6. You Must Have Been High

 (Original Blog Text Posted in 2007 by Gary E. Geraci, hyperlinks added this posting - Actual names and addresses redacted by author, April 2012.  Where indicated, all dates and case numbers are authentic and can be retrieved under Federal Open Records law.)

“You must have been high.  You must have been sooooo high.” -The Pot/Tool-

E-mail receipt of a formal complaint written December 15, 2005 to the Federal Trade Commission.  Complaint submitted via the Appraisal Institute’s “Appraisal Independence Action Center” complaint portal.

Gary Geraci

From: Appraisal Institute [xxxxx@appraisalinstitute.org]

Sent: Thursday, December 15, 2005 11:43 AM

To: Appraisal Institute

Subject: Appraisal Independence Action Center -- FTC

December 15, 2005

[recipient address was inserted here]

Dear [recipient name was inserted here],

I am a real estate appraiser and I wish to submit a complaint against a non-bank mortgage lender.

The complaint is against:

XXXtrust Mortgage

8330 Any Blvd. STE 130

Anytown, VA 22182-2624

And

Ms. K. N.

XXX Trust Mortgage, Inc

8105 Any Court

Anywhere, VA 22102

Phone: 703-xxx-xxxx

Fax: 703-xxx-xxx

And

BIG Corporation (AMC) South

1063 Any Park Drive

Any Other, VA 23059-4500

Phone: xxx-xxx-xxx

FAX xxx-xxx-xxxx

RE: xxxx Ranch Road 620, Unit xxx, Austin, TX 78734

Complaint: Appraisal Supplantation without Cause

Brief Summary:

Complex property assignment involving highly publicized construction defects, lawsuit, mass eviction, and major re-construction received from BIG, an Appraisal Management Company (AMC). Negotiated a higher fee to provide just compensation for the added complexities.  Clearly communicated due diligence requirements that would need to be performed. 

Approval received from both BIG and XXXtrust Mortgage.

Request engineering report so as to better understand the defects, time-lines, the scope of work to remediate, the probability of ongoing costs, etc, so as to determine probability of higher than Market Special Assessments.  Conducted inspection. Informed shortly thereafter of the properties closing date-just 5 business days from our inspection date.

Continued requesting engineer report that buyer’s representative stated she could provide. 

On 3rd business day since inspection, Ms. K.N., loan production officer of XXXtrust Mortgage left multiple voice mail recordings announcing her displeasure with appraiser methodology. In one such message she stated her prominence as “Top Producer” with

XXXtrust Mortgage. She went on to threaten appraiser by pointing out prospective borrower, Mr. M.D., is related to an executive of BIG. She was prepared to send a “mass e-mail” to BIG if appraisal process continued to impede her time-line. 

Continued to receive multiple calls from every member of the buyer’s team: Ms. K.N., Ms. P., Mr. M.D., and the title representative. 

Numerous requests now made for engineering report including call to engineer.  On the 5th business day since inspection, appraiser received a recorded message from Mr. L.L., the engineer of record for the project.  On the morning of the 6th business day since inspection, appraiser conducted full telephone interview with both the engineer of record and a representative/member of the Condominium Owners Association, Ms. M.S..   

Appraiser learns of a 2.5 million dollars shortfall the condominium owners are responsible for. Amount was borrowed and must be paid back by the owners through Special Assessments.  Without a doubt, this is information of the type, when properly disclosed to potential buyers and Realtors, can create negative perception.  Property value diminution is highly probable. 

Several hours after updating BIG of these latest findings and progress, we learn

from BIG the assignment had been cancelled earlier in the morning at the request of Ms.K.N. of XXXtrust Mortgage.  Ms. K.N. states to Ms. P.P. of BIG that another appraiser was hired and completed appraisal report in less than 24 hours.

Ms. K.N.’s decision to supplant our report is without cause. We clearly communicated complexities, and due diligence requirements.  Every effort was made to complete a credible, reliable, and adequately researched appraisal report.  The independent, third party provision of the appraisal process is violated when a biased, loan production agent

can make the decision to supplant appraisers and appraisal reports when the direction of the appraisal is deemed not to favor a desired outcome.  Ms. K.N. violated appraiser pressure regulations by calling appraiser and making threats to harm appraiser’s reputation with BIG.

We urge a complete investigation.

Sincerely,

Gary Geraci

512-xxx-xxxx