Software Provider Conflict of Interest(s)?

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

First American Financial and ACI software

ACI software & “restricted appraisals” that suffer from schizophrenia…

It’s been awhile since I reviewed or researched influences affecting products offered by appraisal software providers. It’s hardly been a number one priority lately. However, I just noticed something I’ve missed for I can’t even begin to guess at how long.

Like many appraisers, I use a variety of software providers. Some do some things better than others, or easier. It’s usually been a matter of preference.

I started out back in the 1980’s with Formfil PC+, back on my old DOS based system. It was a decent appraisal software. Pretty basic, but fully functional and I wrote most reports up in half a day start to finish.

In the 1990’s, I was introduced to Richard Heyn’s ACI software, initially DOS, but then windows. It was then I started noticing forms being created that clearly were not intended for USPAP assignments. And I started reviewing forms much closer to make sure OUR products were meeting standards. I also noted a growing tendency among clients to think that the mere existence of a form meant that it was OK to use for whatever they wanted it used for.

Around 1993 or ’94 I was introduced to WinTotal (or Alamode). I’m not sure how it was commonly known back then. Despite the learning curve, I fell in love with it. Around this time, addendum WP software was also settling down to MS Office (Works and Word), with Ami Pro and WordPerfect, WordStar and others falling by the wayside (for appraisers anyway). The burden of trying to remain proficient in ALL new software and operating systems was becoming like a second job in itself.

Move to the 2000’s and my business partner and I reverted back to ACI, primarily. By now appraisal software providers thought they also had to be the word processor of choice as well as forms and addendum of choice. LENDERS discovered that they could have “special” products created that were MUCH SHORTER than standard required forms. And that they could often get these “filled out” cheaper. Providers told me that (1) “The market” was demanding these new forms, and (2) Income from appraisers only is not enough to keep the doors open and pay the costs of constantly new software. They had to cater to ‘other interests’ that used “appraisals” or forms that they wanted appraisers to ‘fill out’. For years, I just gritted my teeth and accepted my obligation to assure that MY report was compliant regardless of how shortened the form had become (or how long, in recent years).

After reading an article by Mr. Heyn in WorkingRE, a paid advertisement type article in which WRE does not provide a comment function, I checked the links in Mr. Heyn’s article. You see, I thought it was a very good article on an extremely important topic. I wanted to elaborate and offer additional support for the view being expressed but other than Twitter there was place to do so. I started clicking on the links until I wound up at the ACI site or one of it’s pages. Imagine my SHOCK on seeing my old respected software provider has been bought out by the very same mega-corp offering a NON USPAP compliant form which set off my complaint to the FFIEC and CFPB via ASC only a few days ago!

Yet, one more time in my life I see the amoral tentacles of another giant (former) title insurer that have reached into escrow services, loan origination, loan servicing, appraisal management, “and of course “valuation reconciliation”. And now even the ownership of the basic forms we appraisers use to complete our most common products!

The Appraisal Foundation gave them some nice public compliments in Las Vegas last week about a new service feature they are offering soon. I have to wonder if they were aware of THIS product when they did so?

Click Forms is starting to look better and better to me. Maybe I’ll keep my old WinTotal (Aurora). Maybe I’ll force myself to use my despised new TOTAL and try to get comfortable with Bradford, and renew Narrative1. It will be very hard to justify using my ACI suite anymore, knowing any money I spend there supports a conglomerate that thinks it’s okay to pay appraisers $70.00 fees for “restricted appraisals” that suffer from schizophrenia.

Image credit flickr - FirstAmerican
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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13 Responses

  1. bill johnson says:

    The software providers are in bed with the lenders and the AMC’s. Why do these big companies require their own independent delivery portals be built into the software? Their hope is to be bought out (Mercury Network, FNC, Inc., etc.,) for multimillion dollar paydays. The worst example I’ve seen though is that Wells Fargo (RELS) has there own designed desk review form that they developed and that is filled out on line via their own system.

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    • Mike Ford Mike Ford says:

      Note: WF has since sold Rels.

      I wonder if those vendor specific ‘reviews’ are what they use to force appraisers to push values; or turn them in to state agencies when they refuse?

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      • Mike Ford Mike Ford says:

        PS-if it is NOT USPAP compliant, turn the signing appraisers in to the state boards where they are located as well as the state boards where the work is performed. Some states (lie Nevada) REQUIRE that the desk reviewers be licensed in that state too. Otherwise they consider it appraisal practice without a license.

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  2. Diana N says:

    What ever happened to Day 1 ? For years I have been using software provided by a very small company called HomePuter. They have no agenda, are not connected to any AMC, provide good personal support if needed and their forms meet all requirements. I also have ACI which I was using for my commercial work which didn’t require a narrative and have had all sorts of problems, especially the mapping, which I pay for and still isn’t working. In a few years non of us will need forms because the machines will do it all.

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  3. KenQ says:

    ACI acquired both Day One and United Systems back in 2008 I believe. I too started out with Day One back in the days, the DOS version. Windows version had a lot of issues so I switched to Athena/alamode.

    So now we find out First American owns ACI. Yup… the title and the article says it all. Thanks for the info

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  4. Koma says:

    Thanks for the info Mike. I just ignore these alternative appraisals altogether. AMC’s keep contacting me and I say no thanks. Got that mess from First American also. Noticed right from the get go it was junk and could get me in trouble.

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  5. Mike Ford Mike Ford says:

    Can’t y’all just FEEL the ‘love’ from these folks?

    P.S. We Love You

    Koma: Respectfully too many of us are just ignoring them. The specific one in question is without a doubt misleading and its use as well as advertisement appears to violate appraisal laws in (at least) my state. We need to start calling lenders/AMCs/AMPs ‘out’ whenever they promote these dishonest services.

    IF only 100 appraisers wrote to CFPB or ASC on this one service, do you think it would exist a week from now?

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  6. It is interesting that in a time when appraisers find it extremely difficult to make enough money, working full time, to feed their families, large real estate conglomerates like FNC are out their gobbling up appraisal software companies (ACI) and large AMCs (Landsafe and Rels) and ore peripheral appraisal services (Appriasalport). If you are wondering where the professional fees that you used to earn in this business went, look no further.

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  7. Baggins Baggins says:

    You’ll love this email; We have a client that will be ordering a new review product we are offering. The pay is $25 per report with a 24-48 hour turn time. This is a desktop review product (not on the desk review form, but meaning no field work) and on average, we are finding that appraisers can complete 3-5 per hour. You will need to complete via a website. Training will be provided.

    Please let us know if you are interested. We believe there is a great deal of volume we can earn over time.
    /////////////

    No thanks. Nothing, and I mean absolutely nothing, moves across my desk for less than $150. Desktops are 250 minimum. Drive by’s are 325 minimum. Full appraisals are 450 minimum. These ‘new products’ are merely workarounds regarding the rules they can’t use bpo’s in leu of appraisal products. And I keep on responding with the same tired old line; When an appraiser provides a valuation opinion, even if it’s merely the act of selecting comps, the normal standards rules apply. Regardless of how beneficial these products are to lenders, their implementation is at odds with existing appraiser ethics, appraisal developmental guidelines, and record keeping guidelines. To put it plainly; adoption of such a product is against my best interest as an appraiser. I will not accelerate my own demise by completing these kinds of work products. If they want a bpo, they should hire a realty person. If they want an appraisal, they’ll need to pony up. Behind the scenes, the adoption of these new tools are merely a way to redirect business expense write offs away from paying appraisers, and towards new technology which works in favor of the lender and distributor. Good for them, bad for appraisers. If appraisers are eager to put themselves out of business, I’m sure they’re actively completing these products. In just the past 6 months, I’ve seen several asset managers and other similar outfits whom seek internal valuation use services, try and adopt these products. If FNMA does not offer the form, I will not complete it, if there is even a remote chance that form will be tied, or will be used in relationship to a loan package backed by a gse loan. To put it simply; unless you are a credit union asking for a quickie product for your in house loan, it’s short sighted practice to ask for something other than FNMA forms from appraisers.

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  8. Mike Ford, CA AG, AGA, GAA, RAA Mike Ford, CA AG, AGA, GAA, RAA says:

    Baggins, agree 100%.

    By the way, this is one more reason for INSISTING on copies of any “reviews” claimed by a client or AMC. I do NOT respond favorably if or when a client says “UW or ‘reviewer’ want explanation for such and such. I want to SEE the UW source communication or purported review. Changing a report based on email communications originated by unknown parties without seeing the documents referenced is an invitation to get a state complaint.

    My only response if such a ‘review’ were ever presented to me is: What are the appraisers qualifications to be performing this review, and why doesn’t it meet the MINIMUM review appraisal standards adopted for federally regulated transactions? My next step would be to send it to both MY state regulators, and the state regulators in whatever state the ‘review’ was performed in.

    We need to put a STOP to the use of all the exceptions to “appraisals”. TAF should be involved in this as well in my opinion. They are charged with maintaining the nations trust in appraisal and the appraisal process.

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    • Son of Baggins Son of Baggins says:

      If I turned in every irrelevant and illogical ‘revision request’ which underwriters blindly regurgitate from XML warning points, and would never have been issued by human appraisers, I’d have to turn in the majority of mortgage lending clients I work with. AIR and XML together is like a frog in water which is just about to boil. Best thing for underwriters though, because they can literally operate asleep at the wheel, and they don’t even have to read the reports they review anymore. / Mix that up with the quickie products and avm, and lenders and amcs have created the perfect system to waste more human effort on irrelevant actions then ever before seen in this industry. The only reason they want appraisers to do the avm like quickie is because they’re officially disallowed from using the bpo or avm already. What the appraisal industry needs is an ethical accountability board, which has broad powers to deal harsh penalties to anyone whom has official dealings with state licensed appraisers, pertaining to loans sourced through either state or federally licensed lending or holding companies. To date, the appraisal industry ethical positions remain largely unrecognized, because there is no authority within this and related industries, which takes ethical violations against proper valuation process seriously. If the state ever made an outbound phone call to set a lender or order distributor straight, I’d be mighty surprised.

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      • Mike Ford Mike Ford says:

        IF there were a national ethical accountability board and no one turned anyone in because it would take too much of their time, what good would it do?

        The Federal CFPB IS that accountability ‘board’. They took a long time to get up and running but the Executive Director of the Appraisal Sub Committee says they ARE taking complaints and acting on them now…finally. He admitted that often we (appraisers) don’t know whether we are supposed to turn one into the FFIEC OR the CFPB. IN Nevada, at the TAF/APB Public Meeting he said we can forward the complaints to him if we are unsure where to send them and while he doesn’t;t deal with them directly, he’d make sure they get to the right parties.

        Send to Jim Park Jim@asc.gov  IF you are an AGA member and send a complaint to them, please send a copy to us as well and we will try to follow up on it if they fail to acknowledge receipt of it.

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