Unintended Use & Misleading Appraisal Reports

Unintended Use & Misleading Appraisal Reports

Unintended and Potentially Misleading

At what point do we ALL say enough?

When they insist on unlocked PDF, XML or ENV formats that facilitate recipients in removing portions of appraisal reports they don’t like? Too late.

When they blacklist appraisers for refusing to make post effective date contract analysis changes?

When they set the fees we charge?

When they change the scope of work after assignments are completed?

When they LIE to borrowers about how much the ‘appraisal fee’ is?

Now we have several that think THEY own MY professional work product? Like HELL they do!

Any, repeat, ANY appraiser that assigns all ownership rights to their appraisal is foolish and MAY be inadvertently violating USPAP by not taking reasonable steps to assure that the appraisal is used only as intended and is not used for purposes that are unintended and potentially misleading.

This would include the unintended resale of portions of the appraisers professional research, development and intellectual property to uninvolved third parties…for example folks like CoreLogic, Clear Capital or any others, to use in any manner and context that they choose.

The ONLY solution to this, is to push back and let these companies know that you may like to do business with them but that you are contracting ONLY to provide USPAP compliant appraisal services for a loan and you are NOT relinquishing your rights of ownership associated with a professional work product! Further, START COPYRIGHTING YOUR APPRAISALS! Learn how and DO it. The FNMA statement of Limiting Conditions now has me responsible to far more downstream “users” than I ever intended. It’s not a stretch to think that some aspiring attorney will eventually seek the appraisers E&O “deep pocket” when some unauthorized study based on our reports inconveniences some unintended user that relies on it for some unintended purpose.

If MY work products are used to build a $400 million dollar data corporation then I want my share! ANY firm requiring this as a condition of employment should be boycotted 100%. Further, consideration of class action suits need to be considered. Restraint of trade? Fraud? Misrepresentation? How much should this practice ADD to the necessary C&R fee?

Since borrowers usually pay for the appraisal, have THEY been informed that the appraisal will be used by third parties for their own commercial interests? Should borrowers have been compensated for the unauthorized use of appraisals THEY paid for that were subsequently used by data aggregators? When CoreLogic said they based a study after reviewing over a million appraisals they were acknowledging such unauthorized use. Seems to me that SOMEONE owes an AWFUL lot of money to a whole bunch of borrowers and possibly appraisers as well.

Check with your attorneys people!

This one item got me so angry I don’t even want to comment anymore on MY submissions for worst AMCs (First American and any affiliates, CoreLogic, LRES and whaever old LSI is calling itself these days Knight or Black Knight or whatever).

It WILL be a topic for Guild attention in the immediate future! YOUR thoughts?

Michael Ford
Latest posts by Michael Ford (see all)
Image credit flickr - János Csongor Kerekes
Michael Ford

Michael Ford

Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory

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13 Responses

  1. Mark Skapinetz on Facebook Mark Skapinetz on Facebook says:

    There is even more to this. companies like Coester and others sending the appraisals for review overseas to India to companies like Flatworld. They do the reviews and all of the so called confidential info in the reports is now exposed to a 4th party in another country. I’m sure the consumer would love to know their loan info, purchase price, home info etc as well as comparable sales are now part of a data base of a foreign country. I mean the AMC charges 500 for the appraisal pays the appraiser as cheap as possible and past what $10-25 for people in India to go over the information and try and communicate it back. No wonder these amc’s make a ton of money. Add to that your license and any of you who attach your E&O information to reports is now part of this database and who knows where else. Shady business practices going on from the amc’s and who knows what else.

  2. Avatar Koma says:

    Mike, Didn’t we already do this when UAD was shoved down our throats?? I’m not getting one cent for all the info that is being gleaned from my reports and I’m sure that info is being sold somewhere.

    On another note, thank you AB for bringing back the edit button. My spelling ain’t always the best..lol

  3. Baggins - Dare FNMA to paper print the CU database. Baggins - Dare FNMA to paper print the CU database. says:

    Well, it’s only data.  It was never my data to begin with.  I just aggregated it.  They’re only homes.  They were never my homes to begin with.  I just documented their state of real property.

    It is true that data brokerage is out of control.  Have you seen the free PBS movie;  The Persuaders?  You’ll never see political emails and calls the same way again, once you understand how Axiom and other data brokers like them are basically fulfilling roles of for profit fusion centers.  Just wait until FNMA is short of funds, and offers the ‘appraiser access’ package for the volume appraiser producers.  A subscription to the FNMA CU system is only a turn into the future.  Although personally I’d put my money on Corelogic acquiring a national FNMA access contract first, then reselling that with another in an infinite stream of cleverly but pointlessly repackaged software apps.

    What we need is a ready made form available in the aci and alamode docs section, which is ready to go checkbox generic static, etc.  Legal disclaimers which would be readily applicable to all gse appraisals for the benefit of the appraiser.  Whom is not using the environmental addenda 2 page check box form?  Appraisers can save the summary of salient features nonsense, I want to see the environmental addenda instead.

  4. Avatar Marion says:

    More about this:

    Any, repeat, ANY appraiser that assigns all ownership rights to their appraisal is foolish and MAY be inadvertently violating USPAP by not taking reasonable steps to assure that the appraisal is used only as intended and is not used for purposes that are unintended and potentially misleading.

    Those agreements where the appraiser is turning over the ownership of the workfile, to an AMC who is neither the client nor the intended user, but rather is an AGENT OF THE LENDER by law, (That would be the AMC final Rule, and the IAEG 2010), really needs to consider that now the appraiser is, holding/storing property that belongs to the AMC, into eternity, for free, and, if the appraiser dies, the AMC can sue the appraisers family/estate for return of their property, which the appraiser has protected for confidentiality issues.

    Also consider that because there is no time limit on the ownership of those workfiles, the disclosure of what’s in those workfiles, suddenly takes on an entirely different set of legal precedences, far beyond USPAP and the record keeping rule, and you making YOUR workfile available for yada, yada. Because it’s no longer YOUR workfile to turn over for peer review, or the state board, or anything else. It is the property of another, and golly ghee, does that mean if the AMC goes out of business, you are released from holding their property? And what if the AMC is bought out by a bigger pig?

    Liability, liability, liability. Get an ATTORNEY to read and review before you sign any of these agreements.

    • Deplorable Baggins Deplorable Baggins says:

      Justified or not, affording a lawyer is not on the menu. Especially for routine things like reviewing SOW and such. The force of the peer support network is strong, much stronger than the force of external pressure. Wise appraisers know to respond to the AF poster with the image of the old lady drinking moonshine, and not the one with the image of the blue man. It would be nice to be able to manually upload pics to this site, and not have to hot link them. I’ve got some great funny ones I chop shopped at home, with Dr m, in various compromising positions and scenarios.

  5. Avatar Proud deplorable in the basket says:

    The moonshine old lady image has been changed for awhile.  We’ve missed you.

    • Deplorable Baggins Deplorable Baggins says:

      Gave it a shot today. Although there is a lot more content, the forced ads, excessive page load times, it was too much to bear. Tell wayne he can marry his advertisements if he loves them so much. Waste of time and energy. If I have to be exposed to ads, just to have free speech, I’d rather go elsewhere, maintain my free speech, and maintain my sanity. One ad a day, that’s my limit. It’s a difficult run at first, but eventually it grows on you. They can keep it all. IF I want it, I’ll seek it out. Otherwise advertisement is fully out of control and all the little tools and useful idiots whom put advertising before people are just greedy children in the end, no respect for others. Ad free spaces, that’s what I’m all about. Also of important note, you guys may view this site differently than me. I don’t have any facestupid accounts. I roll full time with classic ad and flash block. I stop scripts don’t allow all these processes, etc. It’s so nice, you should try it. Just the facts, they can keep the rest.

      But thanks again Marion. You and many of those fellows I used to chat with really changed the game. Lately that guy Stillman took me to the next level and put thousands of additional dollars in my pocket. Everyone was empowering each other for a while, and magic happened. If they ever expect me to turn this back, I’ll find a new line of work instead. Feels good to get some dang respect for once. You know, when mentor kicked it, and then admin launched adblock denial, changed forum settings, it was time for something new. If your chosen forum makes you spend more time clicking and waiting than reading, it’s a fail. This site captured my attention because I can bounce in and bounce out in a moments notice, and can read the entirety of all comments on a single page. Also there are some cool settings here where if you hotlink picks, they auto downsize, quick edits, and simple menu for customized avatar. It’s simple, but very effective and meaningful. Best of all, you don’t need a dang login to participate.

  6. Avatar Deplorable Marion says:

    I understand. And also miss Rodger, along with a few others.

    I don’t have that ad issue with the forum. It’s a long technical story why, but it is what it is. I read here a lot, but don’t post much. It was good to see you back in action, and thanks for your first post there.

    There is just so much that appraisers need to address, both with themselves and the regulators. But I’m old and so very, very tired, been fighting this fight too long and have run short of patience lately. Maybe I’ll just write it all down, pass it on, and let it be.

    • Deplorable Baggins Deplorable Baggins says:

      You do what you got to do, and none of us can save the world. Someone already stepped in a long time ago to do that for us.

      I wanted to get a broader feel for the national situation, so I stopped by the forum there. It’s as suspected, but I had hoped it would not be happening. The upward movements in places where appraisers are able to take control, is often resulting in the continued downward pressure for fees, and upward pressure for performance, all to compensate against locations where the appraisers control the business modeling instead of the process clerks. Sort of takes the wind away, to learn that. But what else can I do but give them a pep talk, and hope they understand that such pressure is a result of a failing system, and to; “never give up.”

      Thanks admin for the alteration. I’ll try to upload soon. Would also be nice to see the full control panel in reply box, and not just the primary bottom post box.

  7. Deplorable Baggins Deplorable Baggins says:

    Oh wait! You do have the button! My bad. Right at the bottom. Try again here.

    Only 1 at a time? LOL, but I have so many! Now I need a preview post button. LOL2.

    Uniform Standards of Professional Appraisal Practice

  8. Deplorable Baggins Deplorable Baggins says:

    O.k., I’ve had my fun for today. So great. Yeah, please apply the auto downsize, and possibly a preview post is necessary, since you cannot tell how big the pic will appear via upload, since it does not appear until you officially publish post. Hopefully I could use the preview post to continually cycle in more pics to result in multiple unique uploads per post…  J

    Bird and fish


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Unintended Use & Misleading Appraisal Reports

by Michael Ford time to read: 2 min