Frivolous Complaints Against Appraisers
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TALCB noted that roughly 70% of all complaints against appraisers are unfounded…
The American Guild of Appraiser recently wrote to Texas Sunset Commission expressing member concerns and suggested solutions. We urge readers to copy, paste, edit and send their own comments – even out of state appraisers. Click here to send your comments.
Posted AGA comments and concerns
- Appraiser complaints are allowed to be filed against appraiser by third parties that are not the clients. The appraiser has no recourse to these for recouping costs of defense.
- Third party complaints by non clients (agents; brokers, buyers, sellers) serve only to defeat the intent of Dodd Frank appraisal independence requirements. The message to appraisers is clear: “Do as we wish or we will file costly complaints against you.” It’s routine policy for CoreLogic-Wells Fargo.
- A vague and ambiguously worded complaint alleging non compliance with USPAP can force and appraiser to spend tens of thousands of dollars in defense. In BEST CASE scenarios, they must face the gut wrenching impact of false complaints hanging over their heads that can potentially end their careers.
- ALL Texas appraisal investigations and reports should comply with USPAP as well as Texas Law. The measure of compliance with USPAP is what one’s peers would do in similar circumstance — not whether an ardent prosecutorial ‘attack’ may successfully allege against an under represented appraiser. Few attorneys in the country specialize in USPAP cases as handled via Administrative Law Courts.
- TALCB must investigate all complaints. This is unnecessarily costly with (per TALCB) 70% being unfounded.
- Pre screen and dismiss out of hand all value related complaints alleging unspecified USPAP violations from non clients. Do so prior to even asking for a work file which is when the appraisers burden and angst starts. Simply notify them that a complaint has been received and verification of whether the complainant is the client or not is requested (proof being limited to a copy of the report showing who the client is).
- ONLY when pre screening of a non client complaint shows substantive evidence of probable non compliance with USPAP should a work file be requested; and a formal in depth investigation be undertaken.
- Currently Texas Law prohibits real estate agents from being fined for frivolous complaints by TALCB. This should be changed so that ALL unfounded (frivolous) complaints result in a separate complaint against the originating agent being filed by TALCB with TREC.
- Licensed Brokers and Agents in particular must be held accountable for their retaliatory, & often defamatory actions. They should not be permitted to use State Enforcement Agencies to intimidate appraisers into violating their legally mandated independence without significant penalty.
- Texas Law should be modified so that any such non specific, generalized alleged USPAP complaints filed by agents, brokers OR their clients at the agents urging subject the agents or broker involved to direct liability for recovery of all investigation costs by TALCB as well as all costs of defense expended by the appraiser whenever there is no substantive violation of USPAP found. It is only by imposing severe penalties on complainants that file frivolous complaints that the abusive practices by 3rd parties can be ended.
- TALCB in a recent webinar noted that roughly 70% of all complaints are unfounded. When 7 out of 10 complaints are unfounded, then 7 out of 10 appraisers scrutinized have been subjected to unnecessary stress and defense costs with no meaningful recourse.
- NAR and others are reported to be encouraging third party complaints as a common tool in dealing with what they perceive to be ‘low appraisals’. This undermines the public trust.
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.
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.
Makes you sort of long for the good old days when all the mortgage manager would say is we demand comp searches on everything and only assign to appraisers whom comp everything highest and best regardless of the scenario. Rather than defrauding consumers on the front end they’re just discrediting appraisers and appraisals to push everything through further down the line. Lenders will be lenders, cherry picking their vendors, what’s new?
Anyone miss the IVPI proposal yet? There are solutions, but who will pay to lobby for truly honest process?
Rick that broker should have a complaint filed against him or her with TREC for both an ethics violation and conspiring to promote Dodd Frank violations.
Rick we are dealing with a broker in DFW that appears to be doing the same thing. Did the name of the one you had rhyme with KELLER WILLIAMS? email@example.com if you want response kept private.
A Keller Williams DFW area complaint is what triggered this article. The SUPERVISING BROKER has 623 agents whose actions she is obligated by law to oversee. Her response? To accuse AGA of bullying when we urged TALCB to file against her, her firm and the individual agents through TREC.
She promised to have her broker “withdraw” the complaint from TALCB (which can’t be done anymore than a bullet fired from a gun can be recalled). Aside from that she lied anyway. Our member checked with TALCB and no such letter was ever sent.
We WILL be filing separate complaints against the brokerage. BTW look into the name – shell that Keller Williams brokers use in DFW and other areas. Talk about deception! So many “cut outs” a consumer has no clue as to who they are actually dealing with.
When will agents learn that price per square foot is not a reliable method of determining value?
For residential properties, in Cali where land value is 70-80% of value, it would make more sense to value the land then adjust for improvements.
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.
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?
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.
AI, MAI, APPRAISAL INSTITUTE, GARY CRABTREE SRA, CREATE NON-AFFILIATED
APPRAISER HIT SQUAD!
Let’s focus on the issues at hand and not simply the frivolous grammatical issues. This is a blog for peer communication among appraisal professionals not a deposition.
Mr. Ford has his own successful appraisal business and dedicates his personal time as an advocate for the profession. What have you done to further the profession?
ARE YOU REFERRING TO ME? YOU GOTTA BE KIDDING.
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.
Do you get paid?
No. It’s 100% purely voluntary. Fees have been offered by some…and always declined for members.
Excellent suggestions Mike. Maybe AGA can get involved in getting this happen in all states?
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.
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”.
I have that comment in all my appraisers under intended user as well
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
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.
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.
Don we just received a request from a well known law firm for names, dates details about WF abuses or their AMCs. We are currently asking our members individually for permission to share this type info with them. Member or not, if you email me I’ll quietly forward your cases to them too.
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.
Good call Randy!
Randy, what can we do to correct that in Michigan? We are willing to try. email to firstname.lastname@example.org
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.
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!
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?
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
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.
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.
1. There is no uniform state to state requirement for real estate appraiser regulatory boards OR their investigators to be competent appraisers themselves.
2. TAF appears to be teaching Regulator Investigator Level I, II and III courses from federal grants, down in Texas. It appears they are teaching prosecutorial sophistry at least as much (if not more) than true USPAP Compliance by investigators. We can’t prove it because TAF won’t let anyone else take the courses unless their state authorizes it. In short, it’s deliberately kept secret.
3. AARO seems to reinforce regulator abuses and non compliance with uspap rather than promoting it. Double standard at work here.
ASC “isn’t sure” that licensed reviewers complying with uspap are required. Jim Park and I exchanged views on this by phone when I suggested state enforcement needs to be replaced by uniform federal enforcement since uspap and FIRREA are federal dictates…though uspap is whimsically written and revised by a private corporation.
5. USPAP non compliance by investigators and regulators undermines public trust!
NOT DESIGNATED FOR PUBLICATION
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
KANSAS REAL ESTATE APPRAISAL BOARD,
Following the 6-month timeframe provided for in the MCAO, two randomly selected appraisals were reviewed by John Schmidt (an expert to which both parties stipulated) at the direction of the Board and in accordance with the MCAO. These appraisals included a restricted use report (9th Street report) and a summary report (56 Highway report). Both were found by Schmidt to violate numerous USPAP standards and rules. The 9th Street report was found substantially noncompliant with the USPAP Record Keeping Rule and Standards Rules 1-1, 1-2, 1-4(b), and 2-2(c)(viii); and the 56 Highway report was found substantially noncompliant with the USPAP Standards Rules 1-1, 1-2, 1-4(b), 1-4(c), 2-1, and 2-2(b). While Webb’s appraisals were initially suspected of being noncompliant with the Competency Rule for failing to include a signed certification similar in content to that at USPAP Standards Rule 2-3, this failure was later
Commercial appraiser – I have no idea whether the California BREA investigator J. S. is the same one being referred to by you or your partially cited articles.
I suspect not, since JS in California doesn’t know the difference between USPAP and Fannie Mae Guidelines based on his actual court testimony. Hard to believe anyone would voluntarily stipulate to his being an expert at anything.
I ASSUME IT IS, YOU CAN CALL HIM TO MAKE A POSITIVE IDENTIFICATION.
I have no interest one way or the other. The question arose because a post on your site was unclear. While I have no love for BREA, I have enough other real issues on my plate that I don’t need to go out of my way to try to antagonize them. I don’t mind doing so if it is relevant to a point or conversation, but to just throw barbs their way for the sake of throwing barbs would be foolish.
Did you get my message? I called them and no one would speak to me, even the director. They transferred me to their legal department, I left a message. If they do not call back I am going to assume that they are one in the same persons.
MY CONCERN IS THAT THEY PUT IN $30,000 TO $40,000 A YEAR IN OVERTIME AND HE STILL HAS TIME TO GO TO Kansas. ALSO, THERE IS THE ISSUE OF GEOGRAPHIC LOCATION QUALIFICATION AND KEEPING THEN ON THEIR TOES. THEY WILL BE MORE VULNERABLE TO MAKING MISTAKES AND HOPEFULLY GETTING BUSTED. GOOD OLD FASHIONED TACTIC, COLOMBO STYLE. IT CALLED KEEPING THE PRESSURE ON.
DOES NOT PASS THE SMELL TEST. LOOK I DO NOT MIND COMMUNICATING WITH YOU AND THE OTHERS, BUT IF YOU FAIL TO GET IT, THAT’S ON YOU. DON’T WASTE MY TIME RESPONDING TO THESE RIDICULOUS COMMENTS. I PERSONALLY FEEL YOU AND YOUR CREW CAN’T BUST A GRAPE.
NOTHING I DO IS FOOLISH, FOOL.
Time to loosen the tinfoil hat just a little.
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.
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?
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.
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.
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?
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.
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.
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.
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.
As I said, the review prior to lender client getting it is the only good thing about an AMC. I do not condone anything else.
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.
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)
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”
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”.
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?
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.
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.
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.
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.
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.
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.
Out of sequence reply (apologies to all) – In your response to Baggins you stated “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.”
I happen to agree that the AMC review (such as they may be) are an integral part of the QC process and DO take place prior to delivery of the report to the client. Some states will disagree with you though. Specifically California that held delivery to the AMC constituted delivery to the client and any errors delivered to the client constituted potential USPAP offenses. Fortunately the ALJ disagreed with the state. The point again, is that state investigators MUST document their findings and support for conclusions just like any other appraiser does. Doing it in accordance with all aspects of USPAP is the only way that is both fair and that consistently makes sense.
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.
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.
Dan, He lost a bit of credibility when he said in posts that BING is a (paraphrased) replacement for local on the ground knowledge of a property and its neighborhood characteristics. His NOT KNOWING what an ADU stands for is further evidence he is no ones peer that appraises SFRs OR 2-4 units for FRTs.
The bias & lack of understanding of the responding appraisers position in this post is self evident. “ 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”
Respectfully Dan, his expertise is not showing through his posts. IF he can honestly say he is still doing SFR appraisals for FRT lending, then I’d reconsider my opinions about his being a ‘peer’. Has he EVER written a UAD format report for a lending client? Has he ever dealt with one as the appraiser explaining a high CU score or responding to CU inquiries? Heck, has he even written an SFR appraisal for a lender in the past decade?
Hiring an attorney is not a sign of guilt. It is merely recognition of how complex Admin Law is in most states and how one can get steam rollered without an attorney or independent eye on the regulators that choose NOT to follow USPAP while they are judging OUR compliance with it.
Yes he has and has trained several appraisers that now have their own businesses. He writes a very detailed and well documented report and yes UAD.
Hi Dan, I caught he does outside work still…and for what its worth I’m more respectful of him as an appraiser…though not as a investigative review appraiser-regulator. I READ Michigan’s statements for state reviews.
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”.
I knew investigators were warped. 😉
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.
Actually Randy I have been before the judge and we humiliated the state investigators; the former head of enforcement, her replacement and the Supervisory DAG for the L.A. area on a daily basis for five days.
We used facts AND knew the intricacies of both the forms and underlying standards that dictate the work that goes into them.
Many of us do not consider a requirement for appraisal investigators (which is merely another term for REVIEW APPRAISER) to comply with USPAP to be nonsense.
The only reason state regulators are afraid of complying with USPAP is that their ability to coerce consent agreements would disappear if they were held to the same standard as the appraisers they purport to ‘investigate’.
Lastly Randy, the perceived insult to your integrity and ability arises from your own post about Bing being some kind of acceptable alternative to having local knowledge. That and claiming to be a “peer’ but not knowing what an ADU is.
As for bully pulpits, we both have the same access to this one. If you truly believe that non compliance with USPAP in your or other states by appraiser investigators is defensible, then write a factual letter outlining why. The site administrator reads the posts here and I’m fairly confident she’d publish it. (Send original .doc or .docx formats). Their address is email@example.com.
PS I AM reassured (mildly) that you still go out and do appraisals but am further concerned that a contract review appraiser doesn’t think they need to comply with USPAP.
The only portion of your attempt to rebut or support your lack of apparent real word understanding is your comment “Hiring an attorney is not a sign of guilt.” However, the mindless dribble about not following USPAP is totally pointless and inaccurate. The investigation into a Respondent’s appraisal allegedly violating or failing to follow USPAP standards involves the assemblage of facts that support or fail to support allegations made in the complaint. How that information gets to those that make the decisions in regards to format is irrelevant. End of story!
Wow! one time before a judge and you won? Congrats. Try it a hundreds of times and you might not be batting 100%. I have and I don’t have to prove it to you.
I’m not going to get into any further commentary about your mind set as to what you feel is a proper investigation process. While wearing a different hat I have completed hundreds of appraisal reviews for lenders and utilized “The Form”. There is a different mind set when an appraiser’s livelihood is at stake. There is far more detail involved in a license complaint as the user of the facts and findings are far more elevated in knowledge than a lender’s clerk who runs an appraisal thru a computer to verify if all engagement letter “requirements” have been addressed.
Read the comment I wrote about Bing again. as you missed the point. Bing was the tool that started the viewing of areas not typically available to appraisers or investigators. No longer could a report note “no adverse market value conditions found nearby” when a Taco Bell was within 5 feet of the Subject’s garage. Appraisers took advantage of that lack of viewing ability for out of area lenders but Bing was the end. .
You are also wrong about Michigan’s LARA Investigators being “Review Appraisers” Review appraisers are concerned with market value. State investigators potentially have an appraiser’s life, family and future in their investigation results.
I will never say all complaint investigators are equal as I have no idea what education or training some may or may not have. You should NEVER lump-compare them either in your unfounded. generalities.
Each of your posts reinforces why you personally should not be allowed anywhere near an analysis of an appraiser’s work or work file in order to determine their compliance with USPAP. For instance:
“However, the mindless dribble about not following USPAP is totally pointless and inaccurate. The investigation into a Respondent’s appraisal allegedly violating or failing to follow USPAP standards involves the assemblage of facts that support or fail to support allegations made in the complaint. How that information gets to those that make the decisions in regards to format is irrelevant. End of story!”
Pure bureaucratic BS. Clearly YOU need to read USPAP itself again. Try the part where it says (1) The measure of USPAP compliance is what ones peers would do in similar circumstance; and (2) That USPAP compliance is ALWAYS reviewed in the context of the client’s intended use.
Claims, complaints and allegations can take many forms. Not one, other than alleged non compliance with USPAP is a valid concern of a state investigator. Get off your high horse Randy.
As for your hundreds of times before a judge (if intended to apply to ALJ cases) I simply do not believe you. Aside from the fact my statement had to do with one specific ALJ case – not general superior court civil litigation which is the only way you may ever have had ‘hundreds of appearances.” That in itself raises issues of whether you are merely a hired gun or nor.
You made an incredibly stupid post about prior to Bing there was a need to have on the ground, local expertise; inferring either intentionally or unintentionally that Bing was an acceptable substitute for on the ground local competency and expertise. If you don’t like the way your vague post is interpreted blame yourself – not the reader. You can take your same exact follow up example of the Taco Bell impact (from last post), and IF you were doing a proper and competent field review of the other appraiser’s work AS YOU SHOULD BE DOING, you would notice the same thing. You might even notice other considerations that a real appraiser notices in the field – that are not visible from Bing or Google.
My favorite regulator example is the guy that found fault with an appraiser because Google aerial showed two cars parked on a lawn and he assumed & concluded the appraiser carelessly missed a driveway (which was the ONLY possible real issue in that case). WE sent field reviewers out that observed a grassy & bare earthen patch that met no city code for a driveway. Before you or any regulators hang honest appraisers the bare minimum they should be able to expect is a competent field review of their work. NOTHING LESS!
[You stated] “You are also wrong about Michigan’s LARA Investigators being “Review Appraisers” Review appraisers are concerned with market value”
I suggest you reread USPAP and find out what review appraisals are actually concerned with. Let me help in case you can’t find the definitions section of USPAP
“APPRAISAL REVIEW: (noun) the act or process of developing an opinion about the quality of another appraiser’s work that was performed as part of an appraisal or appraisal review assignment; (adjective) of or pertaining to an opinion about the quality of another appraiser’s work that was performed as part of an appraisal or appraisal review assignment.
Comment: The subject of an appraisal review assignment may be all or part of a report, workfile, or a combination of these.”
Value is not even mentioned.
I repeat, you have NO BUSINESS being allowed to investigate the quality of another appraiser’s work based on your own misinformed statements in these posts. Your posts only reinforce WHY Reviewer-Investigators should be required to show their work in the form of USPAP compliant appraisal reviews.
There is NO difference between your apparent practices and beliefs than there is the appraiser that makes rote adjustments. USPAP itself is very specific about what constitutes compliance. YOUR state and or regulatory officials have chosen to reinterpret that. If you and or your state cannot comply with USPAP in the review of another appraiser’s compliance with it, then you are NOT QUALIFIED or COMPETENT to be performing that review.
USPAP are the MINIMUM standards of acceptable performance in FRTs for a reason. Is there a reason both you and apparently your state feel meeting MINIMUM standards when conducting a review of a professional’s work isn’t necessary? Aside from bureaucratic sophistry?
PS – Thank you for showing the mind set of state investigators first hand. Many readers mistakenly thought or think they are or will be getting fair treatment.
Protecting and promoting public trust? My ass.
Your blind rage is indicative of tunnel vision and a failure to accept commentary that you cannot interpret for your desires.
Your twist of my statements is mere fodder only to anyone who might not have read the entire chain of comments that lead to this commentary. You have an apparent agenda that appears contrary to mine. So be it. I care less what you think or deem the “Rule of Mike”. Try to belittle my actions, motives and ideals as being improper, outside of USPAP, I say go suck an egg. You fail to grasp what is being said and want it your way. Not going to happen Mike. You have no idea who I am, the appraisers that I associate with, my experience or training.I will no longer reply to your unsupported accusations or your failure to accept what I factually state in my retorts. As my letterhead states “Real Estate Appraisals with Integrity Since 1977”.
No rage at all Randy.
Just a complete and total unwillingness to read or ‘hear’ another ‘regulator’ speaking hypocritically …and wrong.
When you are finished rereading USPAP I suggest you also go read the Michigan state LARA website where it specifically states reviews by regulators are to be based in USPAP.
Randy, my ONLY agenda is pointing out the need for state regulators to follow USPAP. BTW it’s a need that Michigan itself affirms. You are the only one arguing that you don’t have to.
Sorry, I Lied! I must reply. I never said investigators don’t follow USPAP. I said we don’t WRITE investigation reports to Standard 3.
Don’t tell me that to review for USPAP violations that you must write to Standard 3. Don’t do it! Apples and oranges. That is the way it is in Michigan. If you don’t like….to bad, so sad.
Actually Randy, as far as I know no one ‘writes‘ to SR 3. Though competent reviewers write to SR 4 after having performed their review appraisals in accordance with SR 3.
I checked the Michigan website and understand more as to why you are so confused about following USPAP. Apparently in Michigan enforcement procedures are “based in USPAP” (whatever the hell THAT means) which is not at all the same thing as being performed in accordance with; or compliance with USPAP.
Michigan is clearly another one of those states that have a schizophrenics understanding of USPAP. Sort of like a buffet menu. Pick from whichever section is convenient at the moment.
My only question is how a former Society designated, SRPA & Institute SRA cannot or will not see the difference between following USPAP, and the enforcement compliance charade TAF and AARO put out. My original mentor was an MAI and my longest running mentor was an SRPA. I KNOW you guys know the difference between following USPAP and pretending to.
The FACT is that USPAP compliance is a difficult doctrine to enforce BECAUSE compliance is subjective. That’s one of the reasons TAF keeps hacking away at it every other year. Law does not ‘like’ subjectivity as a measure of compliance. IF states strictly followed USPAP, their consent and conviction rates would plummet as they should.
TAF claims they copyrighted USPAP in ’87 a full two years before FIRREA was adopted and TAF was authorized. If that is the case then Congress KNEW about the language describing what the measure of compliance was (and still is). USPAP is a Congressionally authorized set of standards – NOT state standards. TAF, AARO and state regulators are attempting an end run around Congressional authority and delegation.
Perhaps greater attention of Jim Park at ASC needs to be refocused on this issue; OR Congress needs to be made aware that states are not following USPAP in their enforcement of it.
When AGA writes to the state of Michigan on this we’ll redact your name as a courtesy. The objective is to get clarity and (hopefully) acknowledgement of an obligation to comply with USPAP from your state – not to cause you personally any difficulty.
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 !!!
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.
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.
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?
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.
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?
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.
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.
That’s why I don’t keep mirrors around the house. Ha!
INCOMPETENT, irrational, unconscionable, STATE (OREA/BREA) EMPLOYEE, WILLIAM DRABICK SP APPRAISER, CAN BE SUED AS AN INDIVIDUAL
… 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.
UNREASONABLE: no reasonable or rational; acting at variance with or contrary to reason; not guided by reason or sound judgement; irrational:
an unreasonable person: not in accordance with practical realities, as attitude or behavior; inappropriate: His Bohemianism was unreasonable way of life for one so rich.
excessive, immoderate, or exorbitant; unconscionable:
Good job Stu!
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.”
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
“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.
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…
Its a good article. Personally I like Mr. Whitmers Reviewing article even more, but his recommendations in this one were also on the mark.
For those Michigan ‘investigators’ that think being required to follow USPAP is ridiculous and unnecessary.
Texas investigators are required to be ASC certified USPAP instructors.
Interesting, but I’m not always that impressed by a USPAP instructors interpretations either. I’d much rather have a true peer judging my work-just like USPAP says. A true peer is going to have (generally) the same perceptions that I will have had or developed rather than TAFs spoon fed interpretation of the month.
Peers, are out in the trenches with a thorough understanding of day to day appraisal. IF the USPAP instructor is spending at least as much time doing appraisals as they do teaching, then I’d respect them as true peers too.
From TALCBs recent webinar the process is still slanted prosecutorially. They describe their investigators separately as investigators first; that happen to be appraisers. Like most states it seems they have reinterpreted USPAP to suit their own needs.
I’m curious how you reconcile your stated desire for a more national appraisal enforcement scheme with the desire to have your actions judged by “peers”? How is an out of state, “national” enforcement agency going to provide local expertise when dealing with a complaint? Sure, they could hire a local expert but then you still have the people making decisions out of state. I’m no fan of my state board’s actions but I can’t see an argument for a national alternative that solves the issues.
PS- it’s just ‘Mike” Mike. I appreciate the formal courtesy but not necessary in a blog. We can argue or fight on a first name basis.
How does having a national set of uniform rules (such as USPAP for example) preclude having actions judged by peers -THAT’S the rule now!.
Mike the problem is that we HAVE a federal law (PL-103 or FIRREA), interpreted by a private corporation to establish rules and procedures for us all which in turn are then enforced by 50 different states and 7 territories including DC with a Heinz-57 variety of implementation regulations and procedures. Many states do not have anything remotely close to peers judging our work. Just for fun those 57 states and territories have their OWN PRIVATE corporation in the form of AARO which they use as a lobbying and advocacy group to the other private corporation that makes up the rules that govern appraisers! Nicely bypassing the legislative process completely.
Between the major organizations such as AI, ASA, and the others; as well as State Coalitions and AGA we have extremely good coverage all across America and non-continental US territories.
Just as TAF now has Boards and SMEs, someone such as ASC could have a network of volunteers (or even contracted) appraisers performing field reviews AS intended and as USPAP is written.
Personally, I’d include a requirement that each participant read and sign their understanding of a recent Ted Whitmer, MAI article in WorkingRE about what a review is and is not.
I’d also suggest an IRS style ‘smell test’ screening procedure (despite all fears of IRS) – their appraisal screening process which can take as little as 3 minutes to an hour ‘clears’ an incredible number of appraisals VERY quickly, referring only those that have readily identifiable issues suggesting a further review. THAT would eliminate virtually all or at least most ‘sour grapes’ complaints, and witch hunts that take place when states get their hands on reports and work files.
Deal with the complaints in a two-part process once reviewed. (1) ISSUE oriented – complaint was warranted or not? (2) Complaint not supported but other minor issues noted – no penalty; just a reminder that those supplemental issues should be addressed in future.
For those that appear to have warranted complaints, escalation and referral to a more senior panel of experts could be made. A panel to which the original appraiser could submit rebuttal before any final conclusions are arrived at, without spending attorney fee money.
IF a complaint is ultimately deemed to be a USPAP violation then the panel would/could refer to a formal enforcement board or person in ASC to implement punitive or remedial action. It isn’t that complicated.
That’s an interesting idea, but in the case of my state would be a step backwards for one very important reason – GEOGRAPHIC competency. My state does have all its board complaint reviews done by a third-party appraiser (an actual, working appraiser – any appraiser in the state can apply to the board to do this on a contract basis). My fear with a “national” system is ensuring a complaint is handled on a hyper-local basis. By this I mean it’s not even enough to have an appraiser in the same STATE review to the complaint (someone from Hays, Kansas doesn’t know jack about Wichita or Kansas City – it’s a 5-6 hour drive or more between them), but someone with actual geographic competency in that market. I work in an area at the edge of the state with a major metro area (Kansas City) but you can go a mere 30 minutes in any direction and not be competent in all the submarkets and rural areas surrounding the city if you have not worked them regularly. How is someone from a “national” organization or system going to be competent to even know when and how they need to assign someone with that type of competency? It’s a “they don’t know what they don’t know” situation. A procedure or methodology that might seem atypical or unreasonable in California or New York might be perfectly reasonable in a county with less than 25 residential sales in the entire county in a given year. Right now, as a resident of my state I vote on a governor that appoints 6 members of a state board (half or more of whom are licensed appraisers) that then determine who to send out on complaints. They are not perfect – far from. I am no fan of my all actions of my state board and they could certainly use some help and more funding. But I can’t see how – for my state – it would be an improvement to take this away to some out-of-state national entity and trust that if someone disagrees with my value and tries to throw me under the bus, that I’m going to get a review done by a competent, LOCAL appraiser. Then of course there’s the issue no one likes to talk about – but in every jurisdiction there are people that just don’t like each other. They’ve had past run ins – business disputes, opposite sides of lawsuits as experts, etc. In a perfect world people with bias shouldn’t be doing board reviews on people they are biased about, but, they do because this isn’t a perfect world. I see that issue only getting worse when the structure is taken away from people in the same state with local knowledge of the people involved. Someone in Florida who doesn’t even know the NAMES involved in Kansas certainly isn’t going to know the history.
I’m sorry that other states, including California, are having such issues, but that is for appraisers in THOSE states to solve. Elect people to your state legislature who will solve the problem, change your local state board structure. Or, they can run for state legislature. It’s not actually that hard to do. But again, I can’t see how consolidating this power into a different national entity than the national entity we have now is going to make anything better but just change the names on the front cover of USPAP. I’m all for change, but let’s be sure we’re not throwing the baby out with the bathwater.
My eyes hurt
I’m not sure what that cryptic response means, but let me boil it down – let’s forget about all the in between issues of which type of person should be doing the reviews exactly who should be writing USPAP, who has screwed up whatever in the past and how much corruption you believe is involved with the current enforcement structure – etc. etc. – but whatever system is in place – my questions is
1) WHERE does a compliant that is filed go
2) WHO gets to decide if it is a valid complaint worthy of further investigation? and
3) once investigated, who is the party that ultimately takes actions or decides on no action on that complaint?
If the answer to all three questions is not a group of people in my own state, how is does that improve the complaint process in my location?
I hear a lot of complaints (no pun intended) but not a lot of solutions.
Michael my post above yours is pretty clear in answering your 1-3 items above. There is no reason that review would not be local peer-based. I’d contend and agree that is a critical element.
The same post offers one potential solution. Fleshing it out is a mix of legislative and peer items if the idea ever got traction.
Cryptic remark had to do with an absence of paragraphs…or at least the very long, difficult to read opening one.
What about a four-year term limit for those fools in Sacramento.
Mike Ford, AGA, GAA, RAA, SCGREA, Realtor®: “Commercial appraiser-I have no idea whether the California BREA investigator J. S. is the same one being referred to by you or your partially cited articles.
I suspect not, since JS in California doesn’t know the difference between USPAP and Fannie Mae Guidelines based on his actual court testimony. Hard to believe anyone would voluntarily stipulate to his being an expert at anything.”
Sorry for the truncated post.
‘Brevity is the soul of wit’
I think it can be the soul of good business communications, we all are on limited time he.
I am talking about all those idiots at orea/brea, clean house every 4 years, except maybe the clerical staff.
As you well know there is more to running a real estate appraisal office than USPAP. USPAP also addresses local standards which change quite frequently. They should be better thought of as Fossils ver Dinosaurs.
Some of these fools have never had an appraisal practice, authored an appraisal, or even completed an appraisal in 20 years.
Did not understand the expert and court business stuff. Except that they do not have a legal background and have never been designated as an expert outside the orea/brea. In fact, I do not think their representation of Orea/Brea qualifies them as experts.
MIKE I PLACED A CALL TO OREA/BREA, THEY TRANSFERRED ME TO THEIR LEGAL DEPARTMENT. I LEFT A MESSAGE, HOPEFULLY, THEY WILL RESPOND.
IF I DO NOT HEAR FROM THEM I WILL HAVE TO CONTINUE TO ASSUME THAT THEY ARE ONE IN THE SAME PERSON.
Maybe I’m too dense to understand you, but your post, again, seems to only indicate a NATIONAL entity – ASC, etc. as the decision makers on who to assign a complaint to for review. It’s one thing to have the REVIEWER be local – but it’s another to have the person deciding if it needs to be reviewed in the first place be local. Someone sitting in an office for the ASC in Washington isn’t going to have a clue as to the validity of a complaint in Eudora, Kansas. That solution would be a step backwards.
The only other groups you mention are a series of private appraisal organizations (AI, ASA, state coalitions) which I can’t see how we’d convince anyone at any level of government to “empower” with the enforcement of law when we’re at the same time telling them another private corporation (TAF) isn’t doing its job correctly. And which organizations get this power? What’s the bar to be a valid “appraisal organization”?
I can’t seem to figure out who – other than a “network of volunteers” or various private, national appraisal organizations, you want charged with enforcing the law and deciding which complaints get investigated. If I can’t understand your proposal, how do you expect a Congressman or state legislator with even less appraisal knowledge to understand the benefits of this idea? Again, I’m all for change if it is beneficial, but I see nothing coherent here that has a chance of becoming reality. In the meantime, thresholds are being raised and we are being replaced anyway, so there won’t be any appraisers to file complaints against in short order.
If an appraiser charges enough he can afford geographic competency. That phrase G.C. is only helping the locals to not give away professional, profits.
Any competent appraisers does all necessary requirements to assure competent work.
The complaint goes to ASC in DC. ASC assigns it to screening panel in Eudora or failing that nearest KANSAS appraiser(s). He/She/They give it a smell test. Instead of looking for potential prosecutorial excuses, they’d be looking for Whitmer-style exceptions.
1. Not the client or at least the party that paid for the report? No right to complain. Period.(exception would be complainant paid appraiser and work was never done at all). Specific complaint not supported? Dismissed. Volunteers.
2. Probable/ reasonably probable cause- referred to formal field review by local appraiser (C&R review fee paid by Feds).
3. Violation (significant with substantive impact on conclusion) of USPAP alleged after review-goes to ASC for a disciplinary hearing/proposal. If disputed it could be handled in Feds equivalent of Administrative law court in LOCAL state’s federal offices.
Ok, that’s what I thought you meant, and, we can agree to disagree, but that is a horrible idea and a step backwards for so many reasons.
1) How in the world is someone in Washington DC going to be competent to know WHERE in Kansas to assign this “Kansas” review appraiser? Eudora, Kansas is only 20 minutes from the Kansas City metro area. Their “list” of reviewers will likely have many, many Kansas City appraisers. Problem – Eudora is part of the Lawrence submarket and no one from Kansas City should be working on that review unless they regularly also do work in Lawrence. How will the person in DC (or, rather, group of people with a huge national caseload) possible get that detailed compared to what a person in Topeka, Kansas can do? Trying to defend a report you can’t “prove a negative” and that includes competency situations such as this.
2) What defines “paid for” an appraisal? A borrower that reimbursed a bank for an appraisal fee (and the management fee) suddenly has rights to complain as if they were an intended user? So an “improvement” in the complaint process is to increase the number of people our appraisals are responsible to? I realize there have been some small, localized random court decisions recently regarding borrowers in this manner but the overall national consensus has always been that borrowers for a lending appraisal are not intended users nor do appraisers have a responsibility to them. The report was not written for their level of understanding. Do you want to give every borrower that doesn’t understand that I didn’t miscount his number of bedrooms because two of them are below grade free reign to now complain? Sure, your new system might “weed it out” as a non-valid complaint, EVENTUALLY- but how long does that take? Just being IN a complaint process is an issue for appraisers with their clients, E&O renewals, etc. Not to mention how much this concept will increase our E&O rates.
3) I realize the whole idea of “states rights” is a less-important concept in a big state like California, however here in the smaller states we’re not exactly keen to give up control of yet another part of our lives (in this case, my livelihood) to some national entity in Washington that is not directly accountable to me locally.This allows people in larger states to have the people they want making decisions and deciding what, in Kansas, constitutes a violation of law. What recourse does any appraiser in Kansas have to the procedures and opinions decided by this national entity? Will hearings, court challenges, etc. be conducted at the local level, or now will appraisers have to travel to challenge this since the controlling entity is no longer in our state? Yes, USPAP is “national” but my state legislature has to vote to adopt each new version to make it part of Kansas law and the governor appoints a board that can set procedures, additional requirements, etc. for OUR state as people in this state see fit.
Again, yes, some states have horrible IMPLEMENTATION of their enforcement activities and that surely needs to be corrected, but I’m not sure a series of bad government actions in some states means we need even more and more consolidated government action. The answer to bad government isn’t more excessive bad government.
Michael, I can find an equal number of reasons to not do anything constructive as well as you, but the point is to try to DO something constructive collectively. Do you truly not know the meaning of who paid for an appraisal?
You are dissembling now for the sake of being argumentative. I’ve said several times LOCAL experts provide the screening or whatever level of oversight is desired. At both the initial smell test screening, and the more detailed probable cause screening before a referral to the feds. By the way, I’ve been to Kansas. You have federal offices there.
We presently have federal law (FIRREA) interpreted by a private corporation in Chicago to develop one size fits-all standards for appraisers that in turn require 50 states and seven territories to pass their own implementing legislation to reinterpret what the private corporation’s standards require. States rights do not include the right to reinterpret federal legislation for their own convenience.
If you have a better idea for resolving the problem, we’d all be glad to hear it. I don’t claim to have all the answers, or the only answers. What I strive for is to identify problems and find SOME possible answers.
As a Realtor I have dealt with appraisers who are totally incompetent in the area they are appraising. In Texas we can’t file a complaint for a dispute of value but most of our problems arise from an appraiser not being competent. This past year alone: one appraiser said my modular listing “looked like a manufactured home” What? Does that appraiser even know how to tell the difference??? Modulars are comp’d against site built homes. Looks like a mobile doesn’t count in an appraisal. The same company sent another appraiser out on an older less valuable site built house; sent in his report on the “manufactured home” and recommended a tear down and gave only land value. LOL I protested the appraisal, he said he didn’t say it was a manufactured home when it clearly states on the first page manufactured home and he comp’d against Manufactured homes and declined to correct the appraisal. And that appraisal was not signed by him; it was signed by the looks like a mobile owner of the appraisal company. I made the mistake of not writing down his name when he called to get in the house instead of using MLS access. Today I just protested an appraisal with homes that were 1994, 1998, 2008, 2009 brick homes against a 2015 rock / stone / stucco home. Appraiser lives 2 counties over (suburban area) and is appraising in a rural county. Sent his pics vs my comp pics and the lender was impressed with my rebuttal with 2010-2017 rock / stone / stucco homes within 2 miles and my explanation of how he got the room counts wrong on the listing and 3 of his comps. His comps of 23 yr old tile countertops with reddish orange saltillo tile vs my level 2 granite with ceramic tile throughout are really close comps–sarcasm. He refuses to update his appraisal. There is no process in Texas to get rid of incompetent appraisers. So while some complaints may be frivolous some are impossible. I would love to see this guy banned at least in my county. In 2019 he told me my listing was ugly and crated the contract. But guess what? Sold for asking to the next buyer. So I guess he wasn’t too correct.
I consult with a lot of Texas appraisers. THEIR biggest complaint is about (alleged) incompetent agents. Imagine that!
Specifically, failure to support their listings with CMAs. Or builders who order final inspections before the improvements are 90% or more complete. Only slightly less often against those agents that engage in slander or libel and document it.
Manufactured; modular and mobile (also manufactured, but personal property) have their own special rules. We have so few in my market I simply stopped doing them rather than trying to keep up with ever-changing rules- some resulting from Mtg Co & manufacturers’ pressure. Short answer though, is I agree with you on that issue. One minor correction. Modulars MAY be comped against stick-built…unless there are other modulars around that are more similar.
I’m curious why when you protested the appraisal that there was ever a discussion between you and the appraiser? You aren’t the client. Did the actual client (the lender) authorize you to have direct discussions with the appraiser? Did they first assure that you understand the Dodd Frank Act?
Additionally, if he didn’t sign the appraisal then it is because he didn’t do it; OR he authorized an assistant to sign on his behalf…which IS permissible. Imho not advisable, but allowable.
That’s a practice I’d like to see ended. Both you and I or any consumer should have confidence that the person who visited their property and identified themself as the appraiser is also the one that really wrote it and signed it.
“Today I just protested an appraisal with homes that were 1994, 1998, 2008, 2009 brick homes against a 2015 rock/stone/stucco home.” From an appraisal perspective, your explanation and lament is (no disrespect intended) “ridiculous.”
We cannot manufacture data. You are saying that your market recognizes a difference between a 2015 subject vs 2009 comp but NOT a 2015 sale against a 2010 comp? similarly, brick fenestration and ‘stone’ fenestration MAY in extremely small fad markets have a market recognized the difference, but it would be unusual. Why didn’t YOU provide those comparables that impressed the lender so much BEFORE the appraisal? Too busy?
Some property differences are simply not quantifiable. Example. What IS the market difference for a saltillo tile counter and a specifically designed pattern granite (or opal or travertine)? I appreciate some people find the granite to be more desirable but exactly what IS the amount that the adjustment should have been? Would that same adjustment apply if the style of one house was a Mediterranean design? If it’s not clear from market data (in your non-disclosure state) then the appraiser cannot adjust for it. He or she MAY consider it qualitatively overall in their value reconciliation.
As one of the guys at the Appraisers Guild who regularly has to review our Texas member’s complaints from TALCB, I can directly refute your claim that there is no way to get rid of incompetent appraisers. That’s simply untrue. It’s much harder though to get rid of incompetent agents through the good ole boy network at TREC.
As for multi-county appraisers, how many appraisers do you think live in Eagle Pass? The answer is two. One is residential certified and the other is general certified. One is not FHA & VA approved. It means that VA has to send someone all the way from Webb County-not because there are no closer appraisers, but because quite often they refuse to go there.
I don’t know where you work out of (doesn’t really matter either for our discussion), but do YOU turn down all listings outside of your city? Your county? OR is your license valid statewide?
FTaylor, Agents, LOs, Builders and Appraisers have been having these blame game fights for longer than the 50+ years I’ve been involved in the business in one way or another. As a former agent in a firm that rarely ever got appraisals for less than contract, I can honestly state a large part of the reason is that we did our homework BEFORE (CMA), during (updated data), and after a contracted sale (spoon-fed our appraisers) what we believed was appropriate comparables and market data…or what we wanted THEM to believe was best data.
I agree there are some competency issues in TX among some appraisers (as there are in most states). There are also some who refuse to consider the possibility that they could ever be wrong. You, and more importantly, the client and or borrower have recourse at multiple levels.
They are by far a minority of those working there. IF you get a ‘bad’ appraisal then don’t nit-pick like your examples here. Just go find “more relevant” sales comps like you should have done in the first place; explain unemotionally WHY they are better comparables and submit them through the lender or LO.
By the way, for a while, Keller-Williams out of Dallas/Fort Worth was urging agents to automatically file complaints with TALCB anytime they thought an appraisal was low. Several other states with KW brokers did the same thing. It seems to have stopped after we urged appraisers in that area (& any others serviced by KW) to report agents AND the managing brokers listed with the state to TREC every single time an agent originated complaint was filed with TALCB. Maybe some managers finally read Dodd-Frank and its prohibited acts.
I’m glad you posted this here. It gives us both an opportunity for both sides to be heard.
Well said. As usual !!