Broker access to appraisal reports severed

Broker access to appraisal reports severed

Broker access to appraisal reports severed

 

One Barrie broker found himself out of the loop on his appraisers’ reports, only to learn that his appraiser had been told only to deliver reports to the lenders.
 
“We received six or seven emails this week confirming that the appraisal has been sent to the lender, along with the value of the property – but we never got a report,” says Nick L’Ecuyer, principal broker at Verico The Mortgage Wellness Group in Barrie. “So we asked one of the appraisers for the report, and he said ‘I can’t.’”
 
The appraiser told L’Ecuyer that he had been sent a communication from the Appraisal Institute of Canada to “no longer send to brokers” any appraisal reports.
 
“Is it because the broker’s integrity is being question, or are they just removing brokers from the process?” asks L’Ecuyer.
 
“That is not the position at all,” says the Director of Professional Practice Nathalie Roy-Patenaude at AIC. “The Privacy Commissioner has ruled that appraisal reports contain personal information, and as such any personal information has to be redacted if made available to a third party.”
 
Roy-Patenaude explains that appraisal reports are created for two parties – identifying the client (prospective buyer or owner) and the intended user (the lender) as the only ones allowed access to the document. 
 
“If the broker wants a copy of the report, they must have written permission from the client and the intended user,” she says. “This has always been the case.”
 
L’Ecuyer has so far been able to gain access to the reports by contacting the lenders, who have been accommodating in sharing the information. For L’Ecuyer, it is frustrating for the brokerage as it looks to properly service clients without access to an appraiser’s report. Generally, the borrower hasn’t received copies of appraisal reports.
 
“If a lender comes back and says, ‘This won’t work’, how do we know why it won’t work? All we can do is go to the next lender, and then another appraisal is needed – and we won’t have access to that appraisal either,” he says.
 
Roy-Patenaude thinks that the difficulty L’Ecuyer is having may just be in how the request for appraisal is being presented.
 
“Maybe it is a case of something getting lost in translation. It is necessary for every broker to comply to our standards of practice,” she says. “If he has been told by different appraisers in just one week, I think this may be the case.” 
 
So far, it has only been small, individual appraisal companies that have not supplied a report, says L’Ecuyer.
 
“NAS (Nationwide Appraisal Services), Solidifi and BrokerWorx have so far been providing reports,” he tells MortgageBrokerNews.ca. ”But who knows for how long?”
 
The Appraisal Institute of Canada (AIC) was founded in 1938 and is the premier real property valuation association in Canada. With approximately 4,800 members across Canada and around the world, the AIC works collaboratively with 10 affiliated provincial organizations.
 
22 Comments
  • David Grossman 2013-03-25 9:58:23 AM
    this is interesting and a potentially very serious issue. i have heard of borrowers not getting a copy of the report even though they have paid for it, but never the broker. there are a number of rules or ettiquetes around the issue of appraisals, what information can be released, how, and to whom. this matter warrants further attention. thank you for bringing this issue to light mortgagebrokernews.ca. sincerely http://www.alltalktv.com
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  • Ad Lakhanpal, Broker,Mortgage Alliance 2013-03-25 10:15:36 AM
    My understanding has been that the appraisal belongs to the person who ordered it, which in most cases is the broker. Many times I would order an appraisal, and based on that,decide on which lender to send the deal to. When the lender approves, I ask the appraiser to formally direct a copy to them. If a policy comes about where the broker does not get a copy,it will become a major hindrance to our business.
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  • Joan E. 2013-03-25 10:22:22 AM
    I do not think that this is as large an issue as people think... For years there have been issues with Brokers who order appraisals and "ask" for a certain value, and far too many appraisers are more than happy to oblige, since the broker is the one ordering the appraisal. An appraisal is supposed to be an impartial valuation of a property, and it is inappropriate for any broker to try to influence the outcome of the report. Some mortgage brokers profess to be experts at all aspects of the business, but in my decades I have talked to literally thousands of brokers who have barely basic understanding of the property valuation process – they only look at the bottom line dollar value, and what that means to their commission. In the end the property either fits the lenders guidelines or it doesn’t, sure lenders should tell a broker why it does not fit, but brokers need to accept the fact that mortgage companies are lending out their money, they decide who gets to borrow it. There are too many brokers in Canada that have this twisted thought process that they should get to decide, and with programs like the Street Capital house accounts, some of them do.
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