Fortunately, the lender smelled a rat.
This week a lender sent an appraisal order to me. The lender that contacted me received a loan request accompanied by an appraisal done for another lender. The other lender had rejected the loan application.
The first appraiser had produced an appraisal that was about 15% higher than what current market value is for the subject property. The second lender, who asked me to do an appraisal, wanted a second opinion of value. That is where I came in.
The lender received my appraisal and called me. They thought that the other appraiser had a high value conclusion. But, were surprised at the large difference between the first appraisal and my appraisal.
When I was called by the lender to discuss my appraisal, it was discovered that the first appraiser made no adjustments for market concessions. And, in each case, there were concessions in the $6,000 to $10,000 range. (Those would be downward adjustments to the sales price.)
Also, there was one sale that occurred in the subject plat during the last six months. It was a house very similar in age, style, location, condition, everything, as compared to the subject. The first appraiser left that sale out of their report. Apparently that sale did not support the value conclusion they were looking for.
This kind of appraisal work is common. If you want fraudulent appraisal work done, you only need to keep calling different appraiser’s phone numbers. You will find the appraiser who will do what we call “custom work.” That is, work done with a preconceived conclusion. Then the appraiser delivers a fraudulent report to support the preconceived value.
Has this appraiser not read the morning papers????? This is not the environment to be proffering fraudulent appraisals.
I do work for “Great Big National Mortgage.” You know their name. They told me they have a national V.P. that is in charge of watching over the loan officers. If the loan officers even call the appraiser during the appraisal process “Great Big” National will fire the L.O. Yikes!!!!!!
I also do work for “Great Big National Bank.” You know their name. They will only accept one appraisal on any loan application, and that’s it. They have a strict follow up procedure to review appraisals. But, no one tosses out an appraisal and says, “Let’s get a better one.” “Great Big” also reviews us appraisers regularly. They know who we appraisers are and if they can trust us.
As the new regulations that affect the appraisal industry are put on the books, we appraisers will not be able to stay licensed if we do such “custom” work.
And that is a good thing.
Pacific West Appraisal Services, Inc.
pwas.net