State of Michigan Reviewer

[Ruben Ramon]

I am helping out a collegue. Someone took out a first mortgage with her appraisal, then they took out a 125% HELOC using a different appraisal, and now are mad because this appraiser friend of mine "put" them in a position that they couldn't get out of.

The State of Michigan hired someone to review her appraisal. His conclusion is that the appraisal that is the subject of the complaint does not have a supportable value conclusion.

The report has a client, intended users, purpose, license number. However, there are about thirty violations of USPAP, and I mean some real basic stuff.

Michigan Law states that the defination of an appraisal is an, "opinion, conclusion, or analysis relating to the value of real property..."

I say this is an appraisal. But my question is this..this guy has been appraising for over 30 years, and has an impressive resume. And he does a LOT of review work for the state. I'm thinking that there is something out there that makes this not an appraisal. But my reading of the law says it is. What are your thoughts, is it an appraisal or not?

 

[Lee Lansford]

...What are your thoughts, is it an appraisal or not?

Maybe.

But maybe it is an appraisal that does not have to comply with the USPAP. Maybe.

Perhaps...just perhaps...Michigan appraisal licensing law has a Juridictional Exception for those who conduct "reviews" for the licensing agency.

Let's wait (I'll bet that it will not take too long!) and see whether someone has a better handle and will offer some comment regarding MI license law.

 

[Ruben Ramon]

There are three excemptions in the appraisal law, and this does not fall under any of those. But your right, I'll wait.

 

[Terrel L. Shields]

The report has a client, intended users, purpose, license number. However, there are about thirty violations of USPAP, and I mean some real basic stuff.

Hire a USPAP instructor to review the review slash appraisal. If the review violates USPAP, then the review is not credible. i would argue that to the board, and if I lost go to court and argue it again to the judge. Don't leave any argument untouched. If there is one common thread in appeals it is that someone appeals with a new argument and the appeals court rules against them saying they should have brought it up in the first place.

Did the second appraisal appraiser also get caught up in it?

When did the original appraiser do the report. In my state, they have to bring this to the board within 3 years of the date of report. The statutes of limitations expires in my state in 3 years as well.

BTW, I think we will see more and more cases like this. Buyers remorse, in over their heads, and frankly expect to be sued if you did many of those subprime or 100% LTV + appraisals.

The highest risk appraisals in America were done at a cut rate for some AMC or low ball Mortgage broker. More the pity. For the risk involved in appraising between 2003 - 2007, I would say the average fee should have been 5 times a regular fee.

 

[Ruben Ramon]

Theres no question that if this is an appraisal, then its horrible, there is no sow, no certification, limited intended users, no effective date, no HBU, no methodology of the value conclusion, no departures (effective date of appraisal was 2004) were mentioned...i could go on and on, but I think you get the picture

edit: No this is the only complaint I know of with this. But there has been at least two other appraisals done since then (they have refinanced twice since then, one HELOC, and another refinance of the first), and the appraisals would have to have come in at similar amounts.

 

[Michigan CG]

............. However, there are about thirty violations of USPAP, and I mean some real basic stuff.........

Maybe we should start with those issues? What are they, and how bad are they?

If there are 30 USPAP violations is it unreasonable for the state to get involved? I would say that the state should get involved with that type of bad reporting.

Educate us more about the violations.

 

[Ruben Ramon]

Without going into much detail, the State's reviewer, as I see it, violated the following standards,
1-2, a, b, d, e, f, g
1-3, a, b
1-4, there was no methodology, only a review of sales comparables. He isn't even a member of the board in the area where this review was done.
1-5 a (only mentioned a prior sale, didn't analyze it
1-6, there is no reconsilation
2-1 b, c
2-2 It isnt clear as to the type of report, i would guess restricted use.
2-3, no certification
3-2 bii, no effective date, iii, no interest mentioned
3-2 c no SOW, d
3-2 g
There are several multiple violations of the standards.

This reviewer is SRA, certified general and has been appraising for decades, and has a VERY impressive resume. I just think that he would have included the basics, at least. It makes me think that there is something that allows him to get away with it. However, even if he doesn't have to follow USPAP, then that makes it unfair. The reviewer isn't being held to the same standard as the original appraiser.

We have considered filing a complaint against the appraiser. But, I wonder about that, because the reviewer knows everybody on the board and all the compliance investigators.

Edit:
But my basic question is, is this review an appraisal?

 

[Ruben Ramon]

I think that there would be some on this forum who can figure out who the review is that I'm talking about. Please don't mention his/her name. I don't want any legal trouble, I just want to get some opinions.

 

[Michigander]

It sounds like you don't have the whole review.

 

[Ruben Ramon]

no we have the whole thing. It was entered as evidence. Its defiinately the whole report.