bizMe

By Steve, Baltimore

There exists an inherent conflict-of-interest between a residential real estate appraiser and a loan officer who is driven by commissions. Loan officers want to make loans whenever possible, but if a mortgage loan is sold on a property that has been overvalued, the bank could loan out more money than they can obtain via foreclosure. This is where a vendor management company, like Finiti, comes into play. We handle the recruiting, onboarding, and managing of the appraisers, called vendors by the industry, who complete the appraisals needed for Citifinancial to close a loan.

In the majority of the country, a vendor (appraiser) is ready and waiting for an order from us even before we receive the request from the lender. However, in some cases where we do not have an appraiser, we must search for one and get them setup to complete an appraisal order for us. My team handles the recruitment and management of these individuals. We spend a good portion of our time discussing the individual fees paid to each vendor. Usually, they request to be paid more than we’re willing to dish out. Some of these conversations can get pretty testy as the rising costs of gasoline, licensure, and continuing education hamper the vendors ability to turn a profit. In addition to fee negotiation, they are also required to turn an appraisal back to us within a specific period of time. If they are not doing as we ask of them, we get to have another conversation with the vendor to find out what might be going wrong. If they don’t speed up their process, we find another vendor who can do a better job.

We also provide Citi with another type of report, done by real estate agents, called a Brokers Price Opinion (BPO). An agent completes a BPO when a Citi property goes into foreclosure and the lender needs to know how much they can expect to get when the house sells on the open market. Who would know better than the salability of a property than a local realtor? We manage these agents and brokers in a very similar fashion to the appraisers. Fees are negotiated, performance is tracked, and poor performers are replaced whenever necessary. In a volatile industry, we see our share of good stories and rough. But when Citigroup needs something to run their business, it’s our job to provide that service for them.