Much-maligned appraisal management company fires back at naysayers

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The president of the country’s largest appraisal management company welcomes broker feedback.

“For us to get feedback from the broker community, that’s logged into the system as well … if they are reported they are investigated,” Tom McCormick, president and CEO of The Nationwide Group, parent company of Nationwide Appraisal Services (NAS) told MortgageBrokerNews.ca “ If the broker has any information he wants to share with us, we’re open to that.”

Brokers have complained that appraisal management companies, such as NAS, cost the client more money (by $50-$70, according to one broker estimate), slow down the home buying process, and often result in an inferior appraisal; added steps and costs with no added benefit of more oversight.

“Every time I've had to use NAS [or] Solidify, I’ve had nothing but issues,” one broker wrote on MortgageBrokerNews.ca. “Late appraisals, cost issues, no communication, never made it to the lender, etc.”

When asked, McCormick wouldn’t address these concerns specifically.

“It’s really hard to respond to hearsay,” McCormick said. “Once the appraisal gets put into the system it is tracked thoroughly and brokers can always see the status, they’re always notified of any delays and once the appraisal is complete.”

McCormick did provide clarity on how the process works. The company only uses approved appraiser lists that have been provided by lenders and it has implemented appraiser matrix measures to ensure quality and efficiency.

It also ensures appraisers are properly licensed and carrying the proper insurance.

NAS ranks appraisers based on lender, broker, and client feedback, according to McCormick.

“We create a lot of efficiencies for appraisers by keeping them in their local jurisdictions,” he said. “What we do on the back-end of the systems once we have appraisers in the system is we rank them based on the lender’s previous experience with the appraisers.”
 
  • Mike on 2015-05-11 9:39:13 AM

    I love NAS, you pay more but they use new, inexperienced appraisers who really don't understand the market or the differences in the areas and types of houses so you tend to get the value you need instead of the real value. Personally lenders are crazy to use them but certainly worth the extra $75 to make deal work. Great set up Tom!!

  • MT68 on 2015-05-11 9:44:56 AM

    NAS, Solidifi and others must do more to twart appraisers who try to rape you with upcharges for idiotic reasons like "executive home." It seems like every fricken appraisal in Toronto comes back with a $75-150 upcharge request. It is totally baseless to try and milk brokers for more money just because the property is over $1 million. Hello appraisers. Newsflash for you. Almost every single family house near the downtown core is over $1 million. Don't give us that "extra liability" crap either. Your E&O covers $2 million houses just like it covers a $500,000 house.

  • Derrick Foster on 2015-05-11 9:46:58 AM

    Let's see .....ummm.
    Don't carry E & O insurance and don't stand behind the appraisers work. Use a list of accredited appraisers we could access on line off the lenders list.
    Cost extra for what amounts to simply passing on a lead and more often that not having to have us contact the client for them as they can't get hold of them after 5pm.
    Overall I do see the value added service they provide :)

  • BobW on 2015-05-11 9:47:10 AM

    We find the system works, but we do find it frustrating and generally more expensive for the client vs alternatives. We regularly accept a quote only to see an additional $45 up-charged a day or two later usually due to mileage.

  • Kim Gibbons on 2015-05-11 9:51:04 AM

    I believe it is about time that we shine a spotlight on NAS and other Appraisal management companies. I have an actual request (so not hearsay), to prove the fact that there is a problem with this system and a problem for resolution when it comes to communicating with the Broker. Had NAS organize an appraisal for a detached luxury home in Toronto that had previously been appraised 4 years earlier at 1.2 million (before extensive renos). 4 yrs later and a NAS approved Appraiser appraises it for 915k. MPac shows a value of 1.28 million. I request a review and they come back and say we are sticking with our value - no explanation. I order another appraisal and it comes in at 1.4 million, go back to NAS and request a review and possibly a reimbursement for the previous appraisal as I basically just threw money away on the 1st appraisal. Crickets... Did not hear back and I requested a response several times. Tom, if you would like to follow up with me on this now I would welcome it. 416-400-8107

  • Gary on 2015-05-11 9:53:21 AM

    Dealing with NAS and others is just not the way to do business or be in control of your deal. Handing off such an important part of the transaction to a group of individuals that are not involved directly makes no sense. I would rather contact the appraiser directly, and arrange the appointment--especially on refinances. That way there is no misunderstanding or unnecessary delay from "telephone tag"... arrangements for payments are completed, and you know the job is being done. The appraisal itself will tell the story. McCormick's own appraisal company was always great to deal with, but after calling and being told I have to go through NAS...Sorry Tom.

  • john pasley on 2015-05-11 9:57:49 AM

    NAS,Solidify are once again just middle men squeezing the appraiser and the client.This was a result of the lenders taking the decision from the local branches in the name of efficiency not quality.I'd rather pay the appraiser more locally than let it go for the lowest bidder and get an inferior product from an inferior appraiser.

  • Rosemary Madden on 2015-05-11 10:14:30 AM

    We can complain all we want about Solidify,NAS but are the lenders listening. They are the only ones who can make the changes so we have to go direct to the lenders, they are the ones who have adopted this system so if they don't' take these issue's seriously this will continue to be an ongoing problem with no clear resolution.

  • marvis on 2015-05-11 10:52:37 AM

    I actually really like Solidify------have used them exclusively for 3 years--like the updates--the ease of having client pay so I don't have to collect---old appraisals are on their web-site for years--the help desk is very **helpful** & you always speak to a live person--I'm not searching for a contact away from my area--you can email report directly from site--& with most lenders still get to pick your favorites.
    There was a ton of fraud with certain brokers & banks cherry picking --the system isn't perfect--but--I understand the need.

  • Hal on 2015-05-11 10:58:01 AM

    I had an appraisal done on a house by NAS, and the appraisal came in at $370,000. Just 2 months later, the same house was appraised by NAS - different appraiser - at $330,000. Nothing material changed in the house or the market during that time.

    We used to be able to choose reputable appraisers. Now we get stuck with the inexperienced ones who sometimes don't even bother measuring the house.

    And don't get me started on the upcharges for acreages or driving to the suburbs.

    And Tom, call me at 780-968-5332 if you would like to discuss this "real issue" - not hearsay.

  • Mario on 2015-05-11 10:59:56 AM

    What about the management company also assigning to the appraisal firm they OWN! How is that allowed?!

  • Hal on 2015-05-11 11:05:07 AM

    I had an appraisal done on a house by NAS, and the appraisal came in at $370,000. Just 2 months later, the same house was appraised by NAS - different appraiser - at $330,000. Nothing material changed in the house or the market during that time.

    We used to be able to choose reputable appraisers. Now we get stuck with the inexperienced ones who sometimes don't even bother measuring the house.

    And don't get me started on the upcharges for acreages or driving to the suburbs.

    And Tom, call me at 780-968-5332 if you would like to discuss this "real issue" - not hearsay.

  • marvis on 2015-05-11 11:16:44 AM

    I should mention I tried to use NAS--it was a nightmare--only offered one choice for appraiser & he was a week behind---I only like Solidify :)

  • Jivan Sanghera on 2015-05-11 11:33:13 AM

    I had a NAS appraisal in the Niagara Region charge 200 dollars in extra fees. 1 was a rush fee of 100 dollars, the other was 100 for an executive home. The property value was 490k! Last i checked that doesn't qualify it as an executive home.

  • Jivan Sanghera on 2015-05-11 11:33:20 AM

    I had a NAS appraisal in the Niagara Region charge 200 dollars in extra fees. 1 was a rush fee of 100 dollars, the other was 100 for an executive home. The property value was 490k! Last i checked that doesn't qualify it as an executive home.

  • Paula Siemens on 2015-05-11 11:51:19 AM

    I had a deal with B2B and had to use NAS for the appraisal. It took weeks to get the report. The party hired by NAS did not work full time...I had to call their support line 3 times to follow up on the report status. Needless to say I was very unimpressed.

  • Mel on 2015-05-11 12:09:53 PM

    I object to them padding the fee. I had an appraisal here in London where the appraiser was paid $350 and NAS charged the client $495. Perhaps that's what they mean by "efficiency". I passed this on the the lender, in this case MCAP Eclipse, and like someone earlier said ... crickets.

  • BobW on 2015-05-11 12:20:00 PM

    Many of our mortgages are obviously in the Halton Region that comprises of Rockwood, Acton, Erin and Georgetown. With lenders not updating their appraisal lists as regularly as they used to, (since they rely on NAS, and Solidify) we seem to be looked upon as an under-serviced area. This could not be further from the truth, as we do have some very good local appraisers to choose from. The current lender solution is for us to use NAS or Solidify appraisal and then have our clients deal with all of these additional fees previous posters elude to. The cheapest appraisal fee we typically see is in the $345 range and they go up from there.
    Usually with increased efficiencies, wouldn't you see cost reductions go hand in hand?

  • Steve on 2015-05-11 12:27:39 PM

    Trust is a huge issue. If you don't trust a system that assigns random appraisers of varying degrees of competency etc equally, then its definitely the broker that is crazy.
    System lacks accountability for bad appraisers. Bad appraisers always have time for NAS because reputable appraisers are busy with organic requests from people who know them. The people that know non-reputable appraiser are not calling them... just NAS
    As for the process, I hate unreasonable upcharges, hate billing for "seniors" and people without email addresses - I end up paying because it is too hard to get the client to pay, I hate not being able to choose a short list of appraisers, I hate delays and intimacy of knowing who you are calling.
    those are my thoughts.

  • Steve on 2015-05-11 12:28:04 PM

    Trust is a huge issue. If you don't trust a system that assigns random appraisers of varying degrees of competency etc equally, then its definitely the broker that is crazy.
    System lacks accountability for bad appraisers. Bad appraisers always have time for NAS because reputable appraisers are busy with organic requests from people who know them. The people that know non-reputable appraiser are not calling them... just NAS

  • Steve on 2015-05-11 12:28:57 PM

    As for the process, I hate unreasonable upcharges, hate the billing system in place for "seniors" and people without email addresses - I end up paying because it is too hard to get the client to pay (Just call the client... just call, please just call), I hate not being able to choose a short list of appraisers, I hate delays and intimacy of knowing who you are calling.
    those are my thoughts.

  • Ross Kay on 2015-05-11 1:14:30 PM

    Acquiring a mortgage in 2015 should be approached in the best manner possible and least of the mortgagees concerns should be paying a couple hundred bucks extra.

    There should be 3 valuations completed on any property to ensure accuracy and optimum rates being achieved:
    1) FREE Opinion of Value in writing provided by their REALTOR.
    2) Complete Appraisal independent of Bank or Facilitator influence.
    3) Complete Appraisal from required sources.

    The cost should be under $800 to get these 3 appraisal values. This gives the mortgagee full control of the process and enough information to make an educated decision.

    It's time Mortgages are stopped being looked at as "we are approved ;)" celebrations and return to being viewed as an investment.

    A Mortgage is the real investment contained in real estate because that commitment is enshrined and unchanging with market conditions associated with home valuation.

    If upon renewal property values are lower by 20% and the mortgage principle is only 5% lower than at origination, then a 15% risk cost needs to be understood.

    Appraisals mitigate the risk for the mortgagee as much as the lender, as an accurate and even 3,5, 10 forecast of value provided by a professional allows a rational decision to be made.

    NAS and Solidify are the new reality and the independence mortgagors gain from the appraisal process is something that will never disappear going forward. No Risk Officer at any Bank would approve going back to bank sourced appraisals.

    Let face it calling an appraiser to try and get their appraisal boosted only shows how incompetent the appraisal was fulfilled. The moment a call is justified the Appraisal Fee should be under the scrutiny of a possible refund agreement.

    A quick review of a military Relocation agreement and appraisal process is a wake up call to all those unfamiliar with the mortgage lending process in it's fullest as applied to appraisals.

  • James on 2015-05-11 1:41:36 PM

    LMAO...what did you expect them to say? We are useless, bloated and over rated?

    Here is a true story with Solidifi
    - rush order on Thurs. Charged an extra $120
    - It is now Monday and the ppty has NOT yet been visited.

    So, who keeps the $120? Does the appraisal company actually see that or a portion of that?

  • Michael Rice on 2015-05-11 1:52:56 PM

    As a Lender I've had good success in dealing with appraisal management companies. I don't see what the problem is? The Lender is taking the risk on so they should have control over the valuation method. We have chosen our approved appraiser list and there are one price options out their if upcharges are an issue. Most brokers we deal with have accepted the use of 3rd party appraisers but I suspect they would want to use their own. However if somebody was lending their own private funds, would they want somebody else in control of the valuation or would they want to be in control; I suspect the latter. I find the majority of brokers use the system well. When I investigate issues of broker related problems it's usually because they haven't taken the time to understand how the system works, which is usually a 20 minute glance at the training manual or video. Yes appraisers make mistakes working through appraisal management systems, I don't disagree however, there are similar issues with appraisals ordered direct as well. We have full confidence in NAS and are pleased with their services.

  • Guy Lew on 2015-05-11 2:06:51 PM

    The horror stories of NAS, everyone has one and I just got one right now. TD appraised a property in November 2014, client invested $60K of additional renovations to the home and now would like to re-finance their mortgage to get their renovation money back. First NAS quotes $295 and then adds $300 as additional fees and NAS appraises the home for $40K less after the renovations. So the house is now worth less money after it is fixed, gouged the client at the same time....wow....reverse logic, you wonder if they even pulled a Teranet report. When the clients called to complain, they hung up on them. Great service, great deal killers. I question why lenders use NAS at all. Maybe it is time to boycott NAS and request lenders to start blacklisting them.

  • Mel on 2015-05-11 2:07:57 PM

    So, Michael Rice. I see you're open to honest feedback then ... You seem to be forgetting that it's the broker's option as to which lender he matches his client with in the first place. Who are you with, I'll have to store that in my memory banks?
    When these companies first appeared on the landscape the main selling point was that it was going to be less expensive FOR THE CLIENT. So much for that idea.

  • Mel on 2015-05-11 2:08:09 PM

    So, Michael Rice. I see you're open to honest feedback then ... You seem to be forgetting that it's the broker's option as to which lender he matches his client with in the first place. Who are you with, I'll have to store that in my memory banks?
    When these companies first appeared on the landscape the main selling point was that it was going to be less expensive FOR THE CLIENT. So much for that idea.

  • marvis olson on 2015-05-11 2:19:53 PM

    The problems seem to be with NAS----try Solidify--not every deal has gone perfectly but when does it ever.
    I agree with Michael Rice---------once you know the system it's easy to use---& a good point---if I was lending my money--I would want an independent appraisal.
    I belong to a Women's Broker group & the agony they go thru to save the clients $50--as if their own time wasn't of value.
    If I was paying cash for a property I would still get an appraisal

  • Ron Butler on 2015-05-11 2:28:56 PM

    Mr. Rice, you represent a MIC; all "B" business the applicants have to eat whatever you tell them. Please be aware that those of us who deal in AAA mortgages have to be extremely conscious of appraisal costs since we are paying for them 90% of the time and silly "executive home" charges on $450K houses outside of Barrie really are a pain in the rear end. I am not interested in crying about valuation issues, that is a pointless debate but goofy fees and erratic response times are all very real and painful.

  • Guy Lew on 2015-05-11 2:39:06 PM

    I sympathize with Tom McCormick, many of the appraisers on NAS list is also on Solidifi. You get bad appraisals with the good, it happens. It is hard for NAS to review every appraisal that is done, NAS is victim of their own success. All brokers would like to see is if there is a complaint, there is a some sort of consideration to re-review the report and not slam the phone or ignore the complaint. I get tired of hearing excuses. There is an issue when a report comes in 20% lower after a competing Bank just did it months ago. I just want them to listen and say this doesn't make sense, let's review it again and not blow people off after they paid for a service...not disservice.

    I had it out with HVI last year when they appraised a town home in Richmond Hill for $150,000 less than market value on a re-fi. Appraisal came in at $650K killing the deal and the client sold it for $800K a few months later due to frustration of not getting their re-fi done. The client actually wanted to keep the home, but forced into selling. Bad appraisers continue to pollute this industry.

  • BobW on 2015-05-11 2:49:32 PM

    Michael,
    We have an older townhouse complex that was built in two phases. One has electrical heat the other Natural Gas and very different values for each. An outside appraiser coming in from NAS or Solidify likely wouldn't pick up on the difference. Would you want that in your portfolio mix? And no, I can't use a local appraiser who knows the difference because they are not on the lenders appraisal list.
    Personally, I think it is my responsibility to do what is right and backstop the lender. But why am I paying a higher fee for an inferior product.
    The lenders don't care as these fees are not coming out of their pocket.

  • Barry on 2015-05-11 2:55:19 PM

    Quite a stir...

  • Randy on 2015-05-11 4:22:03 PM

    I had a condo appraised. The condo opposite in the same building sold for $186,000 just 1 month before. The appraised condo was purchased in April 2014 for $174,000 and this Condo is Superior in comparison. What happen is that the appraised value came in at $170,000. Approx. $8,000 was also done in renovation when the subject was purchases in 2014. According to MVA this property should have a market value of $200,000. How come the appraisal came in below even the purchase price when the condo was in a very immaculate condition. I believe that the appraisers today are just giving a low value willfully and making a high commission as they are overcharging the owners / buyers. This appraisal was don through McCormick. How can they appraise a property that is in superior condition way below market. These people don't care. Real Estate Agents and Mortgage Brokers work on commission. They do not. So they don't care, They get paid because appraisal s have to be paid upfront to get value for lenders to finance. regardless if there is finance or not. Appraisers get paid. NOT FAIR. AIIC should be involved and look into this. Fees are very high. I believe that all Professional Organization should not only collect fees but get off their butts and work for their members. We are the ones paying them.

  • Gus on 2015-05-11 5:08:52 PM

    On the appraisal end of things, the well qualified appraiser is competing with less qualified and the race to the bottom with fees. The fees by NAS and others are the rock bottom rates and the only alternative is to charge up as these AMCs are telling clients that is the price for their appraisal. The 'informed ' appraiser knows that their throat is slowly being cut by these AMCs gathering their data and reselling it thus cutting the appraiser out of the picture. You don't meet the lowest price, the telephone forms cob webs. These companies are becoming too powerful, too unregulated and too rich off the back of the consumer and appraisers. As for sending orders to your own company? Does anyone seriously think this ISN'T a conflict? Any broker that is experienced knows the system is seriously flawed. Names changed to protect the innocent as the AMC's are VERY vindictive to any criticism!

  • Sean Binkley on 2015-05-11 5:24:07 PM

    Wow, "appraiser matrix measures to ensure quality and efficiency" sounds very sophisticated, proprietary and state of the art. I use my own appraiser matrix as well. If they don't provide good service, fair rates, and good communication, I don't use them. Since when did ordering an appraisal get so complicated? Of course picking up the phone and talking to an appraiser is a federal offence today. If we had a conversation, it would put so much undue influence on them, wouldn't it?

  • Hardeep Khokha on 2015-05-11 5:52:08 PM

    Take NAS to Small court and also sue them because they value the property at very low price. Make their complaint to Appraisal Association of ontario to revoke their licence in above case where NAS appraised at 995K and other appraisal company appraised at 1.4M. This is too much. We must teach them a lesson.

  • James on 2015-05-11 5:54:01 PM

    @Michael
    What risk is the lender taking exactly that is mitigated by AMCs?

    Lenders have their own list of appraisers that they vet.

    As far as I'm concerned, the issue here is whether or not AMCs provide added value to the lender/client/broker to justify the added cost and inconvenience.

    Sadly, the answer is NO.

    What can you do? tell your BDM or VP that you do not care for AMCs. Tell them you are more than happy to work with their list but would rather order direct.

  • momoney on 2015-05-12 7:20:32 AM

    hi fellow mortgage agents and brokers, united we stand divided we fall.

    Why don't we organize thru our associations imba and Caamp and see if we can put a little pressure on our lenders to drop NAS? And reach out to the appraisers to support them too? pressure them to boycott NAS

    We should make our demands clear and concise.

    I also think we should team up with the appraisers thru their organization to find a way to get rid of NAS.

    We both should be boycotting NAS, they are squeezing out the appraisers and increasing cost to the clients.

    We should thru IMBA and Caamp target one or two lenders to provide us with the option of getting an appraisal off the list of approved appraisers.

    I think we start with one or two of our monoline lenders and as a block of agents give them a deadline to negotiate with NAS to clean up their act to the customers.

    Also since most of us are affiliated with a national brokerage of some kind too. We should get Verico, Dominion etc. To work with us to get rid of NAS.

    Anyone think this is a worthwhile cause? I do. NAS is hurting the broker channel by giving crappy service to brokers, customers, and appraisers.

    Shall we organize a facebook page?

  • Ross Kay on 2015-05-12 8:32:55 AM

    STOP MOMONEY!!!!!!!!!!!!!!

    Do not start this project!!!!!. The moment you start this the Competition Bureau will be down your back and you will never get them off!!!!!

    This can be done in a legal way but it cannot be from a current association of members, group of privately owned corporations or even the best brokers and best appraisers. That is against the law.

    What proof look how the Competition Bureau rules REALTORS. The CB has won every challenge ( no matter what face CREA wants to put on this) since 1989 against organized real estate.

    What MOMONEY is suggesting is possible but it must start in a very unique and CB compliant manner.

    Unfortunately the BAD APPRAISERS AND THE BAD MBs will not like it but in all fairness they are harming the reputations of all of you folks for decades.

    And no the Provincial Regulator can't help you either!

  • momoney on 2015-05-12 12:11:31 PM

    what is anti competitive is ramming NAS down our throats too.

    In the end who is the client?

    the mortgage company?

    or the borrower?

    having one nas to run thru to get appraisals is extremely anti competitive.

  • Simon on 2015-05-12 9:46:05 PM

    How about an over $900 appraisal fee, for a $320k home, the client refused as did I and we pleaded with the lender, gave them an option on different appraiser. End cost $345, lender happy deal closed, still waiting for the refund since 26th of March. That's NAS for you.

  • Simon on 2015-05-12 9:46:24 PM

    How about an over $900 appraisal fee, for a $320k home, the client refused as did I and we pleaded with the lender, gave them an option on different appraiser. End cost $345, lender happy deal closed, still waiting for the refund since 26th of March. That's NAS for you.

  • Simon on 2015-05-12 9:46:57 PM

    How about an over $900 appraisal fee, for a $320k home, the client refused as did I and we pleaded with the lender, gave them an option on different appraiser. End cost $345, lender happy deal closed, still waiting for the refund since 26th of March. That's NAS for you.

  • bruce davison on 2015-05-18 11:00:04 PM

    I have used solidify quite often, and found their pricing good ( toronto area may be different?), service has been excellent and reasonable appraised values for the times that we are in. (with solidify you do get to choose appraiser options.)
    With respect to fees, 25 years ago, appraisers got $800 for an appraisal and had a 3 to 5 days to complete the file. Now we expect greatness by paying them $ 300 and expecting an answer the same day, with hourly updates. The system we have is not the result of the appraisers' wishes; it is the buyers of their services that have bast....ized the quality and the expertise. To compete, appraisers have to do numbers, and that means hiring numbers, which inevitably lowers the overall quality of the end result. I won't tell you what a mortgage broker earned on a deal 25 years ago!

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