Who do you report a revoked license to?
I was not aware that reviews of appraisals are being done for 2005-2007 to determine if any violations took place, over valuation, fraud. If you go to the original post you will get more of an explanation as to what Mr. Ferris is talking about.
This is rather like closing the barn door after the cows have already gone out to play. And we know that many of the appraisers were told to make it work, knew that their livlihood depended on it.
So, my real qustion is, after this is done will there be independent reviews of the lenders themselves? Or is this nothing more than the lenders trying to pin the blame on someone else. And will the scope of investigations move to include real estate agents?
And boy oh boy does this mean that E & O insurance rates will go up for all of us?
I have heard stories from mortgage people who were told to just get 'er done, at all cost. They knew the product they were hawking was risky at best. Will these guys be under the microscope too?
As I am completing so many reviews these days, for appraisals completed in 2006 and 2007 – it is a curious finding to come across a really poorly developed appraisal……only to find that the appraiser no longer has a valid license.
In one sense, it makes the job easier – as I don’t really have to report an appraiser who has already had their license revoked! After reviewing the appraisal…it is clear to see WHY the appraisers (both registered trainee license and the supervisory certified appraiser) no longer have a valid license here in the state of Florida!
On the other hand – it is a wake up call to all to keep that E & O insurance policy in effect! In this case – the client suffered a major loss! The appraised value in July of 2006 was $480,000 according to these appraisers. The current sale of the home in 2009 - $175,000. The amount the home was over valued as of July 2006? $150,000!
Who do you think the lenders will be looking to for losses exceeding $100,000? Even if you no longer have a valid license…I wonder if you can still get sued for the financial losses? And if you didn’t maintain and “tail coverage” with your insurance….will you be PERSONALLY liable for the loss? Or at least be defending the lawsuit on your own?
Make it a GREAT day!
AUTHOR: Richard D Ferris - AmcAppraisalsinc.com
Phone 877-789-5249 or email me: richard@amcappraisalsinc.com
Richard D. Ferris
AMCAppraisalsinc.com
richard@amcappraisalsinc.com
(877) 789-5249
One # Does It All - Voice/FaxResidential Appraisals in Lake, Orange, Osceola, Polk, and Seminole Counties.
Also servicing Deltona, Deland, and Orange City in Volusia County.
Florida State Certified Residential Appraiser #RD4088
FHA Certified : Associate Member Appraisal Institute
Andrea, excellent post and subject... I don't think a revoked license protects anyone from being sued... after all they were under the license at the time the wrongful behavior happened (notice I said wrongful), instead of unethical, fraudulent... Boy O boy --- when are we going to put all this behind us. Can I come back and comment after the holidays? This could be a very serious discussion.... Merry Christmas to you and your family, enjoy!
Ellie, you can come back anytime, but I think this one won't garner many comments. Perhaps no one thought it was as interesting as I did, or the holidays are keeping everyone busy, I just don't know. Scary though.
Andrea...
Your explanation is spot on. That is exactly the way appraisals played out in years past. And any appraiser that didn't play ball would NOT be getting very much work.
Richard, and now they are going to pay for this? Wow, and when will the gun be turned and fired at us?
When a mortgage defaults, an audit of the loan is performed. It's know as a forensic audit. An underwriter in that department picks apart the loan to see if the loan really did meet all program guidelines in effect at the time the approval was given. Reviewing the appraisal is one thing that is commonly done.
This is done to see who gets the joy of now being stuck with an REO property to take a loss on and sell.
Rodney, thank you for your explanation. I still think it is a bit late for this, what good will this do when we all know that there were lenders who pushed for certain prices.
I see multiple issues here, that's for sure.
Andrea - thanks for reblogging this - appraisers under scrutiny? Most I know are excellent. When will all of this settle down a little?
The name of the game now is who is going to absorb the cost of the buyback of the foreclosure. The current lender, or who backed the loan (i.e. Fannie Mae, Freddie Mac, FHA, or an MI company)will try to push it back to the originating lender if they can determine that an underwriter overlooked something critical. In the case of appraisals, they are trying to determine if the underwriter accurately reviewed it.
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Andrea Swiedler
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