Indianapolis based appraisal management company StreetLinks has established a $1,000,000 fund to pay a performance guarantee to its clients, saying that it ensures their appraisals are consistent and accurate.
Of course with any guarantee you have to read the fine print. A lender simply has to stick to the following rules:
- Minimum volume: 50+ full conventional and/or FHA products per month
- Established and typical state, regional or national lending footprint
- Adherence to StreetLinks, HVCC and FHA appraiser independence process
- Utilization of StreetLinks “IntelAssign” appraiser selection process
- Volume, footprint & reporting equality must be established to derive a fair comparison if the performance guarantee is constructed around a competing AMC or lender “in-house” process
Why waste their money starting a million dollar fund? Just throw $500 into a separate bank account, call it a performance guarantee and make it nearly impossible to meet the criteria – because that’s really what they’ve done here. It’s a failed attempt to differentiate themselves from the typical appraisal management companies.
The late Chris Farley said it best in the movie Tommy Boy:
…they know all they sold ya was a guaranteed piece of s***. That’s all it is, isn’t it? Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I’ve got spare time. But for now, for your customer’s sake, for your daughter’s sake, ya might wanna think about buying a quality product from me.
In a somewhat related story, I remember seeing a Businessweek article that talks about NovaStar Financial, a large subprime lender during the housing boom.
NovaStar was disciplined by three states—Massachusetts, Nevada, and Washington—for such infractions as employing unlicensed brokers and charging unlawful fees. Without admitting wrongdoing, the company paid $5.1 million in 2007 to settle similar allegations in a class action brought on behalf of borrowers. After its mortgage business collapsed, NovaStar morphed into an AMC last year by acquiring another company and renaming it StreetLinks National Appraisal Services.
Steve Haslam, NovaStar’s former chief of retail lending, is now CEO of StreetLinks.