Appraisals being sent abroad

San Francisco Chronicle ^ | February 6, 2004 | David Lazarus

[sarcasm]

If you owned a million-dollar home -- not a terribly far-fetched notion in these parts -- would you want your name, address and residential details being sent abroad for examination by foreign clerical workers?

Probably not. But homeowners who refinanced their mortgages with Citigroup may indeed have had their property appraisals outsourced to India as part of efforts by the financial-services giant to cut costs and streamline its loan process.

[sarcasm]

ping

[raybbr]

This is absurd. How can someone in India know about U.S. real estate values?

[Beck_isright]

Just doing the jobs Americans want to do.

[angkor]

The problem with that, however, as is the case with all outsourced consumer info, is that strict U.S. privacy laws have no jurisdiction abroad. An overseas worker who misuses U.S. consumers' data can't be prosecuted like an American worker.

'Nuff said.

Same thing applies to HIPAA medical info. Covered Entities (CE's) are expressly exempted from privacy breaches by their outsourcing vendors (e.g., in Bangalore).

[G L Tirebiter]

What a tempest in a teapot!

If lenders can reduce their costs and offer me a more competitive rate with lower closing costs, then I say "Where do I sign?"

The expanded competition in the home finance business has been a remarkable boon to my family and to millions of others.

A guy in Mumbai vetting the appraisal is no different than some guy in Oklahoma City.

[A. Pole]

But the files going abroad can include -- aside from your name and address -- a map of your home, its location in the neighborhood, the purchase price, property taxes paid and other details about where you live.

The advantages of being poor in this "New World Order" become more apparent :)

[Hardastarboard]

Let's take the thought one step further. Fifteen percent of the Indian population is Muslim. If some of them got this information, and forwarded it on to their "undocumented worker" buddies back in the US, would it not be easy to steal from the rich to finance terrorism?

Of course, the Democrats would favor this, due to the "steal from the rich" aspect.

[KC_Conspirator]

I am still waiting for India to create something.

[Rebelbase]

Most likely, Citigroup is outsourcing the preliminary underwriting of the loan package, of which the appraisal is a part.

There are automated appraisal programs that use statistical analysis and linear regression to ballpark a property's value......this may be the case, but I doubt it as that type of thing is only used for LTV's at or below 80% combined with high credit scores.

IMO, its more a checking the appraisal for errors, and making sure it fits the lender's underwriting guidelines at $6-8/hour than having a $40,000/yr. underwriter do it.

[Broadside Joe]

"Citigroup's Mendler emphasized that the reviews being outsourced are primarily to ensure that appraisers' paperwork is accurate and complete. Loan decisions are not being made overseas, she said."

So are you saying that it can't be done here? Or that people here are dishonest?

"U.S. consumers' privacy is not an issue, Mendler insisted, because "we hold any vendor that we use to the same levels and standards of privacy that we hold our own employees to."

Sooooo.... the privacy act applies to India too?

"This sort of thing should be disclosed," said Robert Denton, a Walnut Creek appraiser. "There should be some disclaimer that your information is being outsourced."

Oooooh I smell a lawsuit!!!!

This last point is important, Dougherty stressed. A licensed appraiser is forbidden by law from disclosing the contents of an appraisal file to anyone.

"I can't even tell the homeowners what their property is worth," Dougherty said. "I can only reveal it to whoever ordered the report, typically the lender."

BINGO They've crossed the line.

[sitetest]

Dear sarcasm,

I wonder whether this will last the first wave of mortgage delinquency scandals traced to inadequate appraisal processes.

There really are some things better not out-sourced. I suspect this might be one of them.


sitetest

[Rebelbase]

"This is absurd. How can someone in India know about U.S. real estate values?"

See my reply above.

Also, the appraisal shows nothing about the borrower other than their first and last name and address of the property being purchased.

[sitetest]

Dear Broadside Joe,

"'I can't even tell the homeowners what their property is worth,' Dougherty said. 'I can only reveal it to whoever ordered the report, typically the lender.'"

It depends on who pays for the appraisal. If the lender requires the borrower to pay for it, the borrower is entitled to a copy. If the lender pays for it, the borrower isn't.

At least around here (suburban Maryland), I've never seen or heard of a mortgage where the lender paid for the appraisal.


sitetest

[Broadside Joe]

"Also, the appraisal shows nothing about the borrower other than their first and last name and address of the property being purchased."

Property ID number, legal description, city, county, state, assessed tax value. With that you can get even more info.

[Rebelbase]

"If you owned a million-dollar home -- not a terribly far-fetched notion in these parts -- would you want your name, address and residential details being sent abroad for examination by foreign clerical workers? "

Forgot to add, that info is available to anyone in the world through online access to courhouse tax records, which are public.

They won't be as detailed, but there is enough there know who owns how much of what, where it is and a value of it.

[Rebelbase]

Like minds!

[Broadside Joe]

"It depends on who pays for the appraisal. If the lender requires the borrower to pay for it, the borrower is entitled to a copy. If the lender pays for it, the borrower isn't."

It depends on the state. And here you don't see it until closing. And can not be discussed with the homeowner due to a conflict of interest.

[sitetest]

Dear Rebelbase,

"Also, the appraisal shows nothing about the borrower other than their first and last name and address of the property being purchased."

The actual appraisal report contains a pretty good amount of detail about the property. The appraisal report for my current home included the following information about my house and three other "comparable" properties:

- lot size
- square footage of house
- construction method (stick-built, masonry, etc.)
- number of bedrooms
- number of bathrooms
- number of garage bays
- exterior material (siding, stucco, brick, stone, etc.)
- presence of outbuildings (detached garages, sheds, gazebos, etc.)
- presence of decks, patios
- presence of swimming pool
- "upgrades" (hardwood or tile floors, granite or Corian counters, wainscotting, cabinetry upgrades, skylights, whirlpools, brass fixtures, etc.)
- utilities information (septic & well vs. public water & sewer, type of heat, any auxiliary electric supply, water heater type and size, etc.)
- overall property condition

And a couple of other items that I forget now.

I don't know how big a privacy issue this sort of information might be, but it's a lot more than name and address.


sitetst

[freedomluvr1778]

Reberlbase,

IMO, its more a checking the appraisal for errors, and making sure it fits the lender's underwriting guidelines at $6-8/hour than having a $40,000/yr. underwriter do it.

I agree with you. I think you hit the nail on the head. There just going down a checklist, making sure it conforms to guidelines. They aren't making value determinations.

Can't say I like the company doing this, but I guess its come to this.