Frivolous Complaints Against Appraisers

Michael Ford

Michael Ford

General Certified Real Estate Appraiser at Michael F. Ford Appraisal
Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory
Michael Ford

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TALCB States 70% of All Complaints Against Appraisers Are UnfoundedTALCB 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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. TALCB must investigate all complaints. This is unnecessarily costly with (per TALCB) 70% being unfounded.

Suggested solutions:

  1. 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).
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
Image credit flickr - Hash Milhan
Michael Ford

Michael Ford

Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory

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72 Responses

  1. Ron Dame says:

    I’m not in Texas, but am dealing with a frivolous complaint by a non-client agent. I hope other states look at this too.

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  2. Rick Hemry on Facebook Rick Hemry on Facebook says:

    A couple years ago, one agent in the DFW area told me her broker wants complaints filed on every appraiser that has an appraisal which doesn’t support the contract price for their listings or sales.

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  3. Kathy Hubbard Bright on Facebook Kathy Hubbard Bright on Facebook says:

    When will agents learn that price per square foot is not a reliable method of determining value?

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  4. Michael S. Elliott, SRA, AI-RRS says:

    This is all wonderful and I hope it succeeds, however it’s not going to be taken seriously by state officials if this proposal was sent with the multitude of spelling, punctuation and grammatical errors noted in the article above.

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    • Eric West says:

      Well Mike did specify that his comments above can be edited. You can submit your own or edit his with the correct spelling, etc. At least he’s doing something no?

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      • Michael Elliott, SRA, AI-RRS says:

        Yes, but when you send a poorly-written rant that attacks “vague USPAP complaints” using another vague attack on a national corporation with no evidence presented (“policy” at CoreLogic) that only serves to make the appraiser position look radical and unserious to people charged with making public policy. Just so my words don’t get misconstrued, there is plenty of evidence regarding CoreLogic and I am not their defender, but you can’t ask people to change laws and public policy using vague accusations against big companies. Sure, he’s “doing something”, which is to make appraisers look unserious and unprofessional. This won’t be given the time of day at the appraisal board or by any state official. What would be the proposed wording of a law or regulation that determines what a vague or frivolous complaint is? Specifically, wording that could be used to determine something is frivolous prior to reviewing the appraisal report. I’ve been the subject of one of these complaints myself and would like nothing better than to see something done about it, but other than the proposal regarding real estate agents there is nothing specific here that will help weed out what is a “frivolous” complaint at the beginning of the process.

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    • Mike Ford Mike Ford says:

      Point taken Mike. However in addition to my own appraisal business; I expend from 20 to 40 hours a week on volunteer activities for the guild and another 10 to 20 hours writing or dealing with member problems. Editing typos in online docs is very low on my list of priorities.Despite my infamy for typos and grammatical imperfections I’ve managed to communicate the gist of concerns to regulators a time or two. As noted, feel free to correct, modify or amend. Tks.

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  5. Eric West says:

    Excellent suggestions Mike. Maybe AGA can get involved in getting this happen in all states?

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    • Mike Ford Mike Ford says:

      Eric, thank you. We will continue to support State Coalitions as we usually have done with VaCAP; CaCAP and several others that ask or are receptive to it; though most of our efforts are toward national issues and problems (with some overlap). These are some of the types of issues at which state coalitions can excel.

      Texas made it very convenient to try to help. Most states are not this forth coming or pro active in seeking input. I’m still waiting for a reply from California’s State Auditor on issues out here.

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  6. sdMike says:

    I’m not sure whether this is effective or not, but it was suggested by Peter Christiansen (noted Appraisal Law attorney for LIA). He said that the following comment, when included in the report, was having some measure of success in courts of law and the judges are paying attention to it. I add this to the Additional Certification area above the Cost approach or in addendum.

    “No purchaser or seller of the subject property, nor any borrower are intended users of this appraisal and no such parties should use or rely on this appraisal for any purpose. All such parties are advised to consult with appraisers who they hire, or other professionals of their choosing”.

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  7. Jeff Weeks says:

    Thanks for the article Mike. If anyone is dealing with a complaint or wants great advice and assistance in the future I suggest you join the American Guild of Appraisers. Mike and his team of professionals are vital in helping you defend your work and create a good defense against. I will be a lifelong member of the AGA

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  8. Don says:

    Wells Fargo has filed 4 complaints with the Florida Real Estate Appraisal Board against me for USPAP violations. I won all 4 cases. Wells Fargo didn’t get the loan due to low appraisal value so they complained.

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    • mike ford mike ford says:

      They do it as a matter of policy. They did it under Rels and they do it through CoreLogic. We have been making small inroads with them so I don’t want to rub their noses in it right now but THIS policy must stop. Every single appraiser that gets a complaint by WF in support of their cause to shop second higher appraisals should turn the amc in to the state…THEN turn in the two out of state reviewers to their states (emails will infer they are in Phoenix but they won’t be…look them up in ASC)..Then turn WF into FinCEN. Start pushing back people! If regulators won’t deal with this then start complaining to federal Financial Crimes Enforcement Network. FRAUD is being perpetrated almost every time they pull this. WF is merely creating a false paper trail by the complaints. We know the names of some of the players already.

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  9. Randall R. Davis SRPA, SRA says:

    I am one of two State of Michigan complaint investigator appraisers. I worked from 2006 to 2013 when 80-85% of the complaints were called for and reasonable. I was brought back in 2016 and currently find 90-95% of the complaints are simply homeowners whining about the appraised value being too low to refinance.

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    • Dan Johnson, SRA says:

      Good call Randy!

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    • mike ford mike ford says:

      Randy, what can we do to correct that in Michigan? We are willing to try. email to mike@mfford.com

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      • Randall R. Davis says:

        Mike, not really sure what you want to correct but the fact that during my tenure I have educated many appraisers to understand that “Big Brother” is enforcing state statutes which requires of all things, compliance with USPAP. Once the word got out appraisers began to shoot straight. Those who didn’t are working at Cosco as a greeter. With my experience dealing with dufus appraisers I have some good stories which I have turned into examples for a Michigan License Law Class I teach for AI. The state requires appraisers to take a two hour license law class for license renewal.

        As for the homeowners bellyaching about values to meet their needs, you can’t fix stupid without significant education. Maybe every borrower should take a basic “Understanding An Appraisal and The Appraisal Process” class…..a chance like a long lasting snowball in hell.

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        • Baggins Baggins says:

          Financial education is glaringly absent through all levels of required schooling. Why would we want to educate future consumers on the value of land and liberty, when it’s so much more profitable to teach them to be social justice warriors, sell them iphones and monthly subscriptions, get them to buy into new tech. The schools themselves are corrupted due to federal influence, the school has become the vehicle by which young consumers are solicited to. Localized school curriculum can turn it around. Start with that.

          In the meantime, refried refi’s go hand in hand with predatory lending. I can save you a few dollars on your monthly, call me back!

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        • Mike Ford Mike Ford says:

          Randall, we all know BB is watching and frankly most of us like the concept of federal requirements to adhere to USPAP. What we don’t like is that there are 57 flavors or interpretations for it.

          TAF has been focusing (quietly, behind the scenes) on the enforcement side of it with AARO, while not only ignoring the “measure of compliance” being what one’s peers would do; they are actually teaching that compliance is unnecessary for appraisal reviewers doing investigations.

          I may be swimming against the current, or worse peeing into the wind but an even playing field with the same rules for all is what I’m looking for.

          Keep educating, and maybe eventually there won’t be any “dufus appraisers”—though one has to wonder how AQB approved tests were ever passed if they really are dufus. Maybe Big’s testing isn’t worth a damn?

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          • Randall R. Davis says:

            Mike; It is not that State Investigators don’t comply with the INTENT of USPAP but rather do not WRITE their investigative reports to meet Standard 3 requirements.

            Our investigations research and support/don’t support the Complainant’s concerns. We also the opportunity to review the entire report for factors not directly addressed in the complaint but find to be in violation of USPAP. The complaint “opens the door” for a review of factors that the Complainant, who may have not clue what USPAP, did not consider

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            • Sort of like being a little bit pregnant Randy. Either one is or is not. Re USPAP either one does or does not comply. SR 3 written reports are now under SR4 but we get the point.

              MY point is that claims of USPAP compliance without documentation require trust. In MY State Sr. Investigator John Schmidt of CA BREA committed perjury on the stand twice (in addition to numerous other deflections and diversionary responses). Two witnesses testified to that and there was a third available-but not called. The state was more interested in rewording the ALJs proposed order so they looked less inept than they were rather than cleaning their own house

              Investigators are not entitled to any more trust than an appraiser is. In fact, their burden is the higher of the two. Many states make NO EXCEPTION for investigators compliance with USPAP…yet somehow investigators seem to think they are special exceptions.

              Randy “Our investigations research and support/don’t support the Complainant’s concerns” is not what’s required under FIRREA & USPAP and most states implementing statutes.

              The ONLY thing you (regulators – not you personally) should be doing is determining the appraisers substantive compliance with USPAP. Nothing else.

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              • Baggins Baggins says:

                Would appreciate an article on who ‘regulators’ are. How they get there, and how that structure works.

                They don’t teach that in most appraisal CE classes that I’m aware of.

                I’ve never met one that I’m aware of, hopefully never will.

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          • Baggins Baggins says:

            PSI testing like asked me nothing about FNMA compliance, legal appraisal principals and so on and so forth.

            Lots of theory and process questions, make sure appraisers know how to do certain analysis and understand certain concepts.

            As far as what really matters, adherence to guidelines, principals, understanding the myriad of regulatory authorities and how that influences appraisal practice, there is nothing there.

            Some suggest repeat testing to stay qualified. I object. What good would that do when the bread has no butter in the first place?

            Don’t worry, your new ‘manager’ took an 8 hour uspap class, so they’re qualified to hold your entire career in their hands, no license required.

            How is it that people whom have had their licensed revoked or likewise may have had no actual experience in real estate, underwriting, appraisal, or mortgage, now sit in appraisal process managers chairs?  Does not compute.

            I’m pretty sure the guys at PSI testing were not appraisers either. I did not stick around there long though, passed all 3 tests first time around w/ increasing grading and never looked back.

            Meanwhile appraisal insurance is similarly illogical and misplaced. Do you perform any appraisals over $3m? Holy cow, hell no I do not. Where is the question for hybrid appraisals? Where are the questions and billing scales based on volume? Where are the questions if you use outsourced services, number of employees and assistants, etc?  No distinction for mortgage lending vs other types?

            It’s almost like the insurance companies are in on the game of defrauding consumers. They don’t seem to care if appraisers do it right or not, or how they operate, and everyone’s insurance keeps rising. If you don’t do this full time they may not even insure you these days. If you game the system and make millions a year your insurance costs the same as the guys whom do less than a hundred reports. Does not compute.

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            • Mike Ford Mike Ford says:

              Baggs I took my tests back in the early 1990’s. Contrary to myth they were NOT easier then. It was a full day of testing (morning and afternoon) and covered everything from simple ownership interest identification through DCF with asset reversion value at the end.

              I can’t think of an area that was missed – though I suppose it’s possible. Ours covered legal aspects of RE for our state and if memory serves right, some generic legal concepts that could apply anywhere…but its been a long time.

              Let’s not lose sight of the fact that state tests are AQB approved. IF there is a deficiency in testing it originates with TAF.

              My objections to ongoing or renewal testing is that no other professions is required to do the same. Additionally, IF we are to be held to high standards then WHY are regulators and TAF constantly undermining quality and professionalism?

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              • Baggins Baggins says:

                I suppose if I were to have focused on legal the testing would have seemed more adequate.

                Being a lowly mortgage lending appraiser though, I learned in very short order that both testing and initial education was inadequate.

                That’s because nobody ever dealt with regulatory structure education. Nobody required me to read the FNMA guide, GLB, FIRREA, FDIC, HUD pages, VA circulars, or even any topical matter as a sort of icebreaker. I was never required to know any CO specific rules or legal language. I sought all of that out on my own and I’m absolutely positive that a huge swath of both appraisers and their amc and ‘direct’ managers have never read those documents either.

                Only professionally licensed persons are qualified to manage professionally licensed persons. Even then, qualifying them is hit and miss without the right qualification standards in place.

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        • mike ford mike ford says:

          Randy, When unsupported homeowner complaints are more than half of all complaints then some solution is necessary. Not ‘fixing stupid’ ignores the financial impact on innocent appraisers that now have to prove innocence (rather than having the USPAP Standard of Compliance applied); or to hire attorneys to defend themselves.

          At a minimum states should assure equal opportunity for appraisers to recoup defense costs against borrowers false claims AND regulators gross incompetence or outright malfeasance. Michigan is not among the problematic states as far as I know but California, Minnesota, Florida, Maryland, Oregon and Texas certainly have issues that need to be addressed.

          As more and more fall under the influence of AARO this list can be expected to increase.

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          • Baggins Baggins says:

            I know an appraiser who turned in another appraiser for grossly negligent work. As a result the state demanded both appraisers workfiles. The state let the complained upon appraiser off because he was relatively new. They ran the complaining appraiser through a complex process where he invested hundreds of hours defending his work. He received a quote from a lawyer whom would specialize in this sort of defense. The quoted legal representation cost was around $50,000.

            Can you please give us some real world perspective on what appraisers would expect to pay for legal representation, on average I suppose, if defending against state regulatory boards or other similar events?

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          • Randall R. Davis says:

            Mike, for the whining complaint with no merit, the cost for the Respondent is the time to put his/her workfile together, to write a logical reply why the Complainant’s argument holds no water and to then mail the entire package to the State. As I stated, a vast majority of the Respondents are then off the hook. There is no attorney involved. It is a different story when a complaint has merit, the appraise knows it and is trying to protect their assists and an attorney is involved.

            I am a peer, at a minimum, with 41 years of appraisal experience. Logic, common sense and reason are not overlooked when an appraisal complaint is reviewed. The “what would I do” concept is followed. If it is “close” the tie goes to the Respondent. Does a report have to be perfect? Hell no! NO ONE WRITES A PERFECT REPORT! A few minor imperfections is not a concern but many is another story.

            There are not many good things I can say about an AMC but there is one that is for the benefit of the appraiser. They review the appraisal BEFORE the client gets the report and often catch errors, oversights and incompleteness and ask the Respondent to explain, detail and/or correct. This, Mike, is a major factor that has reduced unfounded complaints.

            I am not “out to get” the appraiser who attempts to do an admirable job. I am here to make the public feel confident that the appraiser is worthy of the title. I have removed well over 100 so called appraisers from the business and have required a couple of hundred to take an educational update, IN A CLASSROOM, not online, for area(s) of deficiency. The State has deemed that shoulder to shoulder contact with other peer appraisers, has as great an influence on the basement dwelling appraiser as the actual class.

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            • Baggins Baggins says:

              Don’t spin lies and half truths. The mortgage lender assignment staffs do the same thing, and they experience less employee turnover, pay consistent fees, and do not have a financial incentive like amc’s do to drive down the appraisers fees for variable opportunistic and secretive gains. They’re on average better stewards than amc personnel.

              The proposal that the amc’s have reduced unfounded complaints is not a whole truth. All mortgage lender assignment without amc’s do the same thing. Quality control is supposed to be the underwriters job anyways, not the mere low level replaceable telecom amc clerks job whom is likely to have a quota to catch anything possible just to prove they’re providing something of value. Besides when those clerks lose those amc jobs, they often just bounce to being clerks at lender direct, a step up the ladder.

              Do you actually believe that if you’re not guilty, and the government is seeking potential prosecution, you’re all good without representation? Oh man, famous last words in history. Don’t shill for amc’s.

              We’re from the government and we’re here to help.

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              • Randall R. Davis, SRPA, SRA says:

                Baggins, Step back and note that the glass is half full not half empty. You missed the point that the AMC’s get the appraisal BEFORE the client and request revisions that COULD well be a USPAP violation. We have not seen the AMC filing complaints only the client/lender.

                As for attorney representation, you missed that point also. I was referring only to the frivolous homeowner complaint about the opinion of market value not being high enough for a refinance. I was not inferring that a lender complaint should be left only for the appraiser to defend. I have no idea what you are referring to with “..not guilty and the government is seeking potential prosecution”. We only ENFORCE USPAP on the guilty.

                You have a rather demented attitude if you even think I am not here to educate appraisers.

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                • Baggins Baggins says:

                  Justify co mingled fees before promoting amc’s.

                  I’m stuck in the basement because I refuse to be party to defrauding consumers by allowing amc’s to not return cost savings to consumers and instead pocket that in a pay to play operational environment.

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                • Bill Johnson says:

                  If AMCs are truly of value and are a benefit Randall, if the appraiser didn’t pay their salary, how many lenders would pay out of pocket 50% of the borrowers paid appraisal fee to have the AMC work form a checklist (Review)? Better yet, how many appraisers would voluntarily pay out of pocket 50% to have an outside AMC review their file before it goes directly to the lender?

                  The answer is very near zero, and zero%.

                  Seek the truth.

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                  • Randall R. Davis says:

                    What part of my comment about an AMC is not understood? Since they are being used they do serve the function as a reviewer prior to lender/client getting the reports. I guess you folks maybe too young to have seen the reports prior to AMC or are merely blind to the differences I am not saying the AMC review is perfect but they do catch many significant errors that when tallied all together could be a violation of SR 1-1 (b) and (c)

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                    • chris says:

                      I don’t want to jump in this, but I have to say, during 5 years of reviewing and re appraising the WORSE residential reports, asking myself “How could this person still be allowed to write appraisals ???? The AMC model, in a way, was to get these appraisers up to speed and keep the junk out of the system….You’re right, they have a check list, but why were these appraisers not checking themselves, which brought on the AMC…..things to ponder……as the very smart man says….”seek the truth”

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                      • Randall R. Davis says:

                        Two statements to live by and you will never (maybe) get into trouble:

                        1. Facts do not cease to exist because they are ignored.

                        2. It is wiser to find out than to suppose.

                        I also give this warning: “If you continue to screw up or don’t listen to me, I’ll tell your mom”.

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                      • Mike Ford Mike Ford says:

                        Chris in those five years of reviewing the worst appraisals, how many did you try to educate? How many others did you turn in to the state?

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                        • chris says:

                          Dozens of appraisers, when the lender read them my comment at the end of my review with said this appraisal and my review should be sent to the state government agency for peer review, they would call me and all say the same thing but I’m a good appraiser…… No funder ever sent any of them to the state because they said they liked the lenders they were working for.

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                        • Dan Johnson, SRA says:

                          When I review, I always try to educate and offer feedback and I always learn something from the appraisers I speak with as well. No perfect report, always learning and always a work in progress.

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                    • Bill Johnson says:

                      Many work without the AMC safety nets Randall and get along just fine collecting a full fee. In my experience, the ratio was often 10 to 1, meaning for every one time a meaningless issue was brought up by an AMC, the 10 other issues were often already USPAP compliant, and certainly meaningless but often excessively time consuming.

                      As it relates to the timing, who cares if the lender gets the report first before any other party (AMC). Considering our clients are required to be appraisal knowledgeable, as in they need the expertise to filter UAD flagged requests for relevance before sending to the appraiser, they surly have an expert team in place to monitor the appraisal process.

                      Lastly, with mostly appraisers here, stop insulting us by using the words, review and AMC in the same sentence. From 40 states away, the so called reviewer has no idea how to define my local neighborhood, narrow down sales to comps, nor have the skill set to determine adjustments, etc..

                      Your voice is welcome, but seek the truth.

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                      • Baggins Baggins says:

                        Just to clarify; The advancement in Alamode’s technology was the cornerstone of these review advancements, aka the EO auto reviewer tool. I’ve had the opportunity to review what lenders see when they log into MVP Pro side. It’s just a long check list of which rules to apply and which not to. All amc’s did is ride the FNMA UCDP standards wave and then provide the illusion of value added service because they turned regular warnings into hard stops. Paying for those ‘plug ins’ is in fact paying for abuse of the review process.

                        Sure, the process used to be rife with inadequacies. According to FNMA, it still is.

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                    • Mike Ford Mike Ford says:

                      I’m not too young Randall. I go back to when Fannie and others used to routinely field review 10% of ALL appraisals. Back then perhaps 1 in 10 or even only 1 in 20 from independent fee shops were bad. Up to 15% to 20% “could be better” but were still substantively acceptable. Back then (circa 1986-90) if an appraisal was bad it was usually deliberate; and only occasionally the result of laziness.

                      Then, when I jumped over to high volume multi state appraisal companies working for AMCs (specifically LSI & ATM) the significant exception rate shot through the roof.

                      AMCs do not, and never have ‘improved’ appraisal quality. In FACT just the opposite is true. Report requirements wee ‘dumbed down’. No because of the appraisers, but because of the ignorance of the reviewers that were incapable of dealing with market variations from one state to another. They needed one-size-fits-all review procedures. Not unlike many states regulators that are taught they don’t have to comply with USPAP.

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                      • Dan Johnson, SRA says:

                        I have to agree with Mike, AMC’s do not add value and they sure don’t understand USPAP or appraisal theory or concepts very well like Highest and Best Use, Excess Land etc. or any of the typical things appraisers run into on a daily basis in the field, they are primarily list checkers. Their comments are usually “do the best you can” or I’ll get back with the lender and then they never do and in the mean time the clock runs and your rating goes down if you don’t meet their due dates. All they do is order, track and try to keep the lender happy, couldn’t care less about the appraisers IMHO. Far more efficient to work with direct lenders, underwriter or better yet a staff with an experienced appraiser, but sadly those days are pretty much gone.

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            • Mike Ford Mike Ford says:

              Randy respectfully, you clearly have NO IDEA what you are talking about on costs to an appraiser!

              Minnesota appraiser JB spent over $38k to clear her name and record; NJ appraiser TF spent -0- the first time (though AGA spent a lot of time helping him) and he spent thousands the second time – again with AGA help – he was exonerated BOTH times. Maryland appraiser VJ spent over $48k at last tally – case being reopened but I can tell you from two reviews AGA commissioned, he did NOTHING wrong except think he could win in an ALJ case without an attorney. MY associates and I incurred over $148,000 in legal fees to clear ourselves.

              These are just a small sample of over 100 cases we’ve researched and helped members clear themselves in. E&O doesn’t come close to covering these fees. E&O only want to settle cases which is why so many coercive charges seeking consent orders exist.

              No cost? Hardly. ABOVE the value of the money though is that gut wrenching emotional punch when an appraiser gets a letter from a state board.

              You state you are an experienced ‘peer’? NOT UNLESS you are out there still doing fee appraisals you are not.

              MY state investigator came from a tax assessor background; had NEVER done a UAD reported appraisal and had no idea what CU was. He also had not performed a fee appraisal or any USPAP compliant appraisal for anyone in over 18 years! That particular ‘peer’ thought FNMA and USPAP were the same thing.

              He also had only a passing acquaintance with truth as a concept. THAT by the way is WHY well documented USPAP compliant state investigations are critical – to assure that ALL regulators are also playing by the rules. You may well be the exception that still takes ethical obligations seriously. Too many do not. Still others, are not even appraisers! Still others see it as a prosecutorial contest. NOT whether there is really guilt, but rather whether THEY can make charges stick.

              USPAP doesn’t state what one peer would do is the measure of compliance. It says what one’s peerS would do is. The metric is also NOT a tie goes to the respondent (which is a pejorative biased term to begin with). The ALJ/ALC metric is Clear and Convincing Evidence. Another requirement right up there with USPAP that some (if not many) regulators take for granted. Just like in state investigations where an appraisers 20-30 or 40 years experience makes no difference, YOUR 41 years only means that you SHOULD know how to conduct a USPAP compliant review…not that you DO conduct USPAP compliant reviews.

              Until YOU and ALL regulators conduct impartial investigations where a fully USPAP compliant review opinion is developed and reported in a fully USPAP compliant format…then you simply have zero credibility as an appraiser conducting state appraisal board investigations.

              Your ‘states’ determining rubbing shoulders is as good as a class, is pure hyperbole. IF that were true, then there should be NO online courses for any purpose in your state. Pure hypocrisy and arrogance by your state board officials.

              What your state HAS done is fallen victim to TAF and AARO’s sales pitch that only specially designed live TAF courses provide remedial training. Yet another arrogant assumption by people saying “Do as we say, not as we do!”.

              Is there a legitimate reason you folks think you do not have to adhere to the MINIMUM standards required for appraisers performing FRTs when you are conducting investigations as to USPAP compliance? I can’t think of one.

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              • Dan Johnson, SRA says:

                Mike, Randy is a very knowledgeable, respected and active appraiser…I can vouch for his work and what he does as an appraiser in the State of Michigan.

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              • Randall R. Davis SRPA, SRA says:

                Holy crap batman! I think you blew a fuse….or are about to.

                I have 41 years of appraising real estate and you have no clue what or how I think or work. Your opinion of MY work ethic as a complaint investigator and real estate appraiser is an insult with no support. I feel that I am protecting the integrity and promoting the appraisal business.

                Your, Until YOU and ALL regulators conduct impartial investigations where a fully USPAP compliant review opinion is developed and reported in a fully USPAP compliant format…then you simply have zero credibility as an appraiser conducting state appraisal board investigations. is non-sense. You have the bully pulpit but are lacking common sense. That my friend is for the “peer” and zero credibility comments you made. The form is nothing more than that. It is the research and documentation that make the world spin. Get in front of administrative judge and see what your form does….ZERO. You layout the facts, support it with indisputable details commentary and the judge will decide. Experience! Ya, I’ve got it. I’ll go before any judge and have in circuit, district, state full tax tribunals and administrative hearings and have continuously won for the correct reasons.

                You have and had factual commentary from an experienced investigator that know how and when to invoke decisions if an appraisal is in concert with USPAP or not. I’ve seen it, been there and corrected the perpetrator in an effort to cleanup a business I am proud to be a part of.

                Now I have go do a home inspection for an appraisal……as I do everyday. You see I am only a contractor with the State of Michigan on a part time basis. Some folks golf, fish or hunt but I enjoy reviewing complaints on my “days off”.

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                • Kathy Hubbard Bright on Facebook Kathy Hubbard Bright on Facebook says:

                  I knew investigators were warped. 😉

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                  • Randall R. Davis, SRPA, SRA says:

                    Actually, doing investigations is like reading a novel. Lots of twists and turns before you find out if the culprit wears a white or black hat.

                    One of the tools the put the bad guys in the hot seat was the invent of online aerials. Bing was one of the first that was reliable. Before Bing investigators had to have first hand knowledge of where the Subject and comps were and what land uses surrounded them. Bing was like an arrow in the bad guys heart. No longer could they report that no adverse or atypical land uses existed.

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  10. chris says:

    Just had a multi-family sale, paid 160k 14 months ago…. new sales price after maybe 10k improvements was 240k.

    Broker sent single family sales to support his sales price…lol… after hearing the appraised value, calls me and screams “You will never walk through one of my homes again !” I asked him….”you do know what a multi-family property is right? lol And he is a broker…..if you thought he was mad the 1st time, he shrieked liked an animal…which he is of course.

    My point being, make your reports 2nd to none and less complaints will be made as a sum accumulation of “mistakes” through out the report makes the appraiser look like a fool and exposed them to these complaints.

    Proof read 2 times as you are reviewing someones else work. it takes 5 minutes of your time,

    26 years here pissing people off with NO complaints…..Don’t rush !!! EVER !!!

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    • Kathy Hubbard Bright on Facebook Kathy Hubbard Bright on Facebook says:

      You must not be in Texas where 20% of all appraisers have complaints. Regardless if you’re right or wrong TALCB will FIND something wrong.

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        • Baggins Baggins says:

          CO as well. A symptom of greed where appraisers convince themselves it’s a science not an art, outsourcing essential analysis and typing duties in the process. If one treated typing and other assistance services like apprentices, which they should, that would be a time drain not a time gain. Does not compute. That’s my competition who set the discount fee and the 48 hour turn time, flips 2 a day non stop if not even 4 a day. Appraisers who don’t cheat like that know it takes far more time.

          The miracles of separation from loan production. You get fired if they give you too much work and you run late, if you upset someone and they file a false complaint, if you look the wrong way at the overworked appraisal assignment clerk who masquerades as a qualified manager, anything goes. The clerk will lie about the appraisers service to save their own job or merely to deflect simple criticism. The tech people whom put these platforms together think it’s their job to censor the appraisers voice as if we are toxic. None of them carry professional licenses and that is the problem.

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    • Mike Ford Mike Ford says:

      Chris what was the amount of the rent increase in your multi unit sale from the prior sale date? What was the original GRM vs the subsequent GRM?

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  11. Juliana Homstead says:

    I agree wholeheartedly with the suggested solutions. I was the victim of a frivolous complaint filed against me by a non-client. The complainant was the soon to be ex-husband of my client and felt my opinion of value was too high. His complaint stated that I was either incompetent or biased in favor of my client because I did not note significant property defects on the exterior of the townhome. This significant defect being a loose piece of vinyl siding that could only be seen from the fenced in back yard of the attached unit next door. He implied that I specifically did not include a picture of the left side of the unit in order to conceal this defect. I included the best picture of the left side that I was able to obtain without climbing over the 6-foot privacy fence between the two yards. It was obvious to me, from the picture he provided, that he had taken it from the neighbors back yard.

    His complaint also included some non-sensical verbiage regarding my reconciliation of the sales comparison approach that made it clear to me, that he did not have the slightest idea of the principle behind this approach to value. It was ludicrous to imagine that this complaint could be taken seriously. In the end it was dismissed as unfounded, but the process took 5 months. I had to write a rebuttal, contact my E & O Provider (fortunately it is most awesome LIA), and meet with an investigator. Even though I knew it was frivolous, it was time consuming and anxiety provoking.

    Sorry for this rambling post, but now I can get to my point. I wrote my rebuttal as clearly and concisely as I could, but with the impression that another real estate appraiser would be the one to review it. This was not the case. Apparently, an administrator of some sort reads the complaints and rebuttals and decides if the complaint should be investigated further. I believe that if an appraiser had read my rebuttal, the complaint would have been dismissed immediately. Instead, the complaint was “heightened” to an investigator who met me at a MacDonald’s about an hour from my home. I had provided my entire electronic work file to the appraisal board, including my scanned field notes and sketch, MLS sheets, excel analysis spreadsheet, and scanned notes from my discussions with listing and selling agents. The investigator was never provided most of this information. According to him, it might have been that it was so much information and they didn’t want to print it out.” The investigator was polite, seemed intelligent, and listened carefully as I explained some basic appraisal principles to him. He left to investigate a beauty shop complaint. Three months later the complaint was dismissed. The process in my state of Virginia seems terribly inefficient.

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    • mike ford mike ford says:

      Julianna you were fortunate. Virginia did not have any appraisal investigators before. Talk to Pat Turner over at VaCAP and NAIFA.   YOU and I must adhere to uspap…but state regulators don’t have to. How does that make sense when the fundamental concept of compliance is what PEERS would do? Will you appear at the DC AARO conference and speak to this point in October?

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      • Juliana Homstead says:

        Mike, I would definitely consider it. I am typically not the best public speaker. It terrifies me. Although, I think it is an important topic and would be happy to discuss it further with you.

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        • Mike Ford Mike Ford says:

          I understand Juliana. I’ve spoken before hundreds of public meetings (usually City Councils or Commissions)…my knees knock every single time. That nervousness is actually an asset. It translates to passion and increased credibility. IF it really is too hard to overcome (and that is NEVER a criticism); a letter submitted (or read) on your behalf by others can be just as important.

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  12. INCOMPETENT, irrational, unconscionable, STATE (OREA/BREA) EMPLOYEE, WILLIAM DRABICK SP APPRAISER, CAN BE SUED AS AN INDIVIDUAL

    STUART GROTEN, AN INDIVIDUAL, PLAINTIFF-APPELLANT,
    v.
    … WILLIAM DRABICK, AS AN INDIVIDUAL AND AS AN EMPLOYEE OF THE OFFICE OPINION OF REAL ESTATE APPRAISERS. . . DEFENDANTS-APPELLEES.

    V. Qualified Immunity

    37 The district court also determined that the state officials, in their individual capacity, were entitled to qualified immunity. Qualified immunity is an affirmative defense that must be raised by a defendant.25 Thus, a Rule 12(b)(6) dismissal is not appropriate unless we can determine, based on the complaint itself, that qualified immunity applies.26

    38 Government officials are given qualified immunity “insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.”27 Although the Fourteenth Amendment right to due process in the application procedure may not have been clearly established at the time of the alleged violations, Groten alleged that the appellees refused to give him the proper application materials and did not allow him to apply for the licenses which he sought. These ministerial acts are unshielded by qualified immunity, which protects”only actions taken pursuant to discretionary functions. “28

    39 Because Groten alleged acts to which qualified immunity may not apply, we must reverse the dismissal of his complaint pursuant to Rule 12(b)(6) on qualified immunity grounds.

    https://www.courtlistener.com/opinion/773460/stuart

    UNREASONABLE: 

    not reasonable or rational; acting at variance with or contrary to reason; not guided by reason or sound judgment; irrational:

    an unreasonable person: not in accordance with practical realities, as attitude or behavior; inappropriate: His Bohemianism was an unreasonable way of life for one so rich.

    excessive, immoderate, or exorbitant; unconscionable: https://www.dictionary.com/browse/unreasonable 

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  13. AI, MAI, APPRAISAL INSTITUTE, GARY CRABTREE SRA, CREATE NON-AFFILIATED APPRAISER HIT SQUAD!

    Bakersfields’s Gary Crabtree Honored as Appraisal Institute’s ‘Volunteer of Distinction’

    “CHICAGO (Feb. 5, 2014) – Gary T. Crabtree, SRA, of Bakersfield, Calif., was recognized today as the Appraisal Institute’s February “Volunteer of Distinction” for Region VII.”

    “Gary Crabtree is an exceptional ambassador for the Appraisal Institute,” said Appraisal Institute President Ken P. Wilson, MAI, SRA. “We’re proud to be represented by individuals like Gary, who faithfully serve our organization and the real estate valuation profession, as well as their local communities.”

    “He has worked directly with state regulators, the local district attorney and the FBI in documenting mortgage fraud and given presentations on the subject at the national level.”

    https://www.appraisalinstitute.org/assets/1/7/febvodcrabtree.pdf

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  14. Ann McGovern on Facebook Ann McGovern on Facebook says:

    70% I would think it would be higher… that means 30% of the complaining public actuals understands the appraisal process enough to launch a legitimate complaint WOW

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  15. Katelyn says:

    “When you run the number of complaints in one year against the number of appraisers, one can expect a complaint every eight to ten years.”

    I thought this article was interesting.

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    • Baggins Baggins says:

      And that’s why I comp search everything prior to accepting and won’t even take orders where I know I’ll have to set the record straight or correct the number. The system is designed against independence of appraisers. AIR is a paper tiger and separation from loan production rules prohibit us from making effective arguments to help qualified brokers provide best representation for their clients. I have a hundred stories where I know the amc or order management clerks feel it’s their job to insulate the lender from any instance of appraiser objection to closing deals as structured by agents.

      How can a non appraiser effectively manage an appraisal panel and subsequent distribution? They can’t.

      Every single ‘panel manager’ whom does not hold an appraisers license should be fired immediately and replaced with someone who does. There should be a rule…

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    • Mike Ford Mike Ford says:

      Its a good article. Personally I like Mr. Whitmers Reviewing article even more, but his recommendations in this one were also on the mark.

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AGA

Frivolous Complaints Against Appraisers

by Michael Ford time to read: 2 min
72