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#31797 - 09/09/02 08:14 PM Affiliated Business Arrangement
Anonymous
Unregistered

One of our loan processors is going to be married to an appraiser we use 80% of the time. At first I assumed this was an affiliated business arrangement, after reading Kirchmans, now I'm not so sure. Any opinions?

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Lending Compliance
#31798 - 09/09/02 08:51 PM Re: Affiliated Business Arrangement
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,923
Galveston, TX
Marriage to an employee does not constitute an affiliate relationship. However, if I was running a bank and had one outside appraiser doing 80% of my appraisals, I'd be looking at that practice and be thinking about why do I have all my eggs in one basket???
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#31799 - 09/09/02 08:59 PM Re: Affiliated Business Arrangement
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,958
Bloomington, IN
I do not feel you have an AfBA in this circumstance. Your bank (I assume) has no business interest in the appraisal company and vice-a-versa, nor do you have any “business agreement” that X number of your appraisals are to be ran through that company. As I understand the AfBA, it is to guard against affiliates unfairly benefiting by referring business to an “affiliate” and to advise the borrower the “referrer’ has a business and financial interest with the “affiliate” they are referring the borrower to.

The only thing I may consider guarding against is 100% of the loan officer’s appraisals going to this company. This might, and repeat might, be construed as a “conflict of interest” since, in the long run, he/she will benefit from the increased income of his/her new spouse.

I also agree with rclary’s comments about, “all my eggs in one basket”.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#31800 - 09/09/02 09:19 PM Re: Affiliated Business Arrangement
Lestie G Offline

Power Poster
Joined: May 2002
Posts: 3,607
Near the Land of Enchantment
Of course, depending on the size of the community, one appraiser may be your only choice (and/or your only competent choice). You'd want to document that, if it's the case.
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#31801 - 09/09/02 09:32 PM Re: Affiliated Business Arrangement
Anonymous
Unregistered

Small town, not many options. So the concensus would be "not an affiliated business", but keep an eye on the number of referrals?

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