Desiree, you have done outstanding work and know more than most. Your dedication to getting information out there is commendable. Have you ever considered getting this information out to a larger audience. I keep thinking that a 60 Minutes episode could go a long way as far as informing the general public. This is a big issue that impact millions of Americans. Would you consider contacting them with your accrued data. Contacting CBS/60 Minutes seems to be a relatively simple process but providing them with a summary of the issues (specifically the danger of Cert 25) make take some time. You can submit anonymous stories directly to them via https://www.cbsnews.com/news/60-minutes-secure-tip-system/ . I think you could, at a minimum, get this information to the general public! You appear to have that kind of drive and concern. If I had all the information that you have researched, I would absolutely take the reigns. At a minimum the public deserves to know their private information can now be bought an sold to the highest bidder. Kudos either way!

It’s sarcasm!

A property data collector does not remove an appraiser’s responsibility. Once an appraiser signs the certification, they accept accountability for all information relied upon in the report, including photos, regardless of who captured them. USPAP places the duty on the signer, so the notion that outsourcing the camera work insulates the appraiser is not accurate.

It’s certainly true that bad actors exist in every single line of work, but pointing to bad appraisals to justify using property data collectors is a major logical flaw. There is a profound structural difference between a licensed professional breaking the rules & an unregulated system that is built to bypass those rules entirely.

To be completely specific, property data collectors are not currently licensed or regulated by any state or federal government agency. They do not hold any licensing that would regulate them as property data collectors. Even if they happen to be licensed realtors doing property data collection assignments on the side, if they make a mistake as a property data collector, absolutely nothing happens to their license because they are operating outside of a regulated profession. The AMC handles it as a simple internal vendor update, while the desk appraiser who blindly signed the report takes 100% of the legal & regulatory blame. When a licensed appraiser skips basic due diligence, they’re operating in direct violation of state law & USPAP. The critical difference is that the state appraiser board has full legal jurisdiction to investigate that appraiser, issue hefty fines, or pull their license to practice. By the way, I sincerely hope you filed a formal complaint about that appraiser with the state board, as that is the only way to clean up the bad actors in our field.

Just to set the record straight, it did not take any actual research on my part to pull those examples. I’ve been managing AppraisersBlogs for over a decade & know every single article published on this platform inside out. These case studies are not obscure internet stories… they’re the documented operational realities of the modern market.

Relying on a system that deliberately strips away standard professional oversight is not a joke or a game. Appraisers are being asked to stake their careers & insurance policies on data provided by an unlicensed property data collector, & ignoring that exposure does not make the liability go away

I even love the fact that you took the time to research cases in which a data collector missed things or was a bad person. Hilarious. Just an FYI, being a data collector doesn’t mean you don’t have a license. Many do. In fact, I have seen many where the data collector has been licensed for over 25 years. That being said having a license doesn’t mean anything. You do know that appraisers (who have a license) do things wrong, unethical or even fraudulently as well. Feel free to look those up as well. I sold my home last year and the appraiser that came out didn’t measure my house. He told me if there is a sketch from the county he never measures, he just uses what the county has.

Brent, if you’re going to backpedal & claim your comment was just sarcasm, there’s an emoticon for that. Throw a wink 😉 or a /s at the end next time so people know you’re just messing around.

But let’s look at your actual claim about property data collectors insulating us from liability. If you think signing off on a hybrid assignment clears you of risk because an unlicensed PDC took the photos, you are severely misinformed. Multiple investigative case studies on this blog prove that PDCs are an absolute compliance & liability landmine.

Look at what happened when Class Valuation hired Paschal Uchendu as a property data collector. He was a convicted felon out on bail awaiting sentencing for orchestrating a $1.2 million armed robbery of a courier van he was trusted to protect. Due to weak AMC vetting & new clean slate laws masking criminal records, AMCs are dispatching unvetted gig workers right into homeowners’ private spaces.

Think about the quality of that data. Another recent case study showed a “trained” PDC who jumbled a house measurement so badly they missed 600 sq.ft. of unfinished space on a second floor. The desk appraiser blindly accepted that bad PDC sketch, causing the unsuspecting buyers to pay 12% over list price & instantly landing them over $100,000 underwater the day they closed.

Worse yet, if you think the state boards won’t come after you for relying on fraudulent PDC info, look at the landmark Clear Capital ClearVal hybrid scandal uncovered by Mike Ford. An out of state desktop appraiser was caught signing off on identical interior photographs utilized for two completely different property addresses at 5557 Winwood Road & 906 Silverwood Drive. The appraiser tried to hide behind the exact same “I didn’t take the photos, the PDC guy did” excuse you’re promoting. Guess what happened? The state board didn’t care about her excuses. She was heavily reprimanded, fined, & her license was suspended.

Under USPAP & standard certifications, the appraiser is 100% on the hook for the accuracy of the data they verify & sign their name behind. Relying on an unlicensed, part time gig worker to insulate your liability isn’t a solution… it’s professional suicide.

https://appraisersblogs.com/amc-hires-a-convicted-felon-as-property-data-collector
https://appraisersblogs.com/clean-slate-laws-bad-policy-could-dispatch-more-felons-2-borrowers-homes
https://appraisersblogs.com/house-measurement-by-property-data-collector-gone-wrong
https://appraisersblogs.com/clearval-value-hybrid-appraisal

Somehow I think you are combining multiple things you have heard and have no firsthand knowledge of and trying to make an argument, but its hard to tell.

You do understand that Fannie/Freddie have an appraisal form called a Hybrid in which they allow someone other than the appraiser to perform a site visit (exterior and or interior) right? You may not do those types of assignments, but they do exist. I have never heard of “inspection runners” before, but that sounds like you are saying an appraiser was doing a full appraisal (1004) and using someone else to do the inspection. If so, that is not the same as a data collector in a hybrid assignment. Those appraisers should lose their license if they were doing that.

You are conflating things when you talk about high-risk loans and complex properties. They have no correlation. You mention training people and not having them do complex assignments. A borrower can be very low risk as they have no debt, perfect credit and great jobs but have a 20,000 sqft multi-million-dollar home with a 5,000 sq ft guest house, tennis courts, pool, horse facilities. Complex home, low risk borrower. On the other hand, you can have a high-risk loan as the borrower has credit problems, limited cash, spotty employment but the house they are purchasing is a small tract home where there have been 3 model matches sold on the same street. High risk loan, non-complex appraisal assignment. Or it can be the complete other way around, as again there is no correlation.

Did I pick the updated version instead of the older guide? Maybe I did. Those used to be standard requirements in the selling guide for all full appraisal services, not just high risk is what I remember. Am I wrong?

There is the language. Full service required, unlicensed persons prohibited from providing the service. FNMA had issued a warning to appraisers some time ago that if they were using inspection runners, as that was becoming a thing, the appraiser could be permanently banned from providing GSE appraisals.

Think of the concept. Just because there is lower risk to the lender, the consumers quality of service requirements are reduced? Imagine needing an ambulance but because you’re not critical, they send the uber guy to give you a lift to the hospital instead. Being a home owner, going through the same lending process as someone with higher LTV and worse credit, are paying the same fees, but you get the pdc gig worker instead of the licensed appraiser, and if an appraiser is involved downstream, you get the slash rate discount desktop service from a guy whom never even viewed your home in person. For the biggest financial investment of your life. Unlicensed inspection runners.

In the normal world outside of lending we call this a double standard or plainly awful customer service. Low risk people should get superior service, because they’re the better customers. Being in touch with a licensed appraiser is beneficial for them and is a safer engagement. It’s also how appraisers can train people to become competent. For as impossible as it is to train people in this industry, the difficulty is compounded further if they have to start with only complex high risk work and nothing but complex high risk work.

How many property data reports have you personally seen that were done by “unlicensed inspection runners?”

I don’t work for amc’s and don’t complete anything other than full inspection full appraisal reports. How many have you relied upon, and placed your insurance and signature behind? You know what they say, if you can’t trust anyone else to do the job properly, you’ve simply got to do it yourself. I’m not trusting part time delivery drivers, visa migrants whom barely speak english, or lonely housewife gig workers whom can’t hold down full time jobs to handle appraisal home inspections, all sourced from exploitative unaccountable third party companies whom secretly skim fees. I don’t even trust other licensed appraisers to do my inspections. I do these things myself. Staying tied to the desk all day for this job? No way.

Did you not read the statement you highlighted? It’s talking about a high risk mortgage!

How many property data reports have you personally seen that were done by “unlicensed inspection runners?”

Now you’re promoting further diminishment of the appraisers role by promoting property data collectors? Here on this site?

Seems like just yesterday that an appraiser would get laughed out of the room, could be prohibited from completing GSE work, and could have their license pulled by the state if they used unlicensed inspection runners.

Because it was just yesterday. GSE microphone has entered the chat.

I think I do have a solution for the photo conundrum that many folks have. I have read many comments in which appraisers say they are concerned that a homeowner could sue over a breach of confidentiality if somehow the photos the appraiser took of their living room showed up somewhere. The solution, Property Data Collectors. The data collector would insulate the appraiser in that case. The appraiser can argue that not only did they not share the photo with anyone other than the client, the same client that has an assignment condition to take photographs, but they can argue they didn’t even take the picture to begin with!

Brent, you worked way too hard to get here. Don’t throw away all those years of grind, the crazy hours of training, & the actual field experience you built up just because the GSEs changed their contract terms. Your expertise is worth way more than being treated like a cheap data clerk for an AMC panel.

You’d be amazed to know how much more you can make by flipping your business toward private & non GSE work. The appraisers who completely ditched the bank work are killing it right now because estates, divorces, tax appeals, & private litigation pay full fee without any of the corporate BS.

In that market, you run the show. You control the contract, you set your own pricing, & you actually protect consumer data privacy. You don’t have to throw your hands up & quit the game; you just have to start using your hard earned skills for clients who actually respect your time. There’s a ton of highly profitable business out there once you step off the corporate treadmill.

No, don’t do that. It’s a good option if all you can get is amc work. Otherwise, try to hang on.

Well, on the other hand. At least 80,000 small business people quit in the past two decades and most of them were residential appraisers…

You’ve got to have a good reason to want to stay.

Your own EO insurer will rush to settle rather than defend. They will not fight the claim against you. They will rush to pay off and make the claim go away. You’re guilty ahead of time if a litigation effort has anything. Independent representation is routinely $30k or far higher.

What does it say when the appraisal industries top lawyer group says just get some cyber insurance and passes the appraisers off? They can’t offer this themselves? Why not?

Not protecting confidential data is neither a reporting error nor a reporting omission. The appraisers insurance does not typically cover this aspect. The insurance cost does not reflect. EO insurance.

Most of the insured residential appraisers, who’s left anyways, are not doing GSE work. Those that do are taking on the additional liability on their own.

Brent, you’re completely misunderstanding what E&O insurance actually covers. Your carrier didn’t raise your rates because they have absolutely zero skin in the game when it comes to state board complaints & USPAP compliance.

E&O insurance strictly covers financial damages from civil lawsuits alleging valuation negligence. It does not insure your license, & it absolutely does not cover you for USPAP violations or state regulatory discipline. Almost every standard policy contains an explicit regulatory exclusion for any legal defense costs, fines, or losses arising from a state appraiser board investigation. If a state board cites you for an Ethics Rule violation because your signature actively greenlighted the release of confidential data to non intended users, your insurance carrier will not spend a single dime to defend you.

On top of that, as the actual insurance risk managers have openly admitted, standard appraiser policies aren’t built to handle pure consumer privacy violations either. If a homeowner sues you directly because their private interior data or functional obsolescence notes were harvested & distributed, your policy doesn’t have a clear path to coverage.

You’re celebrating a cheaper price on a policy that leaves you completely exposed to both the state board & consumer privacy lawsuits.

Brent, nobody is telling you that you’re going to get hauled off to court tomorrow morning. I’m just sounding the alarm on a major contractual shift, & it’s up to every business owner to decide if that exposure is worth it.

If you want a real world example of how this plays out, just look at what happened to the home inspection profession. A licensed inspector honored every ethical bound, but his cloud software silently harvested his property defect data & piped it straight to insurance carriers. His clients got hammered when one lost a mortgage & another saw their insurance spike, & both came back in a total fury accusing the inspector of breaking confidentiality.

https://appraisersblogs.com/inspectors-blocked-the-door-appraisers-handed-over-the-keys/

When a consumer gets hurt by a data leak, they don’t care about the GSEs or corporate tech platforms. They look straight at the signature on the report.