You Sign It, You Buy It

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Appraiser Maureen Sweeney Makes It Clear...You Sign It, You Buy ItMaureen Sweeney, my friend and appraiser colleague from Chicago (who knew where the name “Chicago” originated from that I learned when I used to live there), wrote an opus about appraiser liability being created and the race to the bottom. It’s a great read.

Spoiler alert: Apps don’t have any judgment, nor does their maker.


There are moments in my life when I am glad to have given 12 years of my life to service to the Illinois appraisal community, and being part of the team that was in place when the Illinois AMC laws and rules were written years ago.

Each state is different with how they discipline their AMCs and how they discipline their appraisers. In Illinois the AMCs have nothing to do with the appraisal board. They are a business, and as such, they have no say in the disciplining of appraisers. They have to follow the laws that govern them as a business, which includes hiring licensed appraisers for all of their work.This brings up 4 points:

  1. The AMC is responsible for hiring licensed inspectors, which includes appraisers to do these hybrid reports.
  2. The appraiser must be knowledgeable of their state laws, including the laws that govern AMCs
  3. If the appraiser receives an assignment that is ordered by an AMC in which the inspection is not done by a licensed appraiser or a licensed building inspector, then the appraiser should not accept the assignment and contact the state, informing them that the AMC is breaking the law.
  4. If the appraiser accepts the assignment that is ordered by an AMC in which the inspection is not done by a licensed appraiser or a licensed building inspector, then they are engaging in illegal activity.

Can mom and pop appraisal shops in Illinois do these hybrid reports when ordered by anyone other than an AMC? They sure can. And like every assignment, the appraiser is 100% responsible for their product. They sign it, they buy it.

When I served on the Illinois appraisal board from 2005 – 2017, the attitude then, and currently is: our job is not to tell you how to run your business. If there are appraisers out there who wish to do 1025s for $175 and take full responsibility for such a business decision, that’s their business decision. If somebody wants to sign off and take full responsibility for doing hybrids, that’s great too. It’s their business decision. They sign it, they buy it. Yet, this comes with a whole lot of Valuation Process problems. Let’s look at the following paragraph from the Morningstar press release:

Clear Capital’s Modern Appraisal Program uses ClearInspect™ — Clear Capital’s new, intuitive mobile app — to guide appraisers, agents, brokers, and other data collectors step-by-step through a property data collection process to ensure quality and efficiency. The results can easily be delivered to customers, government sponsored enterprises (GSEs), and appraisers who may perform a desktop valuation based upon the collected property data.

Who’s driving the Scope of Work? Who’s driving the data collection? It sounds like the intuitive mobile app is. Now I ask the question: who is driving the decision making process with this app? Is it the appraiser? It doesn’t sound like it. It sounds more like it’s Clear Capital’s new, intuitive mobile app!

And with that, my head just exploded.

When the hybrid and bifurcated reports were first introduced, I spoke with an attorney who does a whole lot of work defending appraisers. Right now, there aren’t that many cases against appraisers in Illinois and nationwide, yet the E&O companies and law firms that are hired by the E&O companies to defend appraisers, as well as the law firms who defend lenders who suffered a loss due to the hybrid appraisers are waiting. As one who specializes in forensic appraising of real property, along with a bunch of other “stuff”, I too will wait. There are a whole lot of licensed appraisers who are racing to the bottom to get some quick and easy money, and all of us know that this business practice typically results in stupid mistakes that have real consequences. For those of us who do expert testimony, we are going to be hammered with work due to the business decisions of others.

And I wish I didn’t have this gut feeling that a year from now, I will be receiving calls to litigation support regarding hybrid and bifurcated appraisal reports, but I do.

[see updated meeting info below] For those who will be in the Arlington, VA area next Friday, June 7th, hopefully you can make the joint TAFAC and IAC meeting. Peter Christensen will be there: http://appraisersblogs.com/hybrid-appraisals-liability-risks

All of us have been in this business way too long, and all of us have lived through the public making uninformed decisions. All of us have screamed for consumers to inform themselves. And all of us have witnessed time after time consumers ignoring the cries of those who witnessed the decisions made by others before them. We can’t save the consumer from themselves, and we can’t save the appraiser from themselves. And yet, like Sisyphus, we will continue to try.

[From The Appraisal Foundation: Next Friday, June 7, we will be in Park City for the Spring Board of Trustees meeting.

Our 2019 Joint TAFAC/IAC Meeting is Thursday, June 27:

It’s the 30th anniversary of FIRREA and this year’s speakers include Peter Barash and Bill Black giving a historical perspective of the S&L Crisis and Congressional responses and the agencies’ activities since that have diluted it, and also a look forward with Josh Panknin from Columbia Univ & NYU, author of The Property Valuation Reckoning is Imminent, How Technology is Highlighting Underwriting’s Shortcomings. And more.]

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

Latest posts by Jonathan Miller (see all)

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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19 Responses

  1. Avatar Michael Curtis, SRA, AI-RRS says:

    This is the low point of our profession. Clear Capital is the lowest of the low. They stay in business and thrive on attracting bottom feeders to complete this garbage, while they rake in obscene profits off the appraiser’s work. The appraiser is doing most of the work and taking all the risk. All the AMC wants is their signature and license #. They want the appraiser to come up with whatever value they think will make the client happy and pressure the appraiser into doing this through their silly and stupid “clarifications” by their $20 per hour clerks. It is so true: “When you sign it you own it”. This is the beginning of the downfall of our profession.

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  2. Kathy Morton Bunting Hoey on Facebook Kathy Morton Bunting Hoey on Facebook says:

    We may not make the rules, but we can all make decisions about what we will do and not do when our licenses are on the line. The AMC’s have nothing to lose by requesting hybrid reports, because the liability is all on the Appraiser. Make wise choices is all we can do.

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  3. David Samnick on Facebook David Samnick on Facebook says:

    One could just say no thanks. Collectively, we could all just say no. Take a stand for the profession.

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  4. If I wasn’t so afraid of Divine Lightning Bolts, I’d say Maureen walks on water without getting her feet wet. She is truly one of my heroes (heroines for those of us that have not yet learned ‘PC’). So many valid points.

    Probably race to the bottom is the most significant to me. MISMO has already put its stated goal of eliminating ALL appraisals into writing. They succeeded in creating and enforcing UCDP (you know, the upload service WE pay for). By the way, they also intend to eliminate hybrids at a later data as well!

    WHY kill off your own profession? WHY defer to those that claim our skills aren’t all that good (or necessary) to begin with? I do NOT accept the lie that “Artifical Intelligence” exists. What exists, is the ability of human programmed software to achieve the incorrect answers much faster than anything else. Because these programs are so limited and have largely been proven egregiously deficient-their very existence depends on degrading the credibility and reliance on professional human appraisals.

    Many thanks to Jonathon for sharing Maureen’s article.

    For those that were unaware- ClearVal+ClearInspect still = ClearCrap.
    http://appraisersblogs.com/clearval-value-hybrid-appraisal

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    • Avatar Anonymous Veteran Appraiser says:

      Fannie Mae needs a massive class action lawsuit for regulating the profession into the ground only to then use our data as a weapon against us in these programs built. Fannie Mae CEO Timothy Mayopoulous “WE ARE NOT INTERESTED IN ELIMINATING APPRAISALS, BUT WE SHOULD BE EXPLORING OPTIONS ELECTRONICALLY”, HE ASLO SAID “APPRAISERS SHOULD BE AT THEIR DESKS”

      LET ME RESTATE THIS THE CEO OF FANNIE MAE SAID
      “APPRAISERS SHOULD BE AT THEIR DESKS”, THINK ABOUT THAT AND ALL THEIR DAM GSE REGS. SO HOW THE HELL CAN WE BE BOTH AT OUR DESKS AND LIVING UP TO YOUR DAM REGULATIONS AND REQUIREMENTS INCLUDING VIEWING THE SUBJECT AND COMPS YOU DUMB ASS IDIOT. Sorry folks just sick of this academic mentality of the appraisers being the tail of the dog in reactionary mode here.

      So there you have the very entity or GSE that boxed us in to admit and key on his words oh we don’t want to eliminate appraisals… Why would he say that or have the need to. BECAUSE THEY ARE GOING TO REDUCE AND EVENTUALLY ELIMINATE THEIR OWN MODEL IMPOSED ON US.

      They took your market knowledge and they built an system to use Electronically against you. You’ve invested time, energy money into this and liability for what to be TOLD LATER AN ELECTRONIC SYSTEM is now better.

      SIT DOWN AND SHUT UP and like it – Love and Respect Fannie Mae and Freddie Mac.

      So here we are stuck behind GSE rigid certifications and requirements to sign off on, and USPAP as well and finally Client SLA’s and a hybrid HAS NONE, your in a race against a hybrid (alternative valuations bypassing appraisers or AVBA’s) with no restrictions.

      You must compete against it’s turn times and you must write a narrative to explain why your value is different than theirs. You must reconcile.

      The only reconciliation needed is for appraisers to take back what was stolen from them. Your market experience, your data and your time and energy. From that we all retire and let them have their dam system and move on. Bye bye.

      What we have today is SMOMBIES.
      Smart Phone Zombies THROUGHOUT SOCIETY with IDEA’S vs. feet on the street.

      More data does not mirror the market and it does not mean a better value it means more ideology to dig through under the mindset of OH THIS IS BETTER when in fact what did the buyers really do. Did those buyers look at 100 homes, did this or does this ideology actually conform to the MARKET VALUE DEFINITION and is Fannie Mae going to rewrite the definition now too.

      Market Value – Willing or Unwilling Buyers and Sellers acting in any manner to assure a transaction occurs including using deep learning, artificial intelligence without viewing or seeing a property but acting purely on emotions via the cloud for clicked based sales. Buyers and Sellers will pay a internet cloud based premiums to the affiliated tech brokers for such transactions and these brokers and their related realtors are not representative of any values as marketed and advertised. Buyers and Sellers via these new technical means are assured of value checks and balances via desktop immediate appraisals and the noted Fannie Mae requirements of such appraisals as assurances to such click bait sales.

      Yea I’m a bit emotional but frankly it’s about of control.
      What is and has been the point to all this education, experience and training after all these years only to be undermined by the GSE’s the appraisal software firms and alike.

      Appraisers are better suited to drop their certs and licenses form a new national collation and orphan USPAP and the GSE and provide internet based blue book click values (similar to KBB and Edmunds and just Link it up to the dam listings we create our own regulations and KEEP IS SIMPLE – ( KISS my you know what) to the public vs being under the thumbs of those crushing us. We are essentially already doing this behind the GSE’s and SLAS and hybrids so why not orphan the dam cert and license and start an entire new profession. Give them what they want NO APPRAISERS TO BE FOUND.

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      • Baggins Baggins says:

        What’s going on with home lending makes the Sallie Mae thing seem like childs play. These middle management and tech companies with their singular limited scope profit based focus, they don’t understand the gravity of what’s at stake. Most appraisers don’t either, with their check to check lifestyles and lack of understanding of the value of their own products. “Blue Book Appraisal Services”. Genius. Where did the number come from Mr Appraiser? Avm’s, of course. See how I transferred data, put my company brand on the report, and signed it with my own name? That’s value added service!

        https://www.studentdebtrelief.us/uncategorized/sallie-mae-student-loans-the-heart-of-the-crisis/

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      • Being “at his desk” too long has apparently cut off oxygen to Timothy Mayopoulus’ brain.

        What specific qualifications does he have in understanding what an appraisal is; USPAP or even generally accepted SOUND appraisal practices? Seriously.

        Once FNMA designed and adopted CU without competent professional appraiser input they forfeited any claim to appraiser expertise at all.

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  5. Avatar Advocate says:

    More of these products are surfacing and are being placed in front of the State Boards for disciplinary actions. It is going to be interesting to see how many of our “peers” are gone this time next year because of these products.

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  6. Avatar CJK says:

    I would think that the State Boards would love to regulate these $15 home inspectors, it will just add more money to the Board coffers. The same people who are saying everything is fine don’t worry, are the same people who will drop the hammer when it all falls apart. FNMA is just adding another layer of BS. In Colorado the real home inspectors are not licensed, what will the State do with these $15 inspectors? I can see it now the listing Broker or lender will tell the home owner that someone who is not licensed, nor insured will be coming to take photos of the interior of the house. They do not know who this person is nor can they check up on him/her (but they my have worked at 7/11 last week). WHAT!

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    • Avatar Advocate says:

      Oh CJK, these property inspectors are doing more than just taking a few photos. They are giving an opinion of the condition, quality and functional utility of the property. Some are even stating highest and best use. The scope creep has already started with these inspectors.

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    • Baggins Baggins says:

      They’ll get around that direct disclosure by using the showing service scheduling. Agents whom actually want the appraiser to use showing services are doing it wrong. The agent should set limitations to the showing service and instead insist the appraiser and inspectors contact them directly. They should cut off access when in uc stats, and if the showing service allows it, only allow access for buyer showings and nothing else. It’s doubtful the showing service people are remotely ready to retool or help agents with these challenges. The super duper agents of the world are not ready for this either, having outsourced everything to do with their own listings as possible. The hybrid inspector and the flat rate listing services will however get along very well.

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  7. Avatar Wayne Courtney says:

    Nothing New here…I could make the same comment over and over and I have. There is not one single AMC that could be in this business without an appraiser taking an assignment from them and doing the work. It does not matter what the fee, does not matter when you get paid or any of that. The GOSPEL is that those sons-of-bitches could not exist without you dudes working for them. When you get your belly full and stop that shit…they will go away!

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  8. Avatar Eric Kennedy says:

    So, what seems to drive the need for these “products”. The claim is a shortage of Appraisers and the need for speed. We do have a shortage.. of Appraisers TIME and RESOURCES. Back in 2007 they were raising the education requirements because we had too many Appraisers. Now, they’ve destroyed the business model of the Appraiser to the extent we cannot supply the service they desire. I for many always kept a staff person or trainee before HVCC – now I can’t dare. Get rid of the AMC. Roll back the Scope Creeps BS. Stop stealing my resources and time and the true Appraiser will provide you the speed and service you desire – all cheaper and faster than what you are currently getting. And here is the kicker – you will be provided CREDIBLE results.. not a tri-furcated piece of junk not worth the PDF it is printed on. But that’s just my opinion, I could be wrong.

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    • Baggins Baggins says:

      Tri furicated. That’s funny and has been going around. A while back an appraiser commented that the outsourcers are outsourcing to other outsourcers. Throughout multiple industries consumers are scrambling to cut out middle men and get direct from supplier products. Meanwhile the lending industry apparently for some mysterious reason thinks consumers should deal with more vendors, more uncertainty, and higher pricing as a result. Logical fault. That is not consumer protection.

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  9. Love Maureen! She has so much good information and experience, and I hope everyone who is considering doing these examines the issues thoroughly, and to their satisfaction. Let’s not be sheep.

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    • VaCAP Board VaCAP Board says:

      Thank you Rachel! We agree everyone needs to think through these products. Please feel free to comment on Virginia’s Town Hall about Hybrid Appraisals. There is a proposed guidance document that will make your head spin. Out of state comments are welcome.
      https://townhall.virginia.gov/L/comments.cfm?GDocForumID=53

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      • Baggins Baggins says:

        Read that. In theory right? In the real world the interested parties will know they’re dealing with non licensed non accountable independent fly by night inspectors. Everyone from the amc reps to the mb’s and agents will quickly learn how to game these people. Everything will come in at c3 or better and they will readily adopt the instructions to overlook defects in the interests of ‘helping’ the home owner attain financially life saving loans. Something like that. Nothing new under the sun here. I believe in this regard pertaining to hybrids and inspections, the accountability of licensing is perhaps the most important issue to focus on. These unlicensed people are already doing these jobs. Find some of them, pay them for a factual interview, and watch how many of them respond back that yes they have been operating in a results based contingency engagement already.

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You Sign It, You Buy It

by Jonathan Miller time to read: 4 min