Reviewing residential loan files and came across these two issues:

1) Guy owns an appraisal firm in town (insert bells and whistles going off) and we ordered appraisal from his firm. He didn't DO the appraisal or counter sign but the appraiser works for his firm. I called it lack of independence. Appraiser says he is objective. I say we need a diff appraisal.

2) Even better - - - Guy owns settlement company in town. He buys house in a new subdivision (which is being put up by a company he owns, too!) Problem is that he provided the title commitment, did the HUD, and was the settlement agent. Again, our Bank was atty advised that this was OK. Our res dept has offered to have someone else (same company) prepare the final title work. Our atty says that choice of settlement belongs to the Borrower. No one else has trouble with the fact that all three sigs on the HUD are the same.

Any thoughts, directions to references that could help me understand why this isn't a risk.

Thanks, Turtle

1) This is a clear exception to the appraiser guidelines. You need a different appraisal.

2) I don't like this, but unlike the selection of the appraiser, the selection of the settlement agent by the borrower is not specifically prohibited. The borrower's rights in the selection would be a matter of state law I can not address.