The Appraisal Complaint National Hotline
Jim Park, the Executive Director at the Appraisal Subcommittee (ASC), gave an informative presentation at Valuation Expo this past June. In this session, Jim reviewed the functions and oversight duties of the ASC and current status and regulatory issues with the States. One of the more interesting topics covered in Jim’s presentation regarded the Appraisal Complaint National Hotline, which was established in accordance with the Dodd-Frank Act, put into law July of 2010.
TThe National Hotline, which began taking referrals in March of 2013, acts only as a facilitator for complaints. In other words, the National Hotline identifies the Agency(s) to which the complaint is made through a series of questions on the referral form. The referral form can be completed on the ASC website, over the phone, or by Email.
From Jim’s description, the key to a successful outcome of a complaint is to first determine the complaint type. The hotline is responsible for two types of complaints, USPAP and/or Appraisal Independence. Jim noted the website offers resources to assist in accurately determining the nature of a complaint, as well as other helpful information.
The Director further clarified what the ASC and the National Hotline will not do for the complainant, including: initiating a complaint, acting on behalf of the complainant, arbitrating the complaint, assisting in appealing the outcome of a complaint, or following up on a complaint.
Here are some findings of the National Hotline to date:
- 3,075 complaints have been filed
- Complaints to State agencies and Federal agencies have totaled 450 and 175, respectively
- Appraisal independence complaints comprise 53%, while USPAP complaints are 47%
- The largest percentage of complaints are filed against appraisers (versus lenders, AMCs, or real estate agents) at 61%
- Who complains the most: 43% borrower or purchasers, 42% appraisers, 6% AMC’s, and 5% lenders.
- The Agencies receiving the majority of complaints include the CFPB at 79%, with all the remaining Agencies like the FTC, Federal Reserve Board, and regulators like the Office of Comptroller of Currency, FDIC and the NCUA in single-digit percentages.
- The five states with the greatest number of complaints are: AL, CA, KY, TX and IL. Jim considered CA, TX and IL as logical recipients due to their population size, but he was unsure why AL and KY were high on the list.
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Kentucky is on the list primarily because it is home to some of the most vengeful and lazy Realtors in the nation and some of the worst databases known to mankind. I appraised in over 90 counties across the bluegrass state and only a handful of those counties had data that was reliable. Square footage for the most part seemed to be of little importance to those guys and for years listing the square footage in the records of northern Kentucky counties was an offense punishable by law (kidding…but barely). Northern Kentucky Realtors (Cincinnati’s suburbs) didn’t want to be sued over incorrect square footage so in their twisted minds found it to be less of a liability to list the measurements of every room and hallway rather than the area of the home. (no liability there guys…LMAO). My suggestion for KY Realtors and MLS boards would be LEARN HOW TO MEASURE A FREAKING HOUSE and publish it. If you don’t trust yourself enough to accept the liability involved switch to working on car lots.
A borrower, purchaser and seller almost always have absolutely nothing to do with appraiser independence. They’re not the clients. Just goes to show you, this hotline is being abused from the start. Such non client parties should be disallowed from using the hotline. Remember when the hotline was reportedly in the works directed specifically for appraiser use, with some test phone number or something along those lines and the lines overloaded with thousands of appraisers calling in, so many they shut it down? Somehow it’s changed, so that appraisers would be less likely to call, but rather be called upon. Appraiser independence is more like a myth, than a reality. Brokers direct interested parties to complain upon appraisers. Commission based persons and persons with a financial interest in the appraisal value opinion should be disallowed from using this hotline. Fail – from the start. I’d be way to scared to call the hotline on a lender regarding appraisal pressure. We all know by now they don’t get in trouble, but the appraiser stands to lose everything.