Consumer complaint received 2021-06-29
Product: Mortgage — FHA mortgage
Issue: Closing on a mortgage — 
Company: JPMORGAN CHASE & CO. (MI)

I submitted a similar complaint to the CFPB on XX/XX/XXXX and received a reply stating it was a duplicate complaint I had already submitted against Chase. My original complaint was submitted solely because Chase refused to remove me from their blacklist after the state of Michigans Department of Licensing and Regulatory Affairs ( LARA  ) determined there were no errors in my appraisal ( concerning a complaint Chase filed against me ). However, this complaint identifies additional illegal and unethical violations not present in my original complaint. This complaint is being submitted based on direction from XXXX XXXX at Michigans Department of Insurance and Financial Services, for numerous illegal and unethical violations of USPAP, the Truth In Lending Act, FIRREA, Michigans Occupational Code and U.S. Code 1639 committed by Chase and their appraiser. My reporting of this appraisal misconduct is a mandatory rule of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The subject property is located at XXXX XXXX, XXXX, MI XXXX. 

Chase filed a complaint against me with LARA in XXXX, and after their investigation, LARA cleared me of any wrongdoing in XXXX. Chases complaint consisted of five frivolous violations they claimed were present in my report, all of which were dismissed by LARA when they closed the complaint. In order to generate the complaint against me, Chase and their appraiser violated state and federal laws and mandatory industry guidelines, including multiple requirements of USPAP, the Truth In Lending Act, FIRREA, Michigans Occupational Code and U.S. Code 1639.

USPAP violations committed by their appraiser include : Conduct Section of the Ethics Rule, which requires appraisers to perform with impartiality, objectivity and independence, and to avoid any action that results in communicating assignments in a misleading or fraudulent manner.

Competency Rule ( parts 1, 2 and 3 ), which requires appraisers to have the knowledge and experience to complete the assignment competently, and to disclose any lack of knowledge and/or experience before they accepted the assignment. I suspect they also did not take all the steps necessary or appropriate to complete the assignment competently, or describe that lack of knowledge and/or experience in the report.

Standard 1 ( including Rule 1-1 a, b and c ), which requires appraisers to correctly complete research and analysis to produce a credible appraisal.

Standard 2, which requires states that an appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading.

Standards Rules 2-1 and 2-3, which state that the appraisal report must clearly and accurately set forth the appraisal in a manner that will not be misleading, that the appraiser is impartial and unbiased, have no personal interest with respect to the parties involved, have no bias with respect to the property, that their engagement and compensation for the assignment were not contingent upon the developing or reporting of a predetermined value or direction in value that favors the cause of the client, and that their analysis, opinions and conclusions were developed in conformity with USPAP.

Management Section of the Ethics Rule, which states that it is unethical for an appraiser to accept compensation when results are contingent upon development or reporting a predetermined value or direction in value that favors the cause of the client.

The Truth In Lending Act prohibits coercion, bribery and other similar actions designed to cause an appraiser to base the appraised value of the property on factors other than the appraisers independent judgment. When I received the appraisal order for the subject property, I was provided a previous appraisal of the subject property which exceeded its pending sales price, and I was asked to match it. I did not match that valuation, as the previous appraiser used irrelevant sales comparables to inflate her appraised value. The Truth In Lending Act also mandates that the parties involved in the transaction report appraiser misconduct to state appraiser licensing authorities, and Chase did not do that upon receipt after receiving the other two appraisals they ordered. Chase also violated the Home Valuation Code of Conduct, which requires that creditors must ensure that its loan production staff do not influence the appraisal process or outcome.

By providing me another appraisal exceeding the pending sales price, and asking me to match that valuation ( which I did not ), and then blacklisting me with no evidence of wrongdoing, Chase violated U.S. Code 1639 requirements, including : Engaging in any act or practice that violates appraisal independence.

Providing to the appraiser an anticipated, estimated, encouraged or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that a copy of the sales contract for purchase must be provided.

Withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate an appraiser.

Allowing the removal of an appraiser from a list of qualified appraisers or the addition of an appraiser to an exclusionary list of qualified appraisers, used by any entity, without prompt written notice to such appraiser, which notice shall include written evidence of the appraisers illegal conduct, a violation of the Uniform Standards of Professional Appraisal Practice ( USPAP ) or state licensing standards, improper or unprofessional behavior or other substantive reason for removal.

By ordering a second appraisal ( mine ) without filing a complaint against the first appraiser, Chase violated the Mandatory Reporting requirement, which requires them to report that appraiser if they have a reasonable basis to believe an appraiser is failing to comply with USPAP, is violating applicable laws, or is otherwise engaging in unethical or unprofessional conduct. That appraisers name is XXXX XXXX, and through the Freedom of Information Act, I was informed by LARA that Chase did not file a complaint against her for her appraisal.

Chases appraiser violated Michigans Occupational Code by : Violating a rule of conduct of an occupation.

Practicing fraud, deceit or dishonesty in practicing an occupation.

Committing an act of gross negligence in practicing an occupation.

Committing an act which demonstrates incompetence.

Failing to conform to minimal standards of acceptable practice for the occupation Demonstrating a lack of good moral character, and lacking the knowledge, skills and practical experience, and the facility in applying that information, education, and practical experience.

Performing an appraisal in a state in which they are not licensed. Based on their appraisers biased and unethical appraisal, and the fact that multiple Chase employees told me their appraisal was done out of their XXXX office, I suspect their appraiser is not licensed in the state of Michigan, which is a violation of federal law.

The appraisal I was asked to match used three different sales from the ones I used, with two of those sales exceeding/violating the 20 % living area guideline. One of that appraisers comparable sales was located over one mile from the subject, but the appraiser moved its location on the map and reported it as being .96 mile from the subject. On that same sale, the appraiser reported a living area difference 40 % smaller than the subject, and added {$5000.00} value for having {$4000.00} in concessions on its sale price. Her second sales comparable closed seven months before her appraisal date ( lenders at that time required sales within six months of the appraisal date ). The third sale used by that appraiser was a colonial-style home 34 % larger than the subject, and it closed three years before the date that appraiser reported in her appraisal ( the MLS # she referenced in her appraisal was unconditionally withdrawn and was not a closed listing ). That appraiser indicated on page 1 of the 1004 that property values in the neighborhood were Stable, even though prices were down approximately 20 % that year, and had been dropping for over one year. Chase did not file a complaint with LARA against that appraiser.

To " justify '' their complaint against me with LARA after the subject went in to foreclosure, Chase commissioned another appraisal by an appraiser in their XXXX, FL office. That suspected unlicensed appraiser appraised the subject property for {$60000.00} as of the date of its sale by using 3 irrelevant sales, including a bank-owned home, a Land Contract sale of a vinyl-sided 2-bedroom home ( the subject has 3 bedrooms ) which was 44 % smaller than the subject and did not feature a basement like the subject did, and the sale of a home which was 19.5 % smaller than the subject, offered no significant updates, and featured a sales date older than the three sales I used in my appraisal. Chase also did not file a complaint with LARA against that appraiser.