Abolish Bank Owned Management Companies sign now

We beseech the U.S. congress to propose a bill mandating the abolishment of bank owned/ affiliated and/or contracted management companies for the following reasons:

Appraiser Independence (per FIRREA law) does not exist as bank owned management companies have an interest in the outcome of the transaction.
Management companies control the appraisal ordering process, negating appraiser independence, and coerce appraisers to obey their whim. Furthermore, management companies do not accept appraisal work from appraisers that do not tow the line and do what the management companies dictate.
Bank owned/affiliated and/or contracted management companies deceptively state appraisal fees of $500+ on closing statements, and abate a small portion of that fee (as little as $150.00) to the appraiser. As a result, said management companies are not providing Truth in Lending and are profiting on each appraisal fee (which is a clear conflict of interest).
Management companies dictate to the appraiser their desired value, in addition to unreasonable (if not impossible) turnaround times for job completion. A minimum of one week is needed to complete appraisal assignments (residential assignments), accurately, with ample time to research/inspect and verify information, and to complete appraisal assignments already in process.
Many bank owned management companies are now filing bankruptcy in an attempt to hide behind a corporate veil. Consequently, appraisers are not paid on jobs performed. Accordingly, said management companies are retaining the appraisal fees and in no way independent of the transaction.
Bank owned/affiliated and/or contracted management companies are not fiduciaries to a transaction, but are interested parties of the first part.
In addition, management companies are price fixing appraisers fees. This collusion by lenders/bankers/appraisal management companies is contrary to anti-trust laws.
Appraisers who are not on key lenders (management companies) approved lists cannot receive work from clients in the mortgage community (mortgage brokers/realtors), which puts appraisers out of business.
Damage to PRINCIPALS (buyers/sellers) occurs when substantial money paid to management companies for appraisal fees are lost, if/when; the bank (who controls the management co.) decides to not fund the loan. The principal then wants the appraisal report (which the management company routinely refuses to give to the principal) - hence, the ensuing obstacle created via the next BANK owned/controlled mgmt co. (who subsequently refuses to take the report from the appraiser who is not on their approved list), creates havoc and chaos in endeavoring to fund the principals transaction.
Accordingly, damage results in foreclosure to the principal if they are facing a balloon mortgage or a lapse of contract; and once expired, the transaction can fall apart. Either the principals deposit or equity will be lost, as trade has been restrained for the principal.
The actual client (mortgage broker or Real Estate agent) is forced by the lender to order a NEW appraisal, as the management company steers the client (mortgage broker/or Real estate broker to their approved appraiser) - unnecessarily creating time constraints and extra fees contrary to the FIRREA anti-discrimination appraiser law Chapter 564.5-6, which management companies openly, defiantly, and routinely violate.
Summary: Results of this illegal restraint of trade by lenders/management companies are:
1. Appraisers lose the relationship between the mortgage brokerage/real estate agent client and their fee, and accordingly their livelihood.
2. The mortgage broker/Real Estate agent in many cases will lose their commission, along with their client.
3. The principal will lose the appraisal fee and/or their property.
ABOLISH and OUTLAW bank owned/affiliated and/or contracted management companies.
We believe this will restore integrity to the real estate profession (appraisers, mortgage brokers, title companies, etc.) and allow free trade and commerce among ethical professionals.

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Patsy RobertsonBy:
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U.S. Congress

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