Georgia Fines Clear Value Hybrid Appraiser
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So, do you think it’s ok to do bifurcated hybrids?
The properties were in Georgia. The appraisals were performed on a desktop basis by an appraiser in Indiana. Total fee was $250. Out of that $250, AMC Fee was $225, and the Indiana desktop appraiser was paid $25.00. Keep that fee in mind as you read through the attachments.
Two complaints were filed by AGA™. One with the State of Indiana, and one with the State of Georgia. We believe bifurcated hybrids as typically promoted and practiced are inappropriate and should not be permitted to be referred to as appraisals. As promoted, & as a practical matter USPAP compliance despite claims to the contrary is not feasible except as a hypothetical or philosophical argument. These were prime examples.
Indiana responded first. After several calls with their Assistant State Attorney General she determined they lacked the legislative authority in this specific case to do anything. They were clearly interested and concerned about the issues raised, but the specifics of these cases were outside their authority. We should not read anything into their inability to act officially in this specific instance.
The Georgia complaint took a little longer to make and to hear back on (they don’t accept online complaints). A few months ago, we were contacted by one of their investigators for follow up inquiries. He was very thorough and impartial. He had done considerable ‘homework’ prior to contacting us. He was very much aware of the (potential) issues at hand. We were highly impressed at Georgia’s Real Estate Appraisers Board efforts in this matter.
The Georgia Real Estate Appraisers Board notified us of their findings by letter dated 10/30/2019.
Twenty three (23) separate violations of Georgia Real Estate Appraiser requirements were identified by the Board. Some were significant. Some were more administrative in nature. ALL are Georgia requirements and or expectations for appraisers licensed or certified there.
A fine of $2,500 was levied. GREAB did not require proactive public posting of the charges and findings. It’s possible this was part of a negotiated settlement or they may simply have felt the educational / deterrent aspects of the findings were adequately addressed by the fine. I’m redacting the appraisers name here for the same reasons, though I’ve previously listed it. It’s no great effort to find it out, but the name really isn’t important. It is the collective findings of the Board that are important.
The fine levied was 100 times greater than the fee received by the appraiser. In addition to violation of USPAP, several Georgia specific state violations were reported. Those who still consider doing bifurcated hybrids should keep the competency requirements of USPAP in mind.
Anyone doing them is not only undermining their profession, they are risking their license. Anyone doing them in a state where they do not routinely practice is a damn fool.
Due to all the phony hype about quality and accuracy and being done by ‘trained inspectors’ it’s going to take a while to demonstrate to state regulators how egregiously bad these ‘products’ are. ALL of them. Including 1004P.
Some states are still swayed by the sophist arguments that it is the appraiser rather than the format that determines USPAP compliance. While theoretically true, when the form and format is so restrictive and dependent on unreasonable assumptions that compliance is impossible outside of a philosophical discussion then it is the fundamental product that is deficient.
ALL hybrid reports invariably state nothing prevents the appraiser from adding such additional information as they deem necessary. It’s their promoter’s way of passing the buck back to the appraiser. Even though the online formats often limit the number of alternative comparable sales. Or, they prohibit adding the number of addenda required to explain and adequately support conclusions.
Most importantly they do not allow a reasonable fee (as required under Dodd Frank), or sufficient time to properly investigate, analyze, develop and report credible appraisal results. The systems are set up to provide appraisers with ‘suggested’ pre-selected comparable sales, and even adjustments in some cases.
The only way they ‘pencil out’ is for the appraiser to use the provided default data; to assume highest and best use conclusions, and zoning; and not waste ANY time verifying data such as development standards or code compliance. In short, act as a rubber stamp typist with appraiser credentials.
Georgia took the first step. The remaining 49 states and District of Colombia now need to go on record affirming that they will not turn a blind eye to products that are designed to be deficient, value affirming rubber stamp processes.
Any appraiser that has a copy of a bifurcated hybrid they want forwarded to their state board may send it to me or to AGA™. Member, or not. Email firstname.lastname@example.org; email@example.com or firstname.lastname@example.org.
We strongly urge AGA™ Members (& anyone else) not to perform these types of assignments unless the inspector is your own licensed trainee and you are given a fee sufficient to compensate you for the four to twelve hours normally required for a USPAP compliant appraisal; the client does not control your signature, and the form and format cannot be ‘rearranged’ once uploaded. Even then, the appraiser is on extremely thin ice. It is best not to do them at all.
NOTE: Similar complaints are currently pending in other states. A follow up to this complaint will shortly be filed against both the AMC and the lender involved. THEY are obligated to assure appraisals are USPAP compliant and credible before delivering them.
Clearly, they are not doing so.