I’ve never seen Dustin’s work. I HAVE been on his podcast years ago. I wont criticize everything an appraiser does if I’ve never reviewed or even seen his work.

I have respected peers (& personal friends) that use SOME of his suggested methods, whose work I have seen. Their work is not just good, but usually darn good. Not perfect, but certainly very good.

I don’t agree with all his power group suggestions (for me). But for those in areas where some or all could apply I discourage dismissing out of hand. Find out the facts before rejecting it because some here regularly post negative comments about him.

IF you want to double your volume or income, consider all LEGAL & ETHICALLY permissible options.

If something seems ‘out if line’ for your area, then recognize it and don’t do it.

Just be fair.

Concur. Thank you.

Thesaurus pigeon? Awesome. Dustin backs into these arguments, as he advocates for himself. He did the same thing for bifurs and just can’t get away from the dream of something for nothing and outsourcing everything. He’s dreaming right now of sailing away on a yacht while someone far far away takes all the evals and completes them with his signature in a practically liability free setting. I imagine him being like a hollywood actor, kicking back alligator boots on his rainforest wood desk, cigar and whiskey in hand, berating the maid and bossing everyone around when he bothers to show up in the office. Ha! For the record, I did not outsource the production of this joke.

Very, very good point!!!!!!!

Yep, that’s probably why this particular appraiser is advocating for this yet again. Million dollars a year is not enough for that guy, he wants to be some appraisal enterprise and we’d really all appreciate if he would just move to sales or some other brokerage already. He can certainly afford to do so. I would remind Mr Harris that the appraisal is a key function of collateral worth reliability and comes quite literally at the end of the mortgage production line after nearly all other qualification functions and housekeeping events are completed. This is one of the most important functions of mortgage lending, the value assurance process, which should not be diminished or taken lightly just to earn an extra dollar. Appraisal is not just all about the numbers and we don’t make value, we analyze value. Geesh. Mike you continue to impress with great well thought out commentary, Julio hot on your heels.

Great response Julio. For what is worth, according to TAF we DO have that freedom.

As long as they conform to USPAP. That in turn makes them appraisals when performed by appraisers.

State licensing laws may further restrict what appraisers can or cannot do.

Respectfully you missed a significant difference between the two. Appraisers who provide appraisals are subject to stringent and enforceable specific standards. There is nothing similar for evaluations.

“The Interagency Appraisal and Evaluation Guidelines (IGs) defines an evaluation as a “valuation permitted by the Agencies’ appraisal regulation for transactions that qualify for the appraisal threshold exemption, business loan exemption, or subsequent transaction exemption.”

Further, the IGs declare that USPAP “identifies the minimum set of standards that apply in all appraisal, appraisal review and appraisal consulting assignment,” but USPAP has nothing to add on the development and communication of evaluations. Since, by definition, an evaluation is not an appraisal (except insofar as USPAP and some state appraisal boards are concerned) this description makes it clear that appraisals and evaluations are two completely different animals with different purposes and functions.

Here are the major differences between an appraisal and an evaluation:

An appraisal requires both an analysis of the property’s highest and best use, as well as a summary of the logic and rationale behind that analysis within the report. There is no such requirement in an evaluation.
An appraisal requires an analysis of reasonable exposure time, as well as its statement within the report, but not in an evaluation.
Currently, an appraisal can present in only one of two formats, an Appraisal Report, or a Restricted Appraisal Report. An evaluation has no such requirement.
USPAP requires an appraisal to be credible. The IGs require an evaluation to be reliable. However, the IGs do not define reliable, which USPAP defines as credible as worthy of belief. The two terms are not synonymous.

Who is qualified to perform evaluation? Section VI of the IGs carries the title “Selection of Appraisers or Persons Who Perform Evaluations.” According to the qualifications listed as necessary for persons to do appraisals or evaluations under the IGs, the work performed must be periodically reviewed by the client institution. The person selected must also:

Possesses the requisite education, expertise, and experience to competently complete the assignment.
Be capable of rendering an unbiased opinion.
Be independent and have no direct, indirect, or prospective interest, financial or otherwise, in the property or transaction.
Hold the appropriate state certifications or license at the time of the assignment, if they are an appraiser. Persons who perform evaluations should possess the appropriate appraisal or collateral valuation education, expertise, and experience relevant to the type of property being valued.

Since federal banking regulators do not consider evaluations to be appraisals, there is the question of who will enforce evaluations as state appraisal boards enforce USPAP Standards. Putting this question to those who are in the positions to know revealed that nobody has an answer to that question.

Therefore, appraisers should have the opportunity to choose to perform or not perform evaluations, just as they are free to perform, or not perform, any of the [various] types of appraisal services.”

“The secret to success is knowing which assignments NOT to take” [Gene B. Gracer, MAI]

More importantly, there is no law saying that all CPA audits or reports for use in federal purposes have to comply with USPAP. There are no state laws to that effect either as far as I know. They are regulated differently.

FIRREA 1989 contains the specific rules concerning evaluations and who may perform them. In FIRREA as originally written, evaluations were not permitted to be called appraisals. Because they weren’t appraisals, no license required.

Fast forward to the self-serving interests of today- Lenders and title companies wanted “evaluations” as another cut-rate fee, half-assed analysis that doesn’t have to conform to any known standards. That is why appraisers couldn’t do them. WE have to perform in accordance with USPAP.

Then TAF decided to further confuse the issue showing “how” we could do them. Then about 16 of the 50 states introduced contradictory language in their own USPAP legal requirements /state laws and complete confusion results. I know I’ve written about the various contradictory state regulations (here) previously.

Some states say that since they aren’t an appraisal, USPAP doesn’t apply. Other states mandatorily call them “evaluation appraisals” and carve out exceptions.

Promoting ‘evaluations’ is no different than promoting use of AVMs or bifurcated hybrids inspected by incompetent runners.

They are intended to be done to circumvent USPAP and sound appraisal requirements. Now lenders want appraisers to do them in the mistaken belief that if done by us they are given more credibility.

Catch -22 Yossarian!

Just as soon as borrowers can select their own appraiser, we should open up the doors for more personalized risk management approach.

Lenders just dump the risk on taxpayers so if evals are to be common, we taxpayers insist the government is no longer involved with lending insurance.

Think they’d still be pushing those products if they had to deal with actual risk management without taxpayer backing?

As usual, Dustin puts the cart before the horse.