AppraiserLoft closes its doors, workers told firm insolvent: Sources
The recorded message to a call to AppraiserLoft, the San Diego-based appraisal management company, says the offices are closed in observance of Columbus Day.
But insiders told HousingWire AppraiserLoft is closed for good.
"On Friday employees were notified the company was insolvent," according to a source inside the AMC. "They were told they would be paid later. [CEO] Aman [Makkar] told them at lunch they will get paid next week, and they won't," the source alleged.
Rumblings about AppraiserLoft's financial woes have swirled for months. A number of entities have said they are owed money from AppraiserLoft and haven't been paid, including HousingWire. Others noted slow payments for some time.
When questioned about payment timelines Makkar said the government-sponsored enterprises were taking 90 to 120 days to compensate his AMC and this impacts his payment timelines.
"The GSEs are taking longer and longer to pay, and as a result payments to appraisers are delayed," Makkar said in an interview with HousingWire.
Mortgage lenders pay AMCs such as AppraiserLoft to arrange arms-length appraisals on properties to see if the loan makes sense. The AMCs then arrange and pay for an independent appraiser to value the property.
Several key executives have left AppraiserLoft in recent months as financial woes appear to have accelerated.
In an email exchange Sept. 29 with HousingWire, Anne-Marie Sheridan, an appraiser in the Los Angeles area, said her firm had about 25 outstanding appraisals with AppraiserLoft.
"It is slow payment or nonpayment issues," she said. "We are concerned they won't pay us. How can they continue to collect fees from lenders without paying the appraisers? No one can afford to conduct an appraisal business and not get paid."
Brian Coester, chief executive of Coester Appraisal Group, said he received an influx of appraisers leaving AppraiserLoft, asking him for work.
There are avenues for AMC redress when lenders don't pay up, he said.
"Having a bank owe you money is a great thing, because you know they are good for it," he said. "However, if a lender is dragging on payment, send a letter to the Office of the Comptroller of the Currency and the issue can be addressed, sometimes in as little as half a day."
For appraisers who don't get compensated by AMCs, however, there is no similar means to an end.
Coester said AMCs typically get paid half for a job when a lender commissions it and the other half upon completion.
Write to Jacob Gaffney.
Follow him on Twitter @jacobgaffney.
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