AI Damaging the Livelihoods of Appraisers

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AI Damaging Appraisers Livelihood - Shame on All AI National Leadership

Congrats AI National, you got a win and hope you can sleep at night…

The Appraisal Institute succeeded pushing SB-70 into CA law without informing their own membership. Their long-term goal for all their anonymous lobbying to dismantle all appraisal licensing is to revert to a previous time before FIRREA when membership in trade groups mattered a lot more. Unfortunately, they are heavily damaging the livelihoods of appraisers in the process. Be sure to shake hands with Scott DiBiasio, Bill Garber, Jim Amorin and the rest of AI executive leadership at your next AI meeting.

The background on this insanely damaging law to appraisers can be found in the August 3, 2018 issue of Appraiserville.

I’ve been keeping tabs on SB70 and saw that it was signed into to law this week.

SB-70 Real estate: Uniform Standards of Professional Appraisal Practice.(2017-2018)

Here is what I wrote back in August about SB70:

Here’s the biggie:

(C) States that there may be assumptions that the appraiser has not verified that may significantly impact the appraised value of the subject of the report. The whole purpose of USPAP is to provide credibility in reporting to protect the public trust. With the wording of this bill, any appraiser could take any point of view and not back it up with verifiable data. For example, an appraiser could take a seller’s word on potential uses of their property and the appraiser can simply restate them and not provide any support to verify the claims.

THEN WHAT THE %^&$@#% DOES THE PUBLIC NEED AN APPRAISAL FOR????

This bill allows the creation of a worthless document that demeans the value of an actual diligent appraisal.

This will open up fraud and overvaluation on a scale not yet seen before. It renders our profession equal to a fortune teller (no offense to fortune tellers). This bill shows a blatant disregard for the public trust from the real estate’s largest trade group.

But there is more:

This bill, if it becomes law on January 1, 2019, is only good until January 1, 2020!!! It is only valid for one year which clearly shows how desperately AI National needs to claim a win after years of losses in fighting for evaluations against their own membership’s wishes. They are throwing ethics aside! All bets are off now! Just get a win!

This bill destroys the validity of what an appraisal actually is because good appraisers can now perform like bad appraisers without concern. There is no accountability and no verification required if this bill is passed.

Plus, this bill changes the use of the report from the single client concept to a universal use as long as all the names are listed. How does this square up with their own code of ethics?

There is one glaring oversight by the AI lackeys in Sacramento that signed-off on this bill in secret that shows their own greediness to advance up the AI National hierarchy: There are about 10,000 credentialed appraisers in California. I don’t know how many AI designated members are in California, but I’m assuming it is substantially less than that. If this bill becomes law, can anyone imagine the explosion of fraud by people desperate to take shortcuts, ESPECIALLY AS THE MARKET STARTS TO COOL? Remember, AI leadership in California signed off on a bill that makes verification unnecessary. I’m sure a majority of AI membership in California are decent and competent appraisers. But now they have to compete with the bad eggs or those that will quickly become bad because they can say and do anything without verification. Not only AI members get to do these simple reports, but anyone with a license and a pulse does as well.

And you can bet that AI National will press for renewal or permanence in 2019 without telling their CA membership. I was told from a very credible source that the strategy all along was to not tell the membership what was going on and sneak in the bill in the second year of a 2-year review process. Congrats AI National, you got a win and hope you can sleep at night. Oh, and shame on all of your leadership.

Jonathan Miller

President & CEO at Miller Samuel Inc.
Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.
Jonathan Miller

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Image credit flickr -Steve Baker
Jonathan Miller

Jonathan Miller

Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.

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57 Responses

  1. Joy Lynn on Facebook Joy Lynn on Facebook says:

    Following

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  2. Jesse Ledbetter on Facebook Jesse Ledbetter on Facebook says:

    I confronted the AI representative at the 2017 panel at the Appraiser Expo. It was made very clear at that point that they do not care about the appraisal profession short or long term. Sadly NAA is in lock step. Both are beholden to the banking industry.

    A letter signed by appraisers stating the AI do not represent the opinion of appraisers is in order.

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  3. Jonathan – While I applaud your passion on this and many other issues affecting our profession, your breathless excitations merely affirm your personal animus towards the Appraisal Institute. A dispassionate reasoned reader can easily see through these headline grabbing histrionics.

    As you well know, there are thousands of unlicensed valuation professionals performing valuation-related work today . . . to a different standard, or perhaps to no standard whatsoever.  State licensed appraisers in California are unable to compete on a level playing field given, among other things, the requirement to produce restricted-use reports for one intended user only.  No one could possibly argue that the public in California is better protected by ceding this work to unlicensed practitioners in New York or India.

    The bill strictly limits the practice to non-FRT work NOT involving the purchase or refinance of a residential dwelling of one to four units and where users may not be well-enough versed in the subject matter to properly understand information contained in a restricted appraisal report. In addition, a restricted-use report must clearly identify all users. The change of the current reporting requirements as of January 1, 2019 will likely only impact a very small percentage of CA State-certified appraisers. Those that work on real estate valuation assignments pertaining to tax appeals, financial reporting, estate and tax planning, investment partnerships not associated with federally insured transactions and/or funds, etc. The clients/users of these type of assignments understand the restricted appraisal report format and do not typically require the reporting of all information and analyses that would be included in an appraisal report.

    I’m not sure how you make the leap from what the bill actually permits to an “explosion of fraud by people desperate to take shortcuts . . . .”

    Members of the Appraisal Institute CA GRC sent out invitations to every other appraisal organization in California to meet with us in the fall of 2017 in Irvine at a very lovely hotel. We even offered to pay for lunch. The aim was to solicit feedback from other stakeholders. We called and emailed weeks in advance and not a single person showed up.

    Earlier this year, David Graeler with Nossaman, spoke at a joint AI / IRWA luncheon. After opposing AB624 two years previously, he endorsed our efforts with SB70.

    Have you actually spoken to anyone with AI about this bill to get another perspective?  In other words, have you performed your own verifications before forming an opinion?

    Oy vey.

    Charles Baker, SRA, AI-RRS
    SCCAI Chapter President 2018

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    • Avatar Advocate says:

      Mr. Baker,

      Rather than loosen the standards, wouldn’t a better approach be to protect appraisers and consumers by tightening the standards, not allowing anyone other than a licensed appraiser to determine a value? AI’s actions of late are not in appraiser’s best interest. They have a personal vendetta against the TAF and will not let it go. The thinking behind this bill and others like it are very short sighted. Appraisers are being harmed by their actions across the country.

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      • Avatar Charles Baker says:

        Mr. Advocate – It was AI’s canon and code of ethics that became the seed-corn for USPAP. So, I think you’ll find AI has had the back of appraisers since the beginning.

        Who’s job is it to regulate appraisers? TAF and state boards. However, they have no jurisdiction or power to regulate non-licensed activity. Perhaps they should, but that’s a topic for another discussion. In the mean time, how would tightening standards further open the floodgates to all this work we are currently being priced out of? I’m not following.

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        • Avatar Advocate says:

          Mr. Baker, AI should be pushing for all valuations to be performed by licensed appraisers in compliance with USPAP. Appraisers should be the only ones providing opinions of value.  What AI is doing is creating a free for all and damaging the public trust…… You know the main purpose appraisers are licensed! Like I said before this is a vendetta against TAF and appraisers are part of the collateral damage. The other collateral damage is the housing market and economy. Reverting back 30 years is not going to move us forward!

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        • Avatar Advocate says:

          Let me state this another way. NO ONE other than a licensed appraiser should be providing an opinion of value. This is the message AI should be pushing!

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          • Avatar Charles Baker says:

            You’re stating the obvious. We agree completely. But that is an entirely separate discussion. Not sure what AI can do to persuade regulators to require anyone performing valuation-related work be licensed. Moreover, what have TAF sponsoring organizations done? Nothing, to my knowledge. So rather than throw darts at a non-sponsoring organization (AI) who is trying to help appraisers compete, why not direct your questions to TAF itself and its sponsoring organizations. Except you likely won’t get an answer since every sponsoring organization must toe-the-line.

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            • Avatar Advocate says:

              What exactly is AI helping appraisers compete with? People who do not have my background, training skills ethics or professionalism? NO THANKS. I am a professional that has worked very hard to build my business and reputation. It is about economics.. Business 101… just because you have more volume, does not mean it is profitable. Like I said, AI’s agenda is short sighted. Their actions are based on a vendetta, not what is best for appraiser, or even their own members.

              Think of it another way.. Why is there so much negativity against AI? If they were doing what was best, there would not be any negativity. If they were proud of their actions, why have they going behind the backs of their own members in most other states to push this?

              Dismantling and dividing the profession as  AI is doing, is not moving forward, and not helping appraisers or consumers. No other appraisal organization is in support of this agenda. There is a reason!

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            • Avatar Brooklyn Brawler says:

              Wait. Did you say HELP APPRAISERS COMPETE? Who in the hell gave the AI this authority? Go to school, take classes, gain experience and then compete. This is the most asinine thing ever. AI helping appraisers compete. Lmao. I worked my ass off to get where I am. No one deserved a shortcut to COMPETE with me. You have to earn that. Yet here is AI helping lesser appraisers to compete? Ha. AI IS A JOKE and I so are its members. A bunch of puppets who are are in cahoots with that CRN network and AMCS. AI has done nothing for residential appraisers and you can say “they have done so much” all you want. The truth is they haven’t. All they care about is commercial, investors, AMCS  and corporate BS.

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        • Jesse Ledbetter on Facebook Jesse Ledbetter on Facebook says:

          The state boards do have jurisdiction, in the same way that all state boards have the means to regulate those that attempt to perform professional services without a licence – which is why BPO’s were illegal in the state of PA until recently – but the state refused to enforce the regulations. This was acknowledged by AI and NAA reps and ignored. The solutions have been on the table for years, but the NAA and AI continue to be in the pocket of the banks.

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      • I STRONGLY SUGGEST THAT NON-AFFILIATED APPRAISERS NOT ATTEND AI MEETINGS OR SEMINARS, CLASSES. THEY STAY IN VERY CLOSE CONTACT WITH THE OREA/BREA AND REPORT EVERYTHING THAT THEY HEAR REGARDING NON-AFFILIATED APPRAISERS. ONE APPRAISER HAS REPORTED THAT HE LOST HIS LICENCE AS A RESULT OF A CONVERSATION HE HAD AT AN AI, MAI, APPRAISAL INSTITUTE SEMINAR AFTER THE INSTRUCTOR REPORTED HIM TO OREA/ BREA. IF YOU MUST ATTEND, KEEP YOUR MOUTH SHUT! AND OPEN YOUR EARS OPEN. 

        https://activerain.com/blogsview/5302007/orea–brea–ai–mai–appraisal-institute-secretly-conspire-to-destroy-appraisal-profession

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    • “Oy vey” is an example of  dispassionate, fact filled commentary?

      1. AI did NOT send invitations out to every single appraisal organization in California. Though AGA is a national appraisal peer organization and guild, we maintain a branch in California and we received nothing from AI. I’ll concede AI may have sent out half a dozen invitations to limited numbers of appraiser organizations. Coincidentally organization that would not be at all, or only nominally affected by the impact of SB70.

      2. Why would any care or consider David Graeler of Nossaman to be a credible representation of appraiser opinion or appraiser interests? Nossaman is a law firm.

      3. I corresponded with George St. Johns of CaCAP regarding this…after previously  strongly opposing AB624 and helping to bury it in appropriations until it finally died.

      4. ALL AI did with this Bill is to lower standards. Dress it up any way you want, but the bottom line is that AI promoted something LESS than the minimum acceptable standards allowed for FRTs on the basis that non NFTS don’t matter. Apparently defrauding consumers and / or private investors isn’t as bad to AI as it would be in FRTs?

      5. AI would enjoy far more support (and probably even growth) if it would cease the behind the scenes back room political manipulations it seems to prefer over open and honest public debates concerning appraisal issues.

      I DO appreciate your reps not claiming to represent the interests of all appraisers anymore at TAF meetings. A small but important step in the right direction.

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      • Avatar Charles Baker says:

        Mike – We invited RICS, IRWA, ASA and ASFMRA. I’ll make sure you’re included next time.

        Charles

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        • Mike Ford Mike Ford says:

          Thank you Charles. I will attend as long as it’s a real meeting and not just another AI dinner and drinks gathering.

          Having said that, as respected as each of the FOUR (4) organizations are; only ASA is really adversely affected.

          As ASA opposed AB624 (in fact hand carried OUR final objection to the Senate Finance Committee originally); and told me they were or had hired their own lobbyist to counter Mr. Garber & SB70 -I don’t see them as having supported your vision.

          I’m looking forward to in depth discussions with ASA on a lot of topics at Appraiserfest in San Antonio at the end of the month. ASA regularly demonstrates real support for all appraisers.

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      • 2. Why would any care or consider David Graeler of Nossaman to be a credible representation of appraiser opinion or appraiser interests? Nossaman is a law firm.

        NOSSAMAN ONLY HIRES MAI, APPRAISERS.

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    • Hi Charles,

      After enjoying a nice weekend, I came here only to be served up a heaping pile of doublespeak. Your personal animus was conveyed quite nicely by reframing critical points through breathless histrionics to make yourself sound like the voice of reason.

      The irony of your “verifications before forming an opinion” dig was not lost on me either since “verifying” was removed from the appraiser’s role in your SB-70 law in item 3C. Please re-read it.

      This Friday I’ll be translating each point you shared in your comments to what it means to all appraisers in the real world – within my weekly Housing Notes.

      I’d comment now, but I have a slew of work to deliver this week, and I doubt you care what I think anyway if you want to be considered for a higher position at AI National.

      best,

      Jonathan

      p.s. I’ll be sure to explain to you why no one showed up at that lovely hotel.

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      • Avatar Charles Baker says:

        Jonathan – A bit more background for your Housing Notes article.

        California is a voluntary licensing state. The law says that you only need a license to perform FRTs. However, the law also say that a “licensee” must follow USPAP “in any work or service”. As with many other states, California has taken the position that once you are a certified appraiser, you are required to follow USPAP when providing any opinion of value. So, non-appraisers and unlicensed appraisers can provide evaluations. However, certified appraisers cannot provide evaluations because they contain a value opinion. No one has ever been brave enough to test it. Everyone has just automatically assumed that a certified appraiser must always follow USPAP. It’s very strange situation where someone who isn’t a certified appraiser can perform non-USPAP compliant appraisals, evaluations, BPOs, etc. all day long. We know of several MAIs that have given up their licenses so that they DIDN’T have to comply with USPAP. But once you have a state-issued license you are bound by USPAP.

        Regards.

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        • Mike Ford Mike Ford says:

          Charles, the language now also ambiguously states “in covered transactions.” California verbiage has been getting artfully tweaked over the years.

          From personal experience in defeating BREA humiliatingly on a daily basis in court for five days in 2017 I can tell you that some of their senior staff (including their former enforcement head Seaters) don’t have a clue as to what constitutes USPAP compliance and what does not. Klinger is also doubtful since he lead the debacle in admin law court where our side clobbered BREA so badly.

          Heck they don’t even understand the difference between an SFR ownership rights and that of a mixed use condo. Their Sr. Appraiser-Investigator Schmidt committed perjury two specific times in addition to his overall deflection and avoidance.

          His testimony about compliance? He answered “yes” when asked in BREA appraisers have to follow USPAP, but then corrected himself saying “…but only the parts about not misleading.” I’ve kept the transcripts.

          My point is if BREA cannot competently enforce USPAP how are they going to competently enforce anything else like a second set of rules? Your SB70 may well blow up in your faces. It certainly won’t add to MAIs reputations, and may drag those of SRAs down as well.

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    • Hi Charles,

      SB 70 is nothing more than a rehash of the failed AB624. The TAF opposed it; ASA opposed it, AGA opposed it (624) and anyone else that reviewed it objectively opposed it.

      It’s not really about AI. It’s about bad legislation; and possible ulterior motives (of a few). When the predecessor bill (AB624) was first foisted off on us, the argument (By AI’s attorney in Redondo Beach -TAF 2015 meeting) had nothing to do with allegations of unlicensed competitors. The argument was that a very small market segment demanded an abbreviated product that was fast and cheap, and appraisers should not be kept from competing for that business. It was a recorded meeting. I’m certain TAF still has a video of it.

      For example; an entire portfolio of property (maybe hundreds of addresses) bundled as a single entity interest for tax purposes, or sale of securities. AI’s attorney testified that the number of appraisers that would even be affected by this was so small as to be a non-issue.

      The counter arguments were that if the number is so small, then why is a change in state law necessary to accommodate the few? That was never adequately answered to anyone’s satisfaction.

      Your argument that it is needed because non-licensed appraisers are taking this work away from other licensed appraisers is flawed. There’s an easy solution to that.

      IF that is the concern, then the solution is simply to return to the early post FIRREA days when California mandated that ALL appraisals performed by licensed appraisers had to comply with USPAP; AND more importantly, that any opinion/estimate of value or any other euphemism for an appraisal (except a CMA/BPO specifically performed with the realistic expectation of obtaining a listing; probate referees, and valuations prepared under franchise tax board regulations) could ONLY be performed by licensed appraisers. The loophole was very small.

      The big money at the time, doing abbreviated appraisal reports was in tax consulting and in support of estate & gift tax returns (Discounting for Lack of Marketability / fractional interests). Large accounting & appraisal corporations such as FMV Opinions (Orange County, CA) and a few others were routinely writing up largely boilerplate ‘appraisals’ with VERY thin support, communicated in just a few cover pages. Probate referees were producing two and three-page opinions of FMV for as little as $1,500 to $3,000+- at the low end of the spectrum; completing their ‘analysis’ in a day. The workaround being used by a couple MAIs at the time was simply to NOT sign the report, but only the certification!

      At the high end of the spectrum, tax accounting professionals were dealing with huge sums of money. Big enough to fly multiple $500 an hour 5th Avenue accountants and tax attorneys out from NY to Laguna Niguel, CA for full eight-hour, multi-day in-person debates with senior IRS managers. We aren’t talking about small returns here.

      We are talking about (minimum) estate issues of $25,000,000 to literally hundreds of millions of dollars. The highest tax issue I ever was peripherally aware of was 3/4 of a billion dollars.

      We aren’t talking about $1,500 fees anymore. We are talking about consulting assignments where the fee CAN legally be based in part upon the successful outcome of the case. How much would YOU pay the appraiser that just saved your firm $77,000,000 AND established a beneficial precedent for future returns?

      Traditionally entity interest (business valuation) was in the wheelhouse of tax consultants CPAs and attorneys. Even when significant real property ownership interests comprised the estate or entity holdings, R.E. Appraisers rarely got involved in these because our standards (USPAP) prevented us from writing the kind of abbreviated opinion reports associated with them; AND California used to have a requirement that ALL real estate appraisals must comply with USPAP. Stock ownership in real estate wasn’t real estate. No license required to value the stock interest/value of the real estate.

      IN the 2009-2011 USPAP revisions the term “valuator” was adopted for ALL appraisers. Traditionally it had been limited to use by business valuation trained accounting experts and analysts.

      Most particularly those that were NACVA trained down in Texas, and that had ASA, AVA or AVS after their names. AI leadership (presumably) saw an opportunity here. With the American Institute of Certified Public Accountants (AICPA) ‘almost’ on board with adopting USPAP, (I was told by my old boss that it was about 50% in favor and 50% opposed at the time), that blurring the traditional distinctions allowed real estate appraisers to compete with accountants in their field of expertise.

      Most appraisers didn’t want it. Most CPAs didn’t want us calling ourselves by their distinctive term either. So WHO in the 2008+- run up to USPAP 2009-2011 did want it?

      The ONE big hurdle to allowing “a small handful” of appraisers to cross-compete was that while we share the terms market approach, cost approach and income approach with accounting our implementation standards and accepted practices are day and night differences apart from the CPAs. The biggest difference was that our standards did not permit us to make the giant time-saving leaps and bounds CPAs could make under their standards (GAAP).

      A real estate appraiser might spend days or even weeks seeking relevant, recent sales comparables. The BV Analyst merely had to grab their copy of Price Waterhouse Cooper (Now just PWC) or Merger Stats and look up Wall Street Cap rates & returns of ten to twenty-year-old REITS for their ‘comps’ (adjusting them to a selected CPI or other finance indexes). Here’s the great part…they develop market rents based on Wall Street expected return rates! Not what lessors ask or get for rent, but what they need to get or demand in order to achieve the expected or predicted market rate of return (as evidenced in the ten-year-old ‘comps’ I referenced above.

      1. For an appraiser, that would be VERY improper procedure.

      2. For a BV Analysts, it was perfectly acceptable.

      My old IRS buddies (an MAI, and a former state investigator from The South) & I used to joke about “blue smoke and chicken bones approach”, but the truth is, its simply a fundamentally different metric that is meaningful on Walls Street & international finance, but isn’t when applied to individual Main St. real estate.

      IF AI is/was concerned about unlicensed ‘appraisers in California (and there are many), then they should have lobbied to pass laws prohibiting calling oneself an appraiser without a license. Of course, requiring across the board licensing would have conflicted with their third person inspector hybrid and evaluation goals.

      I’m not trying to rekindle anti-AI sentiment Charles. AI is simply AI. Y’all have behind the scenes internal issues to deal with.

      I am trying to clear the air on the WHY-part of SB 70, and it’s failed predecessor AB 624. While touching on why we all need to insist on USPAP for real estate appraisers only, instead of trying to pretend a one size fits all USPAP makes any sense at all. We are the only ones regulated by law!

      Accounting and real estate appraisal is NOT the same thing, though we may touch periodically on each other’s disciplines. Charles, the solution is not in beating up on AI.

      The solution is for all of us to better understand WHY bad legislation like this gets passed. Those much bigger issues get lost in finger-pointing.

      I respect Johnathon a lot. He simply focused on one symptom of a much bigger problem.

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  4. Avatar John Pratt says:

    If I am reading this correctly there are 2 major problems. First is that the appraiser will be liable to anyone that can get a copy of the report. Currently under California case law which has been confirmed on appeal the appraiser is only liable to the client which is the intended user named in the report. It appears to me that if anyone can use the report then the appraiser would be liable to everyone that uses the report for any purpose. This unrestricted liability is not a good thing for any appraiser. Second if the floodgates are opened to all different kinds of appraisals with no verification necessary the fees for an appraisal will drop to around $50 and no appraisers can survive on that kind of fee. Within a few years there would be no licensed appraisers, just a bunch of individuals filling out a 1 page form with a number at the bottom and a signature and maybe a few photo pages.

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    • Avatar Charles Baker says:

      John – As spelled out in the law, every intended user must be identified. So, your thesis is incorrect. You might be thinking about Mitteldorf v B&W Appraisal Services, Inc. or Soderberg v McKinney. These cases cover appraiser liability and are entirely separate from the issue at hand that, with the correct certification and limiting conditions language and a properly prepared engagement letter, would never had been contested. “Unrestricted liability”, as you put it, is not the focus here.  Also, the law is allowing licensed appraisers to perform work that might be more competitive with unlicensed individuals.  Seems to me, that would have the opposite effect you’re describing – “all different kind of appraisals . . . no licensed appraisers . . .”

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      • Charles, another alternative COULD have been for California to revert to their original FIRREA implementation language & policy under state law that said ANY appraisal had to be USPAP compliant and that any word or alternative euphemism used to express a value (opinion OR estimate) was in fact an appraisal.

        That specific wording as to what was a ‘covered appraisal’  has also been modified over the years to the current ambiguous verbiage that intentionally leaves everyone in doubt. The next few years will be interesting. Particularly on the litigation side.

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  5. Avatar Bill Johnson says:

    Speaking of CA and appraisals, and keeping your enemies closer than your friends, no thanks SingleSource to your offered $225 fee for a form 1004. Who cares if the property is 9,820 sf, of 7 bedrooms, 6.1 baths, 4 car garage, 1.76 acres, pool, unfinished pool house, is a short sale, in a gated community and due to condition, must be an all cash offer. Who cares if the cash offer (2.1 million purchase price), is 50% of a like sized and completed properties.

    Should I counter back at $275? Since they want it in 4 days, should I counter offer to 5 days.

    Seek the truth, and welcome to CA where crazy is normal.

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  6. AB-70 is essentially a rehash of the prior passed bill AB-624 that was buried in appropriations until it died an ignoble death. Largely due to the actions of OPEIU and the California Labor Federation after it was previously passed against strong opposition.

    I know that the CaCAP opposed the current bill (George St. Johns, President). I also know that ASA opposed the bill. THE AGA told George that we would NOT take a visible leadership role in opposing SB 70 as we did AB 624.

    At some point, California appraisers have to become actively involved in protecting their own interests. Other than George, NOT ONE California appraiser approached me or AGA to oppose this bill. Not one.

    Similar bills had already been passed by AI lobbyist-influenced legislators in multiple other states. Now that California caved, the rest of the U.S. should be no challenge for them.

    Now, the fun part (yes, there IS a fun part) will be watching the California BREA attempt to credibly determine, and explain to defrauded consumers why they have no jurisdiction. Of course, throughout their existence (according to State Auditor reports) OREA/BREA has had difficulty understanding the limits of their authority and their state mandate. I must in all honesty confess to a certain amount of anticipatory glee to this (not the defrauding – just the regulatory circus that will follow).

    Should be fun at the next AARO & TAF meetings too. For those that are unaware of it, TAF is also heavily populated by ex California enforcement officials.

    As for AI, they may just have pounded the last nail in their own credibility-coffin.

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  7. Avatar Pturner says:

    All of this trickery is for commercial, AMCs, and lenders.

    Where has A I been on oversight of the AMCs and adherence to FIRREA?

    M I A is where.

    But Evaluations will not impact the residential sector imo.

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    • Pat my friend, I think there is also significant spillover to residential and residential income portfolios. Especially for tax compliance work.

      At a TAF meeting in Redondo Beach,CA years ago AI claimed the number of appraisers that will benefit or be affected by this is actually very small. Further, that it would be used mainly for limited loan portfolio reviews where the investor didn’t need or want ‘full appraisals’. They only wanted the bottom line of what a property was worth.

      (1) IF so few appraisers were going to benefit or be affected, then why was a special law necessary for them? Under USPAP, restricted reports were always permitted and with several revisions to USPAP they can now be used for corporate entities rather than individual human beings. [All it takes is a scope of work master agreement with the client to provide specific reduced services and reference to that agreement] .

      (2) IF these assignments were NOT for federally regulated transactions (FRTs) then under existing California Law, they didn’t have to comply with USPAP anyway. What was the AIs rationale? Appraisers wanted to ‘capture’ Business Valuator’s tax work? Work that essentially allows them to charge $1,500 for DESK APPRAISALS of individual properties (including sfr’s)?

      Admittedly California’s BREA goes back and forth as to what is or is not required to comply, and attempts to leave all options open through use of intentionally ambiguous language in their state appraisal regulations. Correcting that language is all that was necessary for non FRTs.

      California allows ‘appraisers’ that have had their licenses REVOKED to continue to practice in non FRTs. BREA has no jurisdiction over ‘appraisers’ (trainees, or revoked former licensees) that don’t have licenses. However a LICENSED appraisers still falls within their claimed jurisdiction IF they identify themselves as a licensed or certified appraiser.

      So, what SB 70 did was enable real appraisers to act the same way as non-regulated appraisers and unlicensed appraisers already act. As feared by TAF and regulators years ago, the regulatory quagmire that will result will be far beyond the ability of BREA to monitor, regulate or enforce. There is probably no state agency across the country that is less competent to handle the new rules in a manner that promotes; protects or preserves the Public Trust (Whatever THAT is).

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  8. Avatar Cracks In the Concrete says:

    You know what would be awesome?? If the AI  Maybe could show residential appraisers what they are doing for the residential side. (it’s hard)? – Maybe instead of having their paid members telling others to call them so they could explain and try to convince them of these phantom issues they could provide documents and more on what they have done, are doing and willing to do in the future instead of all this secrecy. AI doesn’t represent me and they never will. They are just as bad as these amcs with the secret fees. Fraternity life at its best. Pay for your friends and to be accepted.

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    • Avatar Charles Baker says:

      Cracks – If you knew everything AI was doing for residential appraisers would that make a difference, or is your mind made up?  Just inquiring.

      btw – I’m a residential guy in SoCal and an SRA member.

      Charles

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      • Avatar Cracks in the concrete says:

        You are a brainwashed stooge for the AI. Well done. I’ll put my very res vs your sra and mai any day. I take pride in my license. You hide behind yours. Lol.

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        • Avatar Charles Baker says:

          30 years in the business. 10 with AI. Top residential appraiser in SoCal. Seminar developer, instructor, mentor, volunteer. No hiding sir, unlike you who won’t post his name. If you’re still interested in knowing what AI does for the residential appraiser just ask. I’d be more than happy to oblige. Good day.

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          • Mike Ford Mike Ford says:

            Please let us know what AI does for ‘the residential appraiser’.

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            • Avatar don says:

              The A.I.R.E.A trained a lot of us in the basics. The banks and S&L training helped, many of the old appraisals shops taught samples.

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          • Avatar Milton P says:

            Yes, Please enlighten us. What AI is doing for the residential appraiser?

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          • Avatar Cracks in the concrete says:

            It’s clear. You’re an AI fraternity brother and nothing anyone can say will make you say otherwise. You’re like a little kid who demands that candy. AI IS YOUR LIFE. SO SAD. you can’t think for yourself cause if you did you may piss off your fraternity brothers. Boo hoo. Shame you can’t think for yourself. It’s all about your dues to keep your SRA. Ha. Garbage.

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  9. Avatar Cracks in the concrete says:

    Wait. I have to post my name. HOW ABOUT YOU AI PEOPLE FINALLY POST WHAT YOU HAVE DONE FOR US RESIDENTIAL APPAISERS. YOU CANT. YOU WANT ME TO CALL YOU SO YOU TOO CAN BRAINWASH ME. HA. YOURE A FOOL

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  10. Avatar Major Dick says:

    Mr. Ford. Perhaps you could inform the group what the AGA has accomplished on behalf of its residential members. You claim to have the “weight” of the AFL-CIO behind you – although they’ve never heard of you (strange). Surely with “Solidarity Forever” you have accomplished something on behalf of your 25 members. Same with the CCAP and the REAA. I’m sure they’ve accomplished quite a bit on behalf of their 30 and 35 residential appraiser members, respectively.

    I’m sure all 50 cult members at the AppraiserFest will be taking a toke to all that they have accomplished. Remember…puff, puff, pass.

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    • Please be respectful of the opinions of others and do not attack someone for having an opinion that differs from your own; if you disagree with someone, please express yourself respectfully. Snide or rude comments are not constructive and certainly not helpful. Anyone coming on here to spread misinformation, disrupt threads to further a personal agenda, attack others, start flame wars, or get their jollies by sockpuppeting, et cetera, will be banned! Comments judged not to be in keeping with the spirit of civil discourse will be removed and repeat violators will be banned. We count on your cooperation and appreciate your support! 

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      • Avatar don says:

        Some days a glass of wine soothes the cracks in the spaghetti, Sometimes the tequila makes the cracks in the lime appear more damning. Our Appraisal organizations are all well intention-ed and for the most part have done well for the independent appraiser.

        Independent appraisers need to keep their freedom to contract ANY kind of value study, collect their monies and continue to run their business. Appraisers have the ability, and knowledge to take a contract class from the Local JR. College, write an engagement letter and a receipt for a COD. The form report is designed for the standard tract house loan, not for difficult situations. Appraisers can practice other disciples, just as physicians become attorneys to protect themselves

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    • Dick (or is it Brian?),

      1. We have successfully assisted over 100 members in the past 3+ years against false complaints filed against them. (most recent was a DFW TX appraiser falsely accused by Keller Williams agents recently-I just got the email and copy of State Dismissal letter yesterday).
      2. Jan Bellas has personally assisted many more in getting unpaid invoices paid
      3. Jan and I have both assisted members in getting removed from lender and AMC blacklists. Frankly, Jan does most of those. Check with her on specific count (IF you are a member) Otherwise we have no time to waste on doing research for you
      4. When BofA directed CoreLogic to tell appraisers not to inquire about details of pot growing operations back in April or May, AGA wrote several federal agencies. The OCC wrote back about two weeks ago confirming they ‘resolved the issue’. Last week on 100% Appraisers group a revised instruction was posted there showing CoreLogic (& BofA) reversed their previous instructions to appraisers-you decide if there was a connection. Office of Comptroller of Currency letter to me at AGA was received only days before I saw the updated post.
      5. We’ve written (and published) copies of many letters to federal regulators on a variety of issues; and spoken before them and TAF on many others.
      6. My personal favorite is of course my own case vs California BREA where we humiliated an incompetent and dishonest witness employed by BREA; caught him committing perjury on two separate issues and highlighted a number of other deficiencies in the CA BREA. Strange how despite repeatedly naming John Schmidt by name in public articles as the perjurer, neither he nor BREA have ever denied or refuted it; or filed an action to make me stop saying it. THAT’S because truth is an absolute defense, and I suspect they are just hoping it will go away.

       
      You DID highlight one big deficiency though. One we are aware of. That’s a need to a newsletter, that up until now has taken a distant back seat to spending what time we have in helping our members.

      Neither AGA, or CCAP had any part in organizing Appraiserfest though one of our members did (independently). I don’t know anyone in REAA so you’d have to contact them direct for any information.

      Dick, I’ve never needed to hide who I am either here or elsewhere. I understand some appraisers stay anonymous due to very real concerns about retaliation from those I suspect you represent. Still others do it because they lack the integrity and courage of their convictions to tie unsupported allegations to their own names.

      What I DO know is our members; along with ALL state coalitions; and independent help from responsible peer associations (such as ASA) have had enough impact to make positive legislative impact in some states; and apparently have made some larger AMCs nervous.

      What have YOU done recently to help OR unite appraisers?

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  11. Avatar Charles Baker says:

    A few points:
    1) Thank you Jonathan for removing the profanity, a gesture of civility.
    2) I was under the impression this was a forum for dialog, not a battering ram of hatred for a colleague.
    3) If you’d like to engage thoughtfully with other appraisers mainly in the SoCal area, AI members and non-members alike, check out NationalAppraisersForum, a Yahoo chat group run by Steve Smith.
    4) I will share what has already been written at length along with my thoughts about what the AI does for residential appraisers, but not on this forum. It seems some here have their minds made up and a respectful conversation is clearly not possible.
    5) Of everyone who’s posted on the subject, I respect Mike Ford, an informed voice of reason. We may not always agree but I respect his opinion and contributions to the profession.

    Charles

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    • Avatar Bill Johnson says:

      As a SoCal appraiser Charles, please tell me in my previous example (See above) how a residential assignment can be offered for $275 when based on the property it looks like they forgot to add a zero after the five? As a residential appraiser practicing in your backyard Charles, in my opinion there’s not a worse place in the nation relating to appraisal fees (Avg. by volume $350 (AMC presence) / cost of living ($755,000 housing (SD/Carlsbad), and expected turn times (3-5 days). Did I mention, to my knowledge that CA has no standard deadline relating to payment (90 days, no problem Landmark)?

      We are open to dialog Charles, but the wolves in this industry have been identified a long time ago, but yet they are bolder than ever when pushing their fake narrative.

      Seek the truth.

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      • Avatar Charles Baker says:

        Bill – Residential AMC fees are lamentable, no disagreement there. Non-residential appraisers are impacted as well. It’s a real problem and will only get worse as data analytics, hybrids and bifurcated appraisals improve and gain wider acceptance. Big data and automation is a problem in our profession as it is in most others. No one is immune. AI’s primary mission is education and advocacy but we’re a relatively small player compared to the agencies, bankers, regulators and Realtors. One way to up your game is to become the expert in your market; write and blog; specialize; speak at local Realtor offices; get into litigation and expert witness work; join one of a number of organizations; take any class by George Dell / Valumetrics. I get a lot of referrals from MAI’s for high-end complex residential assignments, litigation, trust & estate work, etc., some of which require a designated appraiser. Is a designation a cure-all? No. But I’m a better appraiser as a result and its helped my bottom-line.

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        • Avatar Bill Johnson says:

          Thanks for the response Charles, I get it, however if AI’s primary mission is education and advocacy, then I think you’ve earned a C6 condition rating. “The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components”.

          Please provide a cost to cure where AI can be bumped up to a C4 condition rating (due in 24 hours).

          The AI’s message is unfortunately falling short when it comes to reaching those in a position of power.

          Seek the truth.

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    • Hi Charles, this is the AB admin. Jonathan is the author of this article and does not moderate or manage this blog.

      We spoke to the author of the comments in question (cracks in the concrete).  He apologized for his crude comments and asked that we remove his “edited” comments. And we did.

      We ask posters to be civil and we do not make a habit of censoring language and/or passionate disagreements. Rude comments may deter greater participation among our readers and that’s why we ask our readers to strive for more civil, respectful discourse. Undeniably, discourteous comments are not a new phenomenon and many news organizations and websites struggling with the same issue have eliminated online comments altogether. Yet we still value in providing this platform for our readers to discuss issues we face in our industry. In fact, an essential part of AB is to give a voice to appraisers, alternative viewpoints, solutions and ideas by promoting thoughtful dialogue.

      It’s a balancing act, to be sure, since we as appraisers often express strong opinions on topics affecting our livelihood and the appraisal industry.

      We hope that you continue the discussion here. We will monitor the comments closely to ensure a constructive interchange is maintained. Thank you for being part of this effort to promote respectful discussion.

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    • Hi Charles,

      The reason for the intensity of your respondents here comes from decades of AI stonewalling appraisers, mainly residential members by never explaining policy positions, especial for those that damage residential appraisers. If you are part of the leadership ladder than you can’t see it. Many first class tickets for friends and family to valuation conferences around the world or the long denied FNC deal that flew in the face of residential membership needs or a $400K CEO salary by a two-time president who was at the helm during the downfall is tone-deaf at best.

      I have no personal animus towards AI itself. But I have a personal animus towards any organization that stopped serving its members years ago, but instead, exclusively serves senior leadership or else their designation is in jeopardy.  We never get straight answers. If you are in the inner circle as you seem or aspire to be then you can’t see it. AI Leadership lives in a bubble because they don’t interact with mere membership mortals.

      I quit AI National when they quit TAF because of the dishonest video that Leslie Sellers made about the reasons for it which did not match the actual reasons I was told by the same people in the room. It was all about his ego.

      You’ve claimed here that AI has done a lot for residential, yet your current CEO formed a residential committee 18 months ago to explore why they have ignored residential appraisers yet has never reported anything back. That’s your answer. My criticism has been said in the public domain frequently for the past 2 years hasn’t had any impact on AI National’s behavior. I’m sure active leadership are nice people – I’ve met some. But collectively, their actions been largely self-serving and they feel is above reproach. I believe the SRA brand has been damaged beyond repair by the actions of AI National (think Scott DiBiasio’s clandestine state ops to push for evaluations and only gets a handful of support from a few locals that aspire to rise up the ladder but will never be asked). I think the MAI is about 5-7 years from near irrelevance directly from AI National’s behavior.

      I’m sure you’re a nice guy too, but your understanding of your own organization is subject to a strong helping of cognitive bias, giving AI National way more credit than it deserves by its legacy of relevant inaction and irrelevant action during the Grubbe reign. This is why your membership has fallen by a third since 2006, more than licensing trends have slid.

      In other words, while Rome is burning, your organization is working hard to tear down the value of our profession without an explanation. We deserve an answer but it is also impacts those outside of your organization and that’s why we are all so angry. We’re not morons. We are hard-working people that trust this organization to lead the way and didn’t expect it to have a different set of values.

      I’ll elaborate why SB-70 will damage our profession in my Friday Housing Notes. In the meantime I have a lot of work to wrap up before then.

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  12. Avatar Advocate says:

    Mr. Baker, I do not disagree some use public forums in an abusive manor. But honestly, I do not understand why you can not just come out and help others understand what AI is doing. By hiding behind a smoke screen, and that is exactly how you come across, you are just leaving everyone hanging to make their own conclusions; right or wrong. Sadly, your actions encourage such behavior. If you truly are supportive of AI’s actions, why not just help educate those who are not informed?

    Another “AI Poster Child” did the exact same thing a while back. He refused to discuss what AI is doing for residential appraisers, but defended their actions publicly. It seems AI wants to continue to hide behind a cloak of secrecy. How is that helping AI? How is that helping appraisers? If AI is doing all these wonderful things for the residential appraiser, what is there to gain by not sharing what they are doing? If you are not willing to share publicly could you at least explain why not?

    I have a lot of friends and colleagues that are designated members of AI. They too have issue with many of the actions of AI. Many have expressed dissatisfaction with the lack of transparency on AI’s actions, but remain members. (for how long is to be determined) Does AI not want to grow? Do they not want new members? Why all the secrecy?

    With all due respect, you loose a tremendous amount of credibility when you refuse to support your statements made in a public forum.

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    • Avatar Charles Baker says:

      This thread has deviated somewhat from the original post, but be that as it may, I’m happy to share. Along with serving as SoCal AI Chapter president I run my own shop and work most waking hours, so forgive me for not responding right away. I’ve got three speaking engagements over then next three weeks, a chapter conference call and some travel. Allow me to reach out to some of my residential colleagues and a few folks in Chicago so we can cull together a comprehensive list. The aim is not to convince or change minds here, merely to offer another point-of-view. I appreciate your openness.

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      • Avatar Advocate says:

        It has now been 5 months since you stated you would share what AI is doing. We have heard nothing from you.. crickets, crickets, and more crickets. Do you have any intentions of following through with what AI is doing to help appraisers?

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        • I can’t (won’t try to) speak for Charles, but AI joined with ASA, AGA and a host of other recognized national appraisal groups, along with several state coalitions to oppose the proposed deminimis increase. Credit where credit is due; their participation was helpful (imho).

          The AFL-CIO and Americans for Financial Reform D.C. Lobbyists also wrote their own letters opposing the deminimis increase. They represented well over 12 million people and about three dozen national consumer/taxpayer rights groups & organizations like the NAACP (many others as well).

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        • Avatar Charles Baker says:

          Just ran across your post, Advocate. So, ten members of the Government Relations Committee for AI from across the country are meeting in DC in May. I’m one of the ten. It’s a full-day sit down with reps from the GSE’s to discuss waivers, bifurcated appraisals, the use of “inspectors”, revisions to the 1004, etc.

          We’re also discussing the deminimis threshold increase, SBA, recent legislation at the state level (Utah for example, allowing licensed appraisers to perform evaluations, SB140), a petition by Accurate Title in Florida asking for a declaratory statement that evaluations prepared by non-appraisers are not evaluations, etc.

          Regarding evals – lending institutions always have the option to obtain an appraisal even if they are permitted to utilize an evaluation for a specific transaction. Some lenders do, and some appraisal companies (I’m aware of Valbridge and BBG), have developed “Evaluation Restricted Appraisal Reports” that they offer to lending institutions as evaluations. They’re really appraisals, but they meet the institution’s need for an evaluation.

          In most states, certified appraisers cannot produce “true” evaluations – a non-USPAP compliant product. Florida is one of the exceptions as a result of an AI advanced bill in 2017. Appraisers can produce RAR (or other reports) that meet the requirements for an evaluation. But they are appraisals and institutions don’t always need or want an appraisal. If a transaction qualifies for an eval. in most cases that is the service/product they want. If the law requires an appraisal, or they want a USPAP compliant appraisal for whatever reason, then that is what they will get. \

          Last year, CA Governor Brown signed into law SB70, the bill promoted by the Appraisal Institute’s California Government Relations Committee, which gave rise to TAF’s 4th exposure draft floating the idea of eliminating the restricted report option entirely. After much flack, they came essentially embraced the core issue in SB70 – allowing restricted use reports for more than one intended user.

          Outside of the appraisal niche 2018 bills AB 375 and its amendment SB110 were passed and enrolled. This is commonly known as the California Consumer Privacy Act (CCPA).

          Important to appraisers is “The CCPA defines “business” that the Act applies to as a for-profit entity that collects consumer personal data that meets at least one of the following thresholds:
          • Annual gross revenue over $25 million;
          • Annually buys, receives, sells or shares the personal information of 50,000 or more consumers, households or devices for commercial purposes; and
          • Derives 50% or more of its annual revenue from selling consumer personal information.

          It is unlikely that most local or even regional appraisal firms would be regulated by the California Consumer Privacy Act but likely the large national appraisal firms will be regulated by CCPA. CCPA, its future modifications, and it actual enforcement practices warrants our future monitoring.

          There is a probability that a split property tax role initiative will be on the 2020 ballot. A split role does not necessarily directly impact our businesses. However, it is a factor to consider in our professional practices. While nothing is certain, the split role initiative likely will call for regularly scheduled, but not likely annual, property tax reassement of all non residential properties. At this point the political process has not worked its processes in defining the spit line of the split tax role. In the mean time the potential of a split tax role may be a disincentive for investors to choose California investments. It may create incentive to choose investments in
          more stable operating expense marketplaces.

          On the Judicial front, the big news for appraisers is on April 30, 2018 the Supreme Court of California ruled on the case of Dynamex Operations West, Inc., petitioner, V. Superior Court. S222732 v. Ct.App. This Supreme Court decision will in California forever change the business structure of the appraisal, and many other industries. This case has to do with defining when thought to be independent contractors are actually legally employees. In this massive 82 page Judicial decision, the California the Supreme Court has defined all employment as an employee relationship.

          The California Supreme Court created a unique to California “ABC test” which presumes that workers are employees and places the onus on employers to prove otherwise. The decision creates an ABC test. The ABC test presumptively considers all workers to be employees, and permits workers to be classified as independent contractors only if the hiring business demonstrates that the worker in question satisfies each of three A, B, and C conditions:

          (a) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact;
          and (b) that the worker performs work that is outside the usual course of the hiring entity’s business;
          and (c) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

          It appears likely that the California Department of Industrial Relations (DIR) will first focus on the so called gig economy such as Uber and Lyft. There will be interesting litigation over such matters as is Uber’s “business” ride sharing, or is its business technology to connect ride sharers.

          How, about the legal question of is providing an appraisal to loan investors in a loan part of the Bank or Brokers inside not outside the usual course of the hiring entity’s business. The, DIR will certainly get into the professions, including appraisers, accountants, engineers, and such.

          An element of the Judicial decision is the vesting of rights of individuals or class action group suits against employers for back wages, benefits, and penalties for alleged missclassification as an independent contractor rather than being classified as an employee.

          We are aware of at least one appraisal company being sued for independent contractor misclassification. Test B is a tough test for the appraisal industry.

          On a just interesting front is the New Jersey US District Court case McNamara v Grewal filed January 7, 2019. I don’t have the space to lay out the entire case. However, this is a case in which two appraisers are suing the New Jersey State Board of Real Estate Appraisers pursuing many claims. The interesting part of the case is plaintiffs’ claims the Appraisal Foundations has constitutional authority to set appraisal standards solely for appraisals in support of Federally Related Transaction, (FRTs) (Federally insured loans). Plaintiffs contend it unconstitutional for the New Jersey State Board of Real Estate Appraisers to enforce USPAP in enforcing State Licencing law relative to non FRT appraisals

          The AI residential appraisal project team (RAPT) will be releasing three webinars this year put together by members. I’m chair of the team and will be authoring one of them.

          Most of AI’s government relations lobbying budget is directed towards residential-related issues.

          I’m sure your local AI chapter would welcome your attendance at any offering, mixer, seminar, etc, where you’d be able to express your thoughts and engage with designated members. All the best.

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          • Hello Charles:

            1. Thank you and Jason Fischman for the recent invitation to speak before the SoCal Chapter of AI in September, and thank you for keeping us informed on the above issues and actions. You said you would do so, and have.

            2. Utah has decided appraisers may do ‘evaluations.’ Can’t see how that is a good thing since FIRREA specifically states that an evaluation may not be called an appraisal. Since federal law prohibits evaluations being called appraisals I think there is a strong need to differentiate between what evaluation is and what an appraisal is to avoid confusing consumers and corporate users of both services.

            Proof: your statement that “Some lenders do, and some appraisal companies (I’m aware of Valbridge and BBG), have developed “Evaluation Restricted Appraisal Reports.” If they aren’t sure what product they are offering, then they shouldn’t create forms for it. The name itself indicates they don’t understand current USPAP or the difference between the two services. I sincerely hope the attendees of the AI Government Affairs Committee / GSE meeting in DC take the time to differentiate the completely different services covered by the terms “evaluations” and “appraisals”.

            3. States laws as to who can perform what services have become extremely confused. Originally in most states, if the term value or ANY of its euphemisms were used, an appraisers license had to be obtained. The only exceptions were: (1) Assessors; Probate Referees and brokers offering opinions strictly for the intended purpose of attempting to obtain a listing. California’s language has become extremely confusing and unclear. It is once again argumentative rather than clearly stated in State Law.

            4. It’s unfortunate that TAF considered removing the”restricted report at all. Then again TAF’s actions and motivations have for decades now, become self-serving accommodations to their sponsor’s whims. TAF has long outlived any meaningful usefulness it once had. It has simply lost focus of the responsibility that Congress charged it with.

            5. Respectfully disagree about there being a ‘probability’ that California will adopt a split roll taxation program in the future; though I don’t doubt there will be a public effort to (once again) attack Prop 13 (Ca Constitution Article XIII); but frankly by any analysis, it is Prop 13 itself that allowed property values in California to rise so high; and frankly have provided far more tax dollars to the state than the free for all property tax alternatives in most other high tax rate states. The war front will be whether it is SFRs or commercial users that additional tax revenue will be sought from. It will be an interesting ‘fight’.

            5. Employment misclassification claims are the low hanging fruit for attorneys. State and federal regulators are actually pretty clear (and favorable) to such suits. They are easier to pursue than any other type of claim against lenders and AMCS engaged in FRTs for the following reasons: (A) Complainant attorneys don’t have to be certified for federal cases-only their own state bars (B) Each state has different interpretations of how they are supposed to enforce or implement FIRREA and Dodd-Frank at the state level. 50 States and 7 territories; each with its own interpretation. (C) Is going to be the big determinant of our future right now.

            Charles, we remain far apart on certain issues related to lowered actual standards while there is a public pretense (TAF not necessarily AI per se) that greater requirements are being promoted.

            It still appears that AI is supportive of the business models developed by Accurity; William Fall, PCV Murcor and a few others where MAI and in limited cases SRA designations are promoted to attract customers for national appraisal mills, even though those same designated members of AI have little or no expertise in the states their companies operate in; and they certainly are not personally reviewing any appraisal reports. It’s a national system of downline delegation of responsibilities. I know from first-hand experience that at least one of those I mentioned had the supervising managers signature rubber stamp signed by a secretary. (I will concede the desk reviews by non designated staff were pretty good in that one vendor’s case).

            All of your thoughts above were worth writing a separate article to AB, so they don’t get buried way down in old threads.

            AI reached out and was supportive of past national groups opposition to increasing the de minimis. We don’t and likely won’t see eye to eye on all issues, but that effort raises one’s hopes.

            Charles, respectfully, Johnathon was not wrong in his post about AB70. It remains bad legislation that undermines appraisal integrity and the public perception of our professionalism.

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  13. 2. Why would any care or consider David Graeler of Nossaman to be a credible representation of appraiser opinion or appraiser interests? Nossaman is a law firm.

    NOSSAMAN ONLY IRES MAI, APPRAISERS.

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  14. Before SB 70…
     
    Business and Professions Code
    DIVISION 4. REAL ESTATE
    PART 3. LICENSING AND CERTIFICATION OF REAL ESTATE APPRAISERS
    CHAPTER 2. ADMINISTRATION
    SECTION 11319
    11319. Uniform Standards of Professional Appraisal Practice. Notwithstanding any other provision of this code, the Uniform Standards of Professional Appraisal Practice constitute the minimum standard of conduct and performance for a licensee in any work or service performed that is addressed by those standards. If a licensee also is certified by the Board of Equalization, he or she shall follow the standards established by the Board of Equalization when fulfilling his or her responsibilities for assessment purposes.
     
    After SB 70…
    Bill Text
    The people of the State of California do enact as follows:
    SECTION 1.
     Section 11319 of the Business and Professions Code is amended to read:
    11319.
     (a) Notwithstanding any other provision of this code, except as provided in subdivision (b), the Uniform Standards of Professional Appraisal Practice constitute the minimum standard of conduct and performance for a licensee in any work or service performed that is addressed by those standards. If a licensee also is certified by the Board of Equalization, he or she shall follow the standards established by the Board of Equalization when fulfilling his or her responsibilities for assessment purposes.
    (b) Notwithstanding subdivision (a), a licensee shall not be required to comply with provisions of the Uniform Standards of Professional Appraisal Practice that provide a limitation on restricted appraisal reports to intended users other than or in addition to the client if both all of the following are met:
    (1) The licensee obtains the consent of the client in advance.
    (2) The report the licensee prepares is not related to any of the following:
    (A) A federally related real estate transaction.
    (B) The purchase or refinance of a residential dwelling of one to four units.
    (C) A transaction subject to Section 10232.5.
    (3) The report clearly identifies all intended users and states that the opinions and conclusions set forth in the report may not be understood properly without additional information that is in the appraiser’s workfile.
    California’s appraisal language has been ambiguous for many years already. The problem arises from the use of the words “Notwithstanding any other provision of this code, the Uniform Standards of Professional Appraisal Practice constitute the minimum standard of conduct and performance for a licensee in any work or service performed that is addressed by those standards” [italics/underline added].
    In fact, BREA (in it’s former iteration as OREA) was cited by the State Auditor’s Office for exceeding it’s authority in opening cases outside of its jurisdictional authority because they didn’t know what was ‘addressed’ and what wasn’t.
    The California BREA has already demonstrated itself to be incompetent in enforcing USPAP largely because its senior personnel either don’t understand USPAP OR the differences between USPAP and other agency special requirements or simple guidelines. Aside from the fact that some have not performed a real appraisal for a non state agency in nearly 20 years.
    SB 70 (which is really no more than a repackaged AB 624 from 2015) will be so far beyond their abilities to follow that California enforcement will become little more than a giant cluster-flop. Expect MORE coerced consents, rather than fewer.
    Couple this with the fact that the State has ZERO authority to supervise or regulate NON-licensed appraisers already, and any pretense of preserving the Public Trust in any meaningful way goes right out the window.
    I don’t fault the appraisal institute for this. I fault the State Legislature.
    AI – Appraisal Institute
    AI – Artificial Intelligence
    AI – Absent Intelligence
    Readers can decide which AI is at play here. By the way, Item C above re Section 10232.5 adds a whole new level of confusion to the mix.
     
    Hard to see how an organization sponsoring this kind of work can credibly claim to be the premiere appraisers of anything.

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  15. Avatar John Pratt says:

    I could not find the web site for National Appraisers Forum, can anyone provide that to me. I would like to check it out to see if it is worthwhile. jmpappraisals@att.net

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AI Damaging the Livelihoods of Appraisers

by Jonathan Miller time to read: 3 min