July 2008 ASC Q&a- Wink Wink Comp Comp

[Bill_FL]

Having read through all of these posts, I don’t get it. What more do you all want USPAP to say? It’s illegal to perform appraisals for free? It’s illegal to perform any appraisal in which your scope of work did not include measuring and walking through all improvements? Good grief, they have said accepting the second assignment based on the value contingency of the first is unethical.

Have you guys stopped to consider why they are not addressing the “things of value” issue you keep bringing up? Ya’ll are appraisers, tell me what something is worth that 99% of the people who do them give away?

I do not know about anyone else, but I think we have plenty of rules and regulations to follow. Yes, there are bad apples everywhere, in every profession – that will never change. But there are just 2 things I would like the regulators to address: First, I would like the ASB to quit using the term “comp check”. As Mr. Hatch put it in one of his first posts on this thread, its an appraisal; Second, the regulators over lending need to address that side with licensing, their own equivalent of USPAP and make value shopping, which is the real issue here, illegal and punishable.

If you think about it, the value shopping issue is key. The lenders who practice it could probably get on a stand and not be guilty of appraiser pressure. I can hear it now: “What pressure, I sent an email to 50 appraisers for a comp check and sent the appraisal order to the highest value that came back. I didn’t tell, ask or threaten him what value to hit. His was the highest value comp check.”

I would rather that issue be addressed then trying to figure out if someone should put in their appraisal that a free desk top appraisal was completed on the subject prior to the “full” appraisal order and what that desk top assignment was worth.

 

[Lee Lansford]

...
Another thing I get sick and tired of hearing about - the fact that TAF has no authority to do this or that. They have the ability and the obligation to write appraisal standards for the good of the public, regardless of whether those standards are enforced or not. That's all I ask - they need to grow a pair of coconuts, get their noses out of the backside of the mortgage industry, learn to write clearly, and do the right thing. A document that is not understood by the people who rely on it is worthless. USPAP is damn near worthless...

Mike, "the problem" it is NOT the clarity of the standards.

I mean, what is more simple and clear than "Do unto others as you would have them do unto you"?

I believe that throughout history (and, if I recall correctly, nearly every religion has some variation of the Golden Rule) this directive has not always been adhered to.

The problem?

People who work to scam the system; people who are ignorant; people who work in what they consider as their own best interest and damn others.

I don't believe that even IF the ASB developed the "perfect" document that all appraisers were to adhere to that this would result in significant change from what we have today.

Lee

 

[Terrel L. Shields]

Question:
[FONT=Times New Roman,Times New Roman]Does USPAP allow appraisers to perform "comp check" assignments for free? [/FONT]
Response:
[FONT=Times New Roman,Times New Roman]Yes. However, the appraiser would have to ensure that receiving a "full" appraisal assignment is not contingent upon the result of the "comp check" assignment. [/FONT]

A cow in a field surrounded by holes with a donkey poking out of each comes to mind for some reason.

The problem with "Comp Checks" all along is that the obtaining of an assignment by its very nature is contingent upon the comp check value.

 

[The Warrior Monk]

You guys really do need to join a union and organize your following. It's the only type of entity that will fight the protectionist battles you guys are seeking. A union would lobby Congress to make comp checks a federal crime; and then the ASB would have to find a way to pretzel twist USPAP to fit that prohibition in. A union would also lobby for set appraisal fees and guaranteed minimum turn times so that your life would be easier. You might be able to get a union rep to sit in with you on those meetings when a lender wants to put you on a do not use list.

The dues will only be a couple hundred bucks a months.

You're wasting your time wishing for TAF to empanel an illiterate activist ASB member who would ignore logic, reasoning and existing law to twist USPAP into something more favorable to your business interests. It's your time to waste though, so have at it.


It's already unethical to accept and perform contingent fee assignments. It always has been. Everybody already knows it's unethical, including all those thousands of appraisers who do it every day. Repeating it over and over to them isn't going to increase that awareness because it's already really high. Rewording those prohibitions isn't going to make any converts. Their problem isn't that they don't know; they just don't care, and rewriting USPAP won't make them care.

If you want to live a life without comp checks I suggest the first thing for you to do is to fire all your MB clients. Wherever there is a comp check problem, there's a MB at the bottom of it. You should be addressing your problem, not just the symptom.

Even after you get rid of comp checks, you're still going to have those damn brokers and their perogatives to deal with. Whether the pressure comes at the beginning, middle or end of the assignment makes no difference, no difference at all. That's what you guys have been missing. You're so busy looking at the one tree you're missing the forest.

Thanks for your comments George.

The funny thing about this discussion is that the ASB and those complaining about the Q&A in fact agree on the subject. Does anyone disagree that a contingent assignment can't be performed?...No.

What is being disagreed about is the ASB didn't overstep their authority and start pandering to what some appraiser's think they ASB should be doing, not what they are allowed to do.

 

[The Warrior Monk]

The problem with "Comp Checks" all along is that the obtaining of an assignment by its very nature is contingent upon the comp check value.

The problem is that there is no uniform definition of "comp check." I'm in the camp with Mr. Shields, that a "comp check" is a contingent assignment. In my experience, I have only heard that term used by MBs and AMCs, and 100% of the time it means "if you guarantee the number I need you get the assignment." I'm not one to twist the terminology so that I can pretend it is something else so as to obtain work from these unethical folks.

 

[George Hatch]

I have a friend who's an appraiser. We sometimes swap referrals, she sends me commercial assignments and I send her residential assignments.

Her husband's parents died a couple years back and the heirs decided to hang onto the properties in the estate. Now they want to divvy the properties up, and one of the brothers is tying to take advantage of the others. He went out and obtained "as-directed" appraisals on some properties, including some commercial properties. The values didn't jibe with my friend's expectations, so she asked me to take a look at them.

If some of you guys had your way, I wouldn't be able to do anything for my friend and peer without writing a report and charging her for it. However, she didn't need a written report, and I am not inclined to charge her just because I put on my appraiser's hat.

I've had similar requests from other appraisers who I don't know and with whom I don't swap referrals.

While we're at it, I engage in appraisal practice and provide free services to a lot of my peers on a regular basis. Appraisers call me up, email me or send me a PM through Wayne's system asking me technical questions and USPAP questions all the time. I would never even dream of charging any of you for those services. But since some of you can't envision a situation where you would ever provide a service for someone without expecting something in return, you seem to want to outlaw that too.

My point is, when you start asking the ASB if USPAP prohibits appraisers from performing free appraisals (regardless of the nomenclature used) and they come back with a "no", that doesn't mean they are condoning or enabling corrupt appraisal practice. Just because some of you define an appraisal as a properly completed 1004/2055 form and nothing else counts doesn't mean the rest of the appraisal profession sees it the same way.

I could support a national appraisal vault or registry. I could support state appraisal boards that enact specifically worded prohibitions that cover specific assignments. I could support a Fannie policy that got drastic about requiring a specified engagement letter and process. But I can't support screwing around with an appraisal standard that is supposed to be uniformly applicable to all appraisal practice just because one niche is having problems with their clients.

Creating a disconnect between the concepts/principles vs. the application of USPAP by saying that certain types of assignments are forbidden because of the potential for abuse will not make USPAP more understandable or more enforceable, it will not stop your clients from trying to get what they want from you, and it won't stop your competition from accomodating with those requests. All that will happen is that the collateral damage that none of you seem to be able to see will infringe and limit the appraisal profession as we try to expand, not reduce, our range of services.

 

[George Hatch]

Contingent engagement and compensation is already specifically prohibited, and every appraisal report includes a certification that the assignment didn't involve either. The certs are very plain, very direct and I doubt there are any appraisers who don't know what they mean. That understanding doesn't stop or impede the "as directed" appraisers from doing their thing.

In my mind, the ASBs mistake in this Q&A was in not redefining the term "comp check" into appraiserspeak at the very beginning of their answer. The term should have been converted into "appraisal" in the first sentence and not repeated thereafter.

 

[George Ellerman]

Don't do comp checks.

 

[Lee Lansford]

...

What is being disagreed about is the ASB didn't overstep their authority and start pandering to what some appraiser's think they ASB should be doing, not what they are allowed to do.

That's pretty much the way that I see it.

I understand the frustration...the anger...the feeling of helplessness...but, the ASB isn't available to stand-over everyone involved in the process to ensure that things are being done the right way.

 

[Fred]

Written with true fire and passion....

Not referencing that post in particular, but that seems to be one of the main problems - too much emotion, not enough sound thinking.