an adjuster for a homeowner’s insurance company that is asserting a subrogation claim against the inspector's E&O policy. In our opinion the adjuster is trying to squeeze some money out of the inspector’s E&O carrier because the  insurance company the adjuster works for had to pay a claim made by the homeowner.  What makes this claim so crazy is that the inspection report in question wasn’t even written for the homeowner that reported the claim. The inspection was for an entirely different potential buyer who elected not to move forward and walked away from the deal.

Subsequently, another potential buyer appeared and was...