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On June 5, 2012 we were hired by Financial Funding to complete a Commercial Appraisal in New Jersey. We were advsied to collect partial payment from the borrower and the balance would be paid by them. After the report was completed and sent, we were hired to complete 4 more appraisals in New Jersey and New York.
Monthly statement have been sent since December 2012 for a total amount of $10,400.00 and we have not received payment for any of the appraisals. Several calls where placed to their office and the "Director of Operations" told us each time that she doesn't handle the payment and we would need to speak with accounting. When calling back to speak with accounting it was the same person getting on the phone.
Our office has spoken with the Vice President of Underwriting and have been told several times that a check is being sent out. As stated before it is now January 2014 and still no payment.
1 Updates & Rebuttals
Financial Funding LLC
Eatontown,New Jersey,
In Response to Complain from Bruce Jones - Lakehurst, New Jersey
#2REBUTTAL Owner of company
Fri, April 04, 2014
Realty Management Services, Inc., also known as RMS has been a thorn in our sides. Due to us both being local companies, we had a long standing working relationship for over 10 years. Recently, that relationship has soured due to our use of RMS Commercial Group for commercial appraisals. The quality was sub-standard and resolution was near impossible to non-existent. We engaged them to do an appraisal of a property in Union, NJ. In that case, payment of the fee was misrepresented on an appraisal that was ordered with MAI designation.
With that said, one would expect that the level of the appraisal would be better than good. Having used national appraisal firms with appraisers with MAI designation, we had expectations. We expected the appraisal to be done thoroughly, with valuation variances (as is, as stabilized, etc.). The appraisal report of the Union NJ property was completed with the company engaging directly with the client even though we signed the engagement letter stating how the fee would be paid. The contract was changed in essence, on site with the borrower and without our knowledge. The report included giving a substantial value to a cell phone tower and billboard on the property but the report did not include any comparables to substantiate the value. When Bruce Jones was asked where the comparables were derived from, he had no response. The value of the property was severely inflated with nothing to back up how he arrived at the value of the cell phone tower and billboard. The borrower provided contracts, but there were no national nor local comparables to see if the contract was on par with competitors, below market or inflated.
Simultaneously, we engaged them to value a property in Atlantic City. The property was a mixed use property approximately two blocks from the Boardwalk. The purpose of the appraisal was to value to property for a purchase. The purchase price of the property needed to be evaluated to ensure it was on par with the actual condition of the property. The borrower provided Bruce Jones with a rent roll stating all three units were rented and generating income. When the appraisal report was received and reviewed by the office after the interior inspection, it was discovered that one of the units was currently under renovation. The property was down to the studs and uninhabitable. Despite that, the property value was brought in at purchase price. The location of the property was in a less than desirable neighborhood and this was verified with the surrounding properties. When Bruce was questioned on how the property came in at purchase price with an uninhabitable unit, there was no response. At the time, we ordered the reports directly through, a representative at RMS. We had numerous e-mail communications and face to face meetings regarding the issues with the commercial reports we were receiving. After that, there was still no resolution. To further back up the discrepancies in the report, the Atlantic City property and borrower was a case that went to court. The case can be found at Maria Yaqoob vs. Financial Funding in New Jersey Court. After the case was litigated, Financial Funding, LLC was awarded a judgment against the borrower. The audio of the trial can be purchased. In that, you will hear where the judgment was awarded to Financial Funding partly because the judge saw the issues with the appraisal report. It was stated that a false rent roll was provided and when the appraiser went out to inspect the property, when the shell unit was inspected it should not have come in at purchase price. It was proof that our suspicions were not unjustified.
Another appraisal report we engaged RMS Commercial to complete was a property in Philadelphia, PA. According to the appraisal, the fair market value of the property was placed at $6.3M. The cost analysis is based off of different variables, with one being the existing Rent Roll that was provided to the appraiser by the borrower. The rent roll provided was a falsification of the actual rent roll of the property, thereby making all of the calculations incorrect. Also included in the appraisal report was the indication that the borrower was leasing the roof to a cell phone tower company. Income from that was included in the cost analysis for the valuation, yet no lease was provided to prove there was an actual contract. This is the same problem we had on the Union, NJ property regarding using Cell Phone tower income with nothing to back it up. Unsubstantiated income was used both times and that illustrates the problem. In reality, there was no lease. When these variances were discovered, we went back to RMS and Mr. Jones numerous times in attempts to get the value corrected based on the actual numbers which were at least half of what was provided. Many attempts to the appraiser and representative went unanswered. We provided them with the actual numbers and inquired as to why the cell phone tower income was used without any documentation. Our inquiries when unanswered. Due to various issues, this borrower ended up in litigation and ineffective appraisal was again brought to light.
Alpha Funding Solutions, LLC attempted to do business with us at the end of 2013, start of 2014. Partners of Alpha Funding Solutions had an interest in what Financial Funding was doing on the business end. They wanted to sit down in January of 2014 to discuss possible employment with Financial Funding, LLC, but we suspect that was also an attempt to obtain access to intellectual property. A few months later, they again reached out to Financial Funding, LLC via several e-mails in March of 2013 looking to obtain information regarding who we correspond with on Wall Street. They were also looking to gain access to our application, documents we utilize and how we work our loans. Alpha Funding Solutions’ commercial division was started up after them attempting to do business with us. We suspect their attempts to do business with us was in order to get Financial Funding to issue them our documents so they could commit theft of intellectual property by way of utilizing our forms.
Appraisers and lenders should have a relationship where they work together to have the best interest of the client at hand. We by all means want an appraisal that accurately represents the property especially in this very volatile real estate environment we are in. Unsubstantiated values may help make a loan, but it does not help a borrower at all. We want to assist our borrowers in their financing needs, but in a realistic manner. In the current economic environment, misrepresentation of value will hurt our borrower more than anything else.
Financial Funding, LLC is filing litigation against the Real Estate Services, Inc. family of companies (RMS Title Services, LLC.; RMS Residential Appraisals and RMS Commercial Group, LLC) along with Alpha Funding Solutions, LLC in New Jersey courts. This is not a situation that could be handled amicably, therefore litigation is the next natural step in order to gain a resolution for both parties.
Price, Meese, Shulman & D'Arminio, P.C.
Mack-Cali Corporate Center
50 Tice Boulevard
Woodcliff Lake, New Jersey 07677
201-391-3737 (fax 201-391-9360)