What Exactly Does 323compliance Do?

Interesting question......

323compliance is basically a divison of Integra Realty Resources - SC that provides appraisal process management, appraisal reviews and assistance with establishing FDIC compliant appraisal procedures. Our services are certainly not right for every bank, but community banks have responded very well to our knowledge of Part 323 of the FDIC Laws and Regulations, otherwise known as Appraisal Independence.

When I first started marketing the Appraisal Process Management (APM) program, I expected to hear mainly from banks that had, as one banker stated, "been smacked around by the FDIC." Surprisingly, one of the first bankers to sign up for our program told me that he "just wanted higher quality appraisals" and that the examiners had never had a problem with their appraisal procedures.

We offer a very flexible service program, from working as a consultant to assemble a strong approved appraiser list, to procuring appraisals on behalf of banks.......or just providing technical appraisal reviews of select commercial appraisals. Please e-mail me at mdodds@irr.com if we can assist.

Michael Dodds, MAI, CCIM, MRICS

FDIC Humor: Do You Speak the FDIC Language?

The banker fell overboard... (humor)

The banker fell overboard from a friend's sailboat.

The friend grabbed a life ring, held it up, not knowing if the banker could swim, and shouted, "Can you float alone?"

"Obviously," the banker replied, "but this is a heck of a time to talk business."

Are Your Approved Appraisers Licensed? Really? Are You Sure?

An unlicensed appraiser was able to submit numerous fraudulent appraisals to a mortgage brokerage company in Pennsylvania, which were then used to secure financial loans. The case has been back in the news as one of his fellow participants pleaded guilty to charges of wire fraud conspiracy and filing false tax returns. John Polosky, a loan officer for First Capital Home Equity, accepted fraudulent appraisals from Kenneth Cowden, an unlicensed appraiser. Cowden had plead guilty in July, 2007, in federal court in Pittsburgh to two counts of failing to file income tax returns.

LINK TO ARTICLE HERE

We constantly monitor the approved appraiser lists of our 323compliance clients to ensure that their approved appraisers are appropriately licensed and maintain errors and omissions insurance. Proper approved appraiser list management is a vendor management responsibility. The FDIC takes that very seriously.........

E-mail me if I can help

Michael Dodds, MAI, CCIM, MRICS

Too Little.....Too Late

Former Bank Vice President Pleads Guilty to Hiding Appraisals in Bank Audit

David S. Kennelly, of Vancouver, Washington, pleaded guilty in U.S. District Court to a Scheme to Conceal Material Facts in connection with an audit of the former Bank of Clark County in 2008. The bank was shut down by the FDIC in January 2009. Under the terms of his plea agreement, KENNELLY is prohibited from working for a financial institution regulated by the FDIC or the Federal Credit Union Act, without written approval of the agency. When sentenced on May 14, 2010, by U.S. District Judge Robert J. Bryan KENNELLY faces up to five years in prison, three years of supervised release, and a $250,000 fine.

During the examination in November 2008, KENNELLY falsely represented that all available appraisals were in the computerized system. Based on the appraisals the examiners were able to review, the bank was instructed to increase its loan loss reserved by more than $3 million. Just prior to the termination of the examination, investigators learned of the hidden appraisals on some 15 different projects. In response, KENNELLY first tried to advance the false claim that the appraisals had been overlooked because of a heavy work load. He unsuccessfully attempted to get a bank employee to promote this story. After the examiners saw the additional appraisals, they determined the bank needed an additional $16.7 million of capital for loan reserves. On January 16, 2009, the Washington State Department of Financial Institutions declared the Bank of Clark County insolvent and appointed the FDIC as Receiver.

Click Here for More Details on the FBI Website

Former Bank CEO's Son Did a Large Portion of Georgian Bank's Appraisals

Should the FDIC sue bank directors and executives if they prove regulators’ assertions of "unsafe and unsound banking practices" and wrongful acts?

Here are some excerpts from an article about the failure of Georgian Bank.

"Sources in the banking industry say the FDIC has sent “demands for civil damages” to directors and officers at some Georgia banks."

"Regulators criticized the bank for allegedly inadequate appraisals used in loan underwriting and for renewing development loans without updated valuations of the collateral."

"Regulators also criticized the bank for the use of Teel Appraisals & Advisory Inc., a company owned by Georgian Bank CEO Gordon Teel's son, which apparently performed a “large portion” of the bank’s appraisals."

"A proxy filed November 22, 2004, with the SEC prior to the company changing from publicly to privately held shows that the firm was paid $324,000 for appraisal services, or about 90 percent of the total paid during the first nine months of that year for appraisals."

Click Here for Details on the Georgian Bank Situation

Obviously, Georgian bank didn't have a proper appraisal process management plan in place. If you feel that your bank could use some help with addressing appraisal independence (compliance with Part 323 of FDIC Laws and Regulations) give me a call. Integra can help.