Frivolous Complaints Against Appraisers
TALCB noted that roughly 70% of all complaints against appraisers are unfounded…
The American Guild of Appraiser recently wrote to Texas Sunset Commission expressing member concerns and suggested solutions. We urge readers to copy, paste, edit and send their own comments – even out of state appraisers. Click here to send your comments.
Posted AGA comments and concerns
- Appraiser complaints are allowed to be filed against appraiser by third parties that are not the clients. The appraiser has no recourse to these for recouping costs of defense.
- Third party complaints by non clients (agents; brokers, buyers, sellers) serve only to defeat the intent of Dodd Frank appraisal independence requirements. The message to appraisers is clear: “Do as we wish or we will file costly complaints against you.” It’s routine policy for CoreLogic-Wells Fargo.
- A vague and ambiguously worded complaint alleging non compliance with USPAP can force and appraiser to spend tens of thousands of dollars in defense. In BEST CASE scenarios, they must face the gut wrenching impact of false complaints hanging over their heads that can potentially end their careers.
- ALL Texas appraisal investigations and reports should comply with USPAP as well as Texas Law. The measure of compliance with USPAP is what one’s peers would do in similar circumstance — not whether an ardent prosecutorial ‘attack’ may successfully allege against an under represented appraiser. Few attorneys in the country specialize in USPAP cases as handled via Administrative Law Courts.
- TALCB must investigate all complaints. This is unnecessarily costly with (per TALCB) 70% being unfounded.
- Pre screen and dismiss out of hand all value related complaints alleging unspecified USPAP violations from non clients. Do so prior to even asking for a work file which is when the appraisers burden and angst starts. Simply notify them that a complaint has been received and verification of whether the complainant is the client or not is requested (proof being limited to a copy of the report showing who the client is).
- ONLY when pre screening of a non client complaint shows substantive evidence of probable non compliance with USPAP should a work file be requested; and a formal in depth investigation be undertaken.
- Currently Texas Law prohibits real estate agents from being fined for frivolous complaints by TALCB. This should be changed so that ALL unfounded (frivolous) complaints result in a separate complaint against the originating agent being filed by TALCB with TREC.
- Licensed Brokers and Agents in particular must be held accountable for their retaliatory, & often defamatory actions. They should not be permitted to use State Enforcement Agencies to intimidate appraisers into violating their legally mandated independence without significant penalty.
- Texas Law should be modified so that any such non specific, generalized alleged USPAP complaints filed by agents, brokers OR their clients at the agents urging subject the agents or broker involved to direct liability for recovery of all investigation costs by TALCB as well as all costs of defense expended by the appraiser whenever there is no substantive violation of USPAP found. It is only by imposing severe penalties on complainants that file frivolous complaints that the abusive practices by 3rd parties can be ended.
- TALCB in a recent webinar noted that roughly 70% of all complaints are unfounded. When 7 out of 10 complaints are unfounded, then 7 out of 10 appraisers scrutinized have been subjected to unnecessary stress and defense costs with no meaningful recourse.
- NAR and others are reported to be encouraging third party complaints as a common tool in dealing with what they perceive to be ‘low appraisals’. This undermines the public trust.