USPAP is Unconstitutional?
Gerald McNamara and Colleen Kudrick were admonished by the board in a five-count takedown. There is a lot of nuances here but the sanctions seemed to be based on the fact that one of the appraisers wasn’t licensed at the time and could not explain how she valued the property. The other who was certified said he did not assist in the preparation but did inspect the property. The client made a complaint and the board investigated.
Seemingly doubling down on damaging their reputations, they filed a lawsuit against the appraisal board and seem to be saying that USPAP is unconstitutional because The Appraisal Foundation is a private organization. This has ramifications for many reasons including:
- The evidence presented against the two individuals is quite detailed, and if accurate, shows that the appraisers were negligent enough for a financial services firm to complain.
- It questions appraisal laws on a technicality that USPAP is overseen by a private organization.
The following documents are available in public record and are worth reading:
- GSE Exec Boasts Scheme to Slash Appraiser Numbers - May 2, 2024
- Valuation Connect Demands Licenses, Denies Fair Pay - April 9, 2024
- Appraisal Reviews for $3 – The Devaluation of Appraisers - January 16, 2024
Hope they win
me too
Sometimes citing that “we HAVE to follow USPAP” to a client is beneficial to me.
Also, we can charge more. Because we have to follow USPAP.
If one is licensed by the State of NJ and the terms of the license is to follow a set of standards for that license, what does the privatization of the organization that maintains the standards have to do with the license requirements. The Constitution is not license for people to go around and completing actions that hurt another party. Definitely interesting.
I like the chutzpah but the state is charging them with violating State regulations which adopted USPAP. I think a bigger issue is states themselves not complying with uspap SR3 and SR4 when they allege violations in their appraisal reviews. I think it’s wrong to have federal law interpreted and implemented through private corporations too, but not seeing the Constitutional violation. Admittedly reading on my phone may have me missing part of it.
Interesting to see the outcome. So appraisers cant hire people to inspect properties but AMC’s can. This is the problem people. Our hands are tied or other wise we could solve the problem lenders are having yesterday
JW – appraisers should not be hiring untrained property inspectors either. That’s why we had licensed trainees originally. Then the powers that be said WE cannot determine when they are competent to inspect without us. Then sate’s like California started telling trainees not to bother getting trainee licenses that made them subject to BREA until they were ready to pass their license levels tests.
Talk about BAD micromanagement! Then certified appraisers were told how many they are allowed to supervise AND that we also have to pass another test in order to teach what we know.
TAF and states need to stop rewording and reinterpreting USPAP. It worked just fine back in 1991. Let US decide when our trainees are skilled enough to inspect without us holding their hands, and let the supervisor sign on the right without inspecting (except as WE feel it necessary) for proper supervision…just as we learned.
Agreed
Mike Ford, they implemented that because of the guys who had 20 trainees and never saw the property or even reviewed the work. How one can supervise 20 trainees at once??
It is an insult that I can appraise a property from start to finish but my mentor is required to hold my hand on the property and sign the report on the left.
Right on all counts TR. Instead of fixing the real problem, knee jerk solutions by FNMA and later by regulators were imposed. With very little if any input from affected appraisers.
For what it’s worth a good appraiser can easily supervise from 4 to 8 appraisers effectively. Even more, less effectively but with some impact. The key is NOT having all raw trainees and delegating to more competent associates. Personally, I think 4 or 5 is the ‘sweet spot’. I won’t hire any trainees anymore because there is no effective way of assuring they all stay busy without more marketing than I feel like doing.
Mike Ford – that’s government for you. They are not able to adequately employ common sense.
My mentor (husband) currently has 2 – myself and another who is sitting for the test next month. He’s exhausted by training and I’ll probably be the last. I could sit but I need 6 college classes for certified and I refuse to take the test twice. So he’ll just have me.
I could see 4-5 would be a great spot IF the supervisor didn’t have to visit every site. I wish someone in the GSEs would thump the investors (mainly the big 5) about refusing to let trainees sign on the left like they allow.
Concur. Four to five is quite profitable and allows for vacations; spikes in work, and even slowdowns if the experience levels are staggered. I’d want a good C&I person (can be good res appraiser that has completed income courses and is detail oriented to be cross training in commercial)); An experienced 2 to 4 unit person to be in training for apartments and a solid sfr person and possibly two raw trainees.
The supervisor couldn’t remember all of the details regarding this assignment, because it was seven years after completion when he testified, and he participated as a supervisor in approximately 7,000 assignments since then. Let’s say he only takes 2 weeks of vacation per year. That’s 4 appraisals per day. How do you adequately supervise a trainee when you’re cranking through them that fast?
Ask the appraiser coach SA? He’s on record as saying HE can complete 3 to 7 assignments per day, while spending as little as 30 minutes doing a review.
Seek the truth.
The fee for this product is $85, with a 48 hour turn time.
These reports are Desktops meaning we have a real estate agent go out and take pictures either Exterior or Interior.
Then we have an Appraiser complete the Desktop portion, just answer the questions on the report. You are able to use MLS photos for your comps.
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SureVal Property Analysis—A hybrid solution that pairs a property report and neighborhood inspection with a streamlined desktop report, completed and signed by a geographically competent, licensed appraiser. This cost-effective gap solution meets Interagency Appraisal and Evaluation Guidelines and Uniform Standards of Professional Appraisal Practice (USPAP). LS Desktop—A traditional desktop appraisal with nationwide coverage that meets Interagency Appraisal and Evaluation Guidelines and USPAP. The LS Desktop pairs a property report and neighborhood inspection with a streamlined desktop report, completed and signed by a geographically competent, licensed appraiser.
I have to ask which is worse the New Jersey case or this offer. You think law suits are running rampant now wait till you accept one of these assignments. And this is the example of how regulators bully appraisers while corporate America will run right over them. Its always the struggle folks. We are the product of Government policy affecting the supply and demand that corporate America is facing. Government policy is not allowing us as independent appraisers to keep up with the demand needed of us. So the cause and effect is corporate America will move on.
Lol, I asked them to send me a copy of their sample report. Any bets on how long I’ll have to wait?
I received a call from Mueller last week asking me to complete these desktops while another appraiser goes out to complete the field work. I asked them if that field inspector was in fact an appraiser. I got the run around. Then the marketer (yes, they do market this process) told me that they pay $50 per hour and they have got the process of completing the desktop taking approximately 1.5 hours. which translates to $75. They W2 the appraiser completing the desktop. Where is the AQB and ASB and all the other alphabet soup agencies? This really does need to be “nipped in the bud” as Barney would say. The appraisal industry was pounded into submission years during the economic crises while the banks and their AMCs created the environment for what is happening now. By the way, Mike, I did receive some sample reports if you want copies I’ll send them to you. They emailed them to me so I would send them to you or Jan by email.
The first Mueller report I reviewed (a generic ‘draft’ version) includes boilerplate that says the field inspection part was performed by Mueller, Inc. Imagine that, the ENTIRE corporation went out and performed the field work! Now THAT is REAL disclosure!
Really tells the appraiser who did what specifically and how credible it is likely to be.
It also includes the false statement that it is USPAP compliant.
Mueller uses insurance inspectors. They measure the house with a wheel that includes the roofline. And they have no clue what they are doing.
And their reports are awful. It is really a restricted report (or should be) but they use Standards 2 and call it an appraisal when it is not. They produce junk and their forms are awful.
If they are calling it an appraisal, send it to the state for review.
That comment about how they measure should (if accurate in most cases) be all the reason anyone needs to decline to do work for them. Deliberately misrepresenting a property’s living area is fraud. Their boilerplate says the property inspections are carried out “by Mueller, Inc.” If so, then THEY OWN THE FRAUD!
Every investor that has ever loaned money based on a Mueller report should at a minimum hire a real appraiser to double check the property GLA. Overstated GLA would automatically inflate the automated value recommendation.
I just measured a house, tax records say 1,494 sqft, it actually is 2,057 sqft.., a very complicated contemporary property. Can you imagine these idiots want to use these type of products !!! I was wondering why the owners were paying so little in taxes !!!
Chris in Tillamook Cty the assessor is never correct. Sometimes they are wrong by 200-300 ft. So then I did one for Mueller that was a ranch…box…in a market with reliable data and abundance of comps. When I got the report I knew it was wrong immediately…and conveniently the amount more than the county was the measurement of the roof line. Which they said in their report – and said it lined up with Google aerial. So a little digging and it falls apart.
I am still stuck on the fact they will accept third party inspections for these but refuse to accept a licensed, trained appraiser assistant. Something does not add up.
It does add up, they can select only the comparables that they want to use, make no adjustments to the sales, get the value they want, and then sell the loans to stupid investors. They then walk away with their money, leaving the buyer, the refinancer, the investor and especially the appraiser holding the bag. it’s just another racket to keep us appraisers from actually inspecting the properties and the neighborhoods. And then let’s not forget if they only pay the appraiser 25 dollars and the management company gets 225, then the management company can keep calling other appraisers until they can get the number that their lender can use.
Yes.
I just sent the four samples to Jan that I received from Mueller the other day. On the front cover of each is the statement which infers that the report should not be considered an appraisal report nor an evaluation.
Use the search bar above in this page. Keywords; What is a clear val appraisal
Cheers. Mike’s going to spill his coffee! Articles forthcoming to be sure. We’re all holding our breath for an amc industry whistleblower to present. Telecom with it’s high turnover is perhaps not the wisest business structure with to launch such a massively controversial operational method.
I am aware of that definition. (Thank goodness).
Apparently the sources of these Desktop Hybrids are not and are redefining a lot of what appraisal is in their world and getting away with it. They claim they are USPAP compliant. They haven’t a clue and are above any law, no less the law that governs our industry.
Baggs, an article is forthcoming. Anna is my hero this week. ANY valuation report that claims it is USPAP compliant; is also pretending at some level to be an appraisal. At first reading, I’ve only found half a dozen outright USPAP violations in the first sample reviewed (assuming they were real reports).
Another was just pointed out. I expect a letter to the state boards in all states they operate in may be appropriate. No worry re coffee. The reason I don’t take calls before 10AM is coffee hasn’t kicked in yet. At 8:21 it hasn’t been brewed yet. This is still last night for me.
Mike, thanks for the kudos but I think I may be just one person out of thousands who figured that these desktop things may either be for inhouse bank products or whatever. In any event, they are not USPAP compliant. That is one reason why this “USPAP is Unconstitutional” story is clearing the way for those who want their product to compete with appraisal/valuation products. Note on the sample covers that reads, in red, that the product is not to be considered an appraisal nor an evaluation. We will be fighting city hall with this garbage. Count on it. We’ll feel like contortionists before this is resolved. Politics is the reason.
Most folks know that right now no GSE has authorized use of these garbage products HOWEVER they are currently being used by AMCs and or lenders to ‘validate’ the real appraisal. Appraisers are already being requested to address concerns derived from these. I have a huge problem with that.
Some states also prohibit investors from being defrauded, and these make-believe appraisals definitely induce or facilitate that. Literally, in every instance, I’ve seen so far.
Their disclosure form says it is an appraisal completed under Standards 2. It’s a very misleading report.
I got one of those order requests yesterday. I told them I will never be interested in completing those and that I didn’t think they are USPAP compliant. But mine was for a whopping $100 instead of $85. It must have been a waterfront 8,000 sq ft house.
Yeah must have been over the new $400,000 deminis. I told the company that sent me the order to take me off of their list period
Jonathan: Thanks for providing the entire complaint along with Exhibits. 505 pages total. I had previously reviewed the complaint itself, but the exhibits were omitted. My vote, which won’t be counted of course, goes all of the Defendants in this case. It seems Plaintiffs are grasping at straws for multiple USPAP violations, assuming the alleged claims against them are all true and factual, as specified in the multiple exhibits. The State of New Jersey’s R.E. Board of R.E. Appraisers includes outstanding citizen professionals. In California, on the other hand, the board comprised of State Employees only. This is one of the actual complaints made (citizens vs. State employees). If Defendants prevail, which is unlikely, there could be some unraveling of USPAP as USPAP itself might be on trial here, indirectly.
Surprisingly to me, New Jersey’s appraisal regulatory board has been one of the best that AGA has worked with. Honest and competent reviews of complaints in a timely manner.
California, on the other hand, has still not done anything so far as can be determined about Sr. Appraiser-Investigator John Schmidt of BREA committing perjury (twice) in my case. It’s still a toss-up between Maryland and California for worst of the worst among state USPAP coercion systems.
Maryland was ahead in the race to the bottom until last week when a California (San Diego) Supervisory Deputy Attorney General suggested that a respondent appraiser having (per doctor) symptoms indicative of extreme risk of heart attacks could cut his stress level by not defending himself at all. Just letting his attorney handle it! Gotta love our state officials! Unfortunately, the respondent is a long time gainfully employed citizen that used to hire other citizens to work for him. That alone is two strikes against him out here.
You see, now that California appraisers are pushing back FACTUALLY against BREA lies and false charges, I’m guessing that the DAG knows her chances are better if the case proceeds without the defendant present to help or testify in his own defense.
I’ve already told his defense attorney I’ll testify if appropriate or work for free behind the scenes helping put a list of questions together like we did on my case. I am SO looking forward to seeing my ‘friends’ from BREA again.
Update. I spoke to the appraiser. He absolutely DID have a heart attack according to his cardiologist. A so called ‘widow maker’ that he is incredibly blessed to have survived. Four stints to open up the blood flow again, and a stern admonishment to avoid any kind of stress or pressure until he is fully recovered and blood pressure is fully under control.
Well done BREA! Your ham-fisted arrogant coercion almost killed this appraiser!
California could be considered a socialist state. LOL
Charges….”the fact that one of the appraisers wasn’t licensed at the time and could not explain how she valued the property. The other who was certified said he did not assist in the preparation but did inspect the property.”
They are falling back on The 5th Amendment….
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
What the hell does this have to do with anything…life liberty and etc…. so they should keep their licenses ??? please let me know !
We are licensed or certified….These appraisers have no leg to stand on….but its a shame, the $12,000,000 sales price in 2005 in 2010 must have dropped 25-50% so now they are going after the appraisers for crappy work….the lesson here is to WRITE EVERY APPRAISAL LIKE IT HAS TO BE DEFENDED IN A COURT OF LAW !!! No matter how long its been…!!!
Sad in so many ways !
Imagine any other profession doing this – Doctors and Lawyers claiming their State Boards we’re breaching their constitutional rights. This is the single dumbest defense one could come up for for the guilty.
While I dont know whether or not ot is unconstitutional, I do think that USPAP is so bogged down on unneeded rules that it is becoming very cumbersome. In addition, 99% of the state boards and their “accusers” dont have a clue as to how to apply or interpret USPAP.
THAT is as accurate a statement as one can make about USPAP.
I blame it on TAF itself. The ONE thing they were charged by Congress to do, they have failed miserably at.
Because there are 57 different flavors of USPAP interpretation by regulators TAFÂ and AARO have opted to disregard it completely when teaching appraisal investigators how to check for USPAP compliance.
Instead of following the guidance contained within USPAP itself, they are taking the Roberta Ouellette (TAF/ASB) approach of opting for meaningless issues or areas that a prosecutor may be able to successfully argue. Professional opinions are effectively outlawed if they cannot be proven to also be facts. TAF failure is complete. Almost none of the public respects USPAP; and increasingly fewer and fewer appraisers do.
You just can’t make this stuff up folks.
They keep changing uspap so every appraiser in the country has to keep buying their books, just like the college kids !!!
Does that the American Bar Association and their rules and regulations unconstitutional as well?
Watching closely. One of the attorneys listed on the complaint is also a brilliant MAI. Don’t count the defendants out too quickly.
USPAP is on a 4th exposure draft for the next change.
If this wins in the courts, it’s going to be brutal to the state boards, when complaints for non-FRTs are filed.
How come, everyone who is in competition with appraisers, gets to help write the USPAP, and the FAQ’s?
We are seeing language changes in AMC definitions that may in fact skirt around USPAP all together. I watched John Brennen try to explain at what level the appraiser can have assistance in the inspection process and it was a brutal mess. More confused now than ever. That’s why I have to ask why everyone seems to want to go after the appraiser on one side which don’t get me wrong if an appraiser is not following USPAP there are consequences but on one side the appraiser is held to so many standards until the narrative changes and boom USPAP definitions mean something else
Because TAF lost their way long ago. I blame Congress though. Failure to provide adequate oversight. The mission or more appropriately the authority of ASC is limited. It also involves having the ability to dance on the head of a pin before all the powerful interests that have the ears of influential Congress Members and Senators from both houses.
IF Congress is serious about FIRREA as originally intended, then they need to eliminate ANY state licensing requirement and make it a national federally enforced license with uniform interpretation and enforcement.
As currently operated in many very large population states USPAP is not quite as fairly enforced as one would expect from even the worst kangaroo courts.
They pay TAF more than we do.
case originated 7yrs ago? Hell, I don’t remember where I was 7yrs ago! Oh, still appraising. Jeez what a mistake that was!
Kudos to Miller for bringing this baby to print; and thanks, but don’t need to read it all or any of it, ’cause I know where the problem originated: INSPECTION.
I hope McConMara takes’em down for the count….and for the head skratchers out there that’s liberal use of Gaelic
Failure to report and analyze prior sale history of subject seems a more critical issue than the inspection itself. Compare prior sale price and date to the appraisal value and date for context of my statement. What did I miss?
See JW’s responses. On Target. All of JW’s responses.
Everything and anything that calls itself an Appraisal Report, Craig, starts w/an inspection. On the ground, exterior and interior. Drive by? Windshield? Try dragging that camel into court: no judge, no jury, no attorney, no realtor will give it any credence what-so-ever (I’ve been in close to 100 court room litigated real estate civil cases, as recording observer and/or witness/consultant and been jury chief on two occasions). Period. For Chris, above: yep, write everything as if it goes to court. That is precisely how I trained my 20-22 appraisers. This is America, land of litigation.
and in this era of ‘Big Data’, isn’t the fact (or should be the fact) that appraisers INSPECT be the remaining unique characteristic of an appraiser?
and to further beat a dying horse, a Mass Appraisal is not an appraisal in any way shape form. Its a stat study, and better have your stat creds in order or be from the Assessor’s Office.
Merv:
Does USPAP require an inspection of subject property to provide a credible appraisal?
USPaP does and doesn’t. USPaP contradicts itself so often I get dizzy reading the thing. For consistency, direction and a goal, read the Old Testament. But if seeking the ‘real’ answer, ask yourself, does what I’m doing pass muster with a judge, attorney, jury, realtor, peer appraiser…oh yeah, and your local State Office of Real Estate Appraisers, whomever that may comprise and whatever orders at the moment they may be following. USPaP has some 50 ideas what an appraisal consists of, so hewing to the USPaP line gives you great leeway to do whatever the hell you want to…NOT. Craig, I don’t think USPaP fiddles too much w/the idea behind inspections, but wait two years and ‘they’ will come up w/15 more ideas what an ‘appraisal’ is!
Craig, no it does not. What it DOES require is credible support for any opinions rendered as to condition and characteristics of the property. Respectfully Craig you are rehashing old arguments.
One side contends “trained” experts can give credible responses concerning physical characteristics (though no credible evidence has ever been shown in any sample hybrids).
Another side contends that there is far more than assumed property characteristics at play in a market analysis.ASC and TAF may think describing a neighborhood (bounds) is factual. I strongly disagree. It’s subjective and opinion derived.
What’s hypothetically possible is not the same as what’s proposed or practiced. Even in the hands of experts, desktop values are garbage compared to real appraisals. Or were before the definition of appraisal was bastardized to recognize garbage as something other than garbage.
Mike: mine was simply a rhetorical question in response to a statement that “no inspection” was the main issue. I didn’t read all 500+ pages, but from what I read it seemed to me that appraising a property for 3X the recent sale price was a more significant factor. Failure to analyze & reconcile a recent sale price relative to a value opinion. I have been involved in civil litigated cases involving hundreds of $millions$ in claims with similar scenarios. A failure by appraisers to explain how and why this is possible. A combination of major Fraud, Incompetence and Gross Negligence. Inspection of subject & market data sometimes a little further down the list of importance. Even USPAP, which failed to fix appraisal problems, agrees with this.
USPAP was never meant to improve quality and credibility of appraisals.
The only real purpose of USPAP is to provide a means of admonishment of Appraisers when they fail to do the right thing by being unbiased, ethical, accurate, credible. For FRTs as failure of S&;Ls was the only driver. There was no no other reason for USPAP.
Craig, understood. In all honesty, I semi usurped the articles thrust for my own favorite soapbox. While I think there is/was a lot of meat that could have been the focus of the suit, my personal perception is the plaintiffs will fail on the specific approach they took. Then again…
Does, anybody not the appraiser, can inspect the property fall under the acceptance of bias?
It’s risky to work with appraisers. We know too much…  Papers!!! If you have papers, you can NOT inspect…
I’ve requested mod edit the long post below. A developing story.
The same question for the laymen; Is it biased and not objective to insist that lessor qualified and unlicensed persons perform such important tasks when there are adequate volumes of qualified licensed appraisers available and the task is best suited for the appraisers in the first place? Geesh, let me fire up the old brain cells and just speculate why commission based interests would not want a qualified objective third party to participate. Probably they just want to save the borrowers a dollar and a day. “Don’t worry. We’ve investigated ourselves and found we did nothing wrong.” Called this 10 years ago when I constantly made requests to be shown home inspection reports but nobody was willing to comply without a fight, no matter whom I asked.
New rule; The appraiser must rely on the least qualified non inspector sourced for only valuation inspection purposes, whose report is not shown to the buyer, and the appraiser must remain objective by not reviewing the actual home inspection report. Logic? Who needs it.
Just saying:
Wells Fargo: You Can’t Sue Because You Should Have Known We Misled You
https://www.vice.com/en_us/article/7xyb49/wells-fargo-you-cant-sue-because-you-should-have-known-we-misled-you
But, But, our selected home viewer provided reliable data to the appraiser.
LMAO.
Look at the itemized list on pages 10, 11, and 12, especial items 84, 85, 86, 87.
Ooops.
an interesting case, Marion, due to one participant: Cushman Wakefield. Which is why it will be settled out of court…and CW is why I said from the start (1980’s) it would be a terrible event for appraisers to separate themselves from the NAR.
There is an obscured opponent here, its not Cuomo, not Barney Frank, not Joe Biden, not Trump, not Bush, not the Clintons; it is the BANKS. Marion, if I were to ask you who spends the most money on lobbying, who’d you respond with: Pharmacy/Oil/Steel/Retail/Calif prison guards/Unions/JoeShittheRagMan? The BANKS, yep the ABA. Beginning to ‘get it’? The banks operate across/with/in every branch of the US gov’t. They (not Keating or his cohorts) got rid of the Savings & Loan (via Cooley at Wells) and they are keeping an eye on this situation as we muddle around here.
Obviously, you don’t know me that well to guess that would be my response.
Ask Baggins or Mike, or Joyce, or Dan.
I have no recollection of that event senator.
I can neither confirm nor deny I have ever completed ‘an appraisal’.
Cheers.
So why, is this case in court now?
What’s the possible outcome?
14 years of lost fees for two individuals???
Or is there something more, bigger, at stake, to cause this filing now?
I think that non-FRT thing is the key to all of it.
Exactly, Marion. I’d like more discussion/exploration of the F in that FRT deal, let alone the R and T
Somebody is concerned. Non FRT is big, Yuge! Prescient case?
This? https://www.sec.gov/Archives/edgar/data/1628369/000119312518225157/d522375ds1a.htm
See, now I’m in over my head again and digress because I honestly have no clue and just found this on google. Cheers.
I’m late to my own post, but when I wrote this on Housing Notes, the post title here on Appraisalblogs is inconsistent with what I was conveying. It would be great if the webmaster would simply change the title from:
“USPAP is Unconstitutional!”
to:
“USPAP is Unconstitutional?”
Thanks in advance.
Done! Thanks Jonathan
They’re arguing the point of jurisdiction. Someone lost a lot and a lot and a lot of money…
Article 1, section 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, OR LAW IMPAIRING THE OBLIGATION OF CONTRACTS, or grant any Title of Nobility. (the root cause and answer to these problems. The entire lending industry frt and non qm have both adopted this reactive mindset where they can bail out bail in seek insurance, and have neglected to maintain strict validation measures for the amount of money they loan. What if the moment they loaned it there was nothing left but trust in their sourced valuation and agency professionals? If they made bad loans they would get nothing back with no recourse from the court? Think they would move to avm’s or perhaps would they ask for second appraisals? Think appraisers would outsource anything or trust anyone but themselves?)
Not sure if this is an attainder issue though. What appears to be happening is gross negligence, inadequate development methods, and overvaluation that led to financial loss. The plaintiffs appear to be attempting to use the state to counter their own negligence and seek vindication of their reputations through a complex interpretation of the law, presumably to impair their liability. Even if the uspap book is not applicable under their argument, that should not relieve them of civil liability. Nor should that mean the lender gets to dump it all back on the appraiser, they made the loan, ultimately it’s on them and their sourcing and validation of opinion methods. He had a license, therefore he’s liable, that does not fly there was no contract to that end.
What an amazing read. Detail as well as relative perspective, very thorough research, and excess report presentations as even remotely conceivable as necessary, that always matters, no matter what the scale.
‘Appraisals that cause you to know less about the market than before you actually had read the report.’ I read thoroughly, approx 2 hours, then skimmed after like pg 70′ something, exhibit b tan page. It’s not my case and not my fight. But why in the heck didn’t someone order an additional appraisal, review service, or just something?
When I wrote my demins letter recently I mentioned; How are appraisers supposed to become equipped for high end important tasks if the majority of their duties and responsibilities for lower cost work are put in the hands of non appraisers? How does an appraiser become qualified for high end, if they don’t get a whole lot of low end work to forge the way and train the mind and method? If there would have been comprehensive detail about every building, every plot, every plat, every interview, every value individually, the report would never have blown back like that. Just speculating.
They appeared to be lost in the glory of the position, and were too busy with their heads buried in analytics to recognize the real property right in front of them, supposedly, of course. Cheers. Edited, too much there, hopefully tuned down now.
Bags,
De Minimis. An abbreviated form of the Latin Maxim de minimis non curat lex, “the law cares not for small things.” A legal doctrine by which a court refuses to consider trifling matters. (From the free legal dictionary online)
So, what percentage of belly up foreclosure loans, from 2006-2012 were below the $250k de minimis, and was the de minimis so high as to render consumer protection laws for mortgaging, useless to the majority?
Baggins; A hobbit whom has shown extra ordinary ability to resist the dark power of the ring. Always educating people. That’s why I like it when you swing by.
Try as I might, I was unable to find a trend chart detailing your exact request. However I did find this, interestingly enough had been posted on Millers website news feed section. One might infer what proportions of total loans are exempt from ‘demins standards’, both now and then. Draw your own conclusions but it seems obvious to me that a hefty majority portion of originated loans will be exempt from many necessary checks and balance applications if they raise the dimins, and all too many were exempt during the previous run up. Correlate this with previous demins and default rates by type and time… Too much effort, just easier to say buyer beware and you don’t actually own the land and home until the last payment and you’ve hired an attorney to assure clear title. $400k is a trivial amount to mega banks, thereby illuminating who’s driving policy and for what reason these days.
Now don’t you wonder WHY you can’t find that data???
But I did find something almost as interesting.
http://economistsoutlook.blogs.realtor.org/2018/05/01/property-values-by-state-from-2005-2017/
Wow, that’s interesting data. What does it mean? For me personally in CO, it’s not cool! Home prices tripled in my area, doubled as a minimum, and now there are bums with signs everywhere and all these freeloaders or illiterate people on corners begging for dollars. And we can no longer bounce upward, articles detailing exponential demand in handyman and remodeling services abound, along with a much higher cost scale for those services.
Oh help me, I can’t get a job and am personally god awful at money management. I’d bet half of them earn more than me, which is not much but enough to keep swinging, well under the medians for my county. A 20+ lb bag of rice costs $10 bucks at costco. I’m tempted to give it to them but do not want to promote such illegitimate behavior. The majority of them are not homeless, not by a longshot. Out there begging with stupid signs and expensive strollers with baby anchors. I know how expensive those strollers w/ detachable cribs are, we never afforded those while working 2x people full time through the young years.
One thing is for certain… Attached. Cheers.
Bags, you’re still my hero.
But look at those median prices, think about the de minimis amount, and wonder how one de minimis threshold amount, protects…….. the entire country?
Oh, and might check on 2006-2008 non-bank financial problems, and see that:
Ditech declares bankruptcy – again
https://www.mpamag.com/news/ditech-declares-bankruptcy–again-158327.aspx
OK, for the inexperienced folks out there not wanting to get stiffed on fees. A business bankruptcy one time is usually a result of incompetency. It should be a warning to ALL to stay away.
Even a hint of a possible pending second bankruptcy should set off all kinds of alarm bells. DO NOT WORK FOR PEOPLE ON CREDIT THAT MAY BE GOING INTO BANKRUPTCY! Require that they collect the fee up front AND pay you before you ever schedule the appointment! If they say no; you have just saved yourself from working a day for free.
Thank you. Link inactive. All good though.
One interesting proposal which constantly resurfaces is that there can be no logical ‘single standard’ for any given community or location. I sort of like the percentage based approaches rooted in medians and income, etc. Then again, that falls short because of HUD tables, the fact the government sets any thresh hold and policy surrounding that is a constant driving factor for the hucksters to drive all the way to that line, and park it there. True market conditions and all of that. Unfunded insurable risk is reported to be like in the hundred trillions or something to that regard. The number is so huge, one does not even need to bother remembering it to get the point. There is more potentially unfunded liability with insurers dealing with lenders and also housing than there is money in the entire world. Joe Joaquin at the Patriot Trading Group; ‘They seem to be having a difficult time with the math.’
Don’t ask me, I’m just the appraiser, standing on the sidelines, popcorn in hand.
Ron: ‘The time will come where people will again be receptive to the principals of liberty and private property rights, having watched in real time, in their generation, how central economic planning did not work and created massive bubbles and defaults.’
I have personally found no better political and financial education in my life than simply watching The Liberty Report nightly on youtube. My 5 & 7 year olds sometimes talks about economic liberty and such. They are good at liberating change from the junk drawer. Interesting educational opportunities. She’ll get the hang of it much sooner than the other kids, that is for certain. Unlike most of their middle class peers, we will be gifting them a house free and clear, one day.
That picture is SO worth clicking! Princess Godzilla eating a lime and holding stake…and your daughter (other young princess) prudently keeping her beer out of reach on the other side of the cutting board.
I wish I could give this pic ten thumbs up alone!
Mike:
I have not seen the appraisal products referenced that are not USPAP compliant as I don’t do AMC or Lender Work.
However, I am curious as to the content of the reports so I can keep up. Can you or someone post an example of what these look like? Or, email reports to me privately to look at. Thanks. Craig@CraigGilbert.Net
As requested Craig; The blogs article that will live in infamy. Man, has it already been a full year? Yes it has.
http://appraisersblogs.com/clearval-value-hybrid-appraisal
They’re arguing in circles about jurisdiction instead of outright sending people to jail for fraud on multiple levels. Perjury, incompetence, fraud, deception, inadequate oversight resulting in the financial harm of others.
Great response, Mr. Baggins!!