The Appraiser Shortage Myth Part 43

[timd354]

Yours was a good post.
When you dig a little deeper, I'd like to hear your opinion on the following:

Here is an excerpt from the posted documents:

42(f)(2) Presumption of Compliance
1. In general. A creditor and its agent are
presumed to comply with paragraph (f)(1) if
the creditor or its agent meets the conditions
specified in paragraph (f)(2) in determining
the compensation paid to a fee appraiser.
These conditions are not requirements for
compliance but, if met, create a presumption
that the creditor or its agent has complied
with § 1026.42(f)(1). A person may rebut this
presumption with evidence that the amount
of compensation paid to a fee appraiser was
not customary and reasonable for reasons
unrelated to the conditions in paragraph
(f)(2)(i) or (f)(2)(ii). If a creditor or its agent
does not meet one of the non-required
conditions set forth in paragraph (f)(2), the
creditor’s and its agent’s compliance with
paragraph (f)(1) is determined based on all of
the facts and circumstances without a
presumption of either compliance or
violation.​

Now, let me give you my breakdown:

1. In general. A creditor and its agent are
presumed to comply with paragraph (f)(1) if
the creditor or its agent meets the conditions
specified in paragraph (f)(2) in determining
the compensation paid to a fee appraiser.
These conditions are not requirements for
compliance but, if met, create a presumption
that the creditor or its agent has complied
with § 1026.42(f)(1).​

Paragraph (f)(1) in the reference above outlines the requirement to pay independent fee appraisers C&R.
Paragraph (f)(2) is the presumption of compliance. There are two presumptions.
This paragraph reads (according to me) "A creditor is presumed to meet the C&R requirements if the creditor meets the conditions specified.
Those 'conditions' are a number of different requirements including competency, quality, etc, etc. They are outlined in Paragraph 42 (f)(2)(i)(A-F). These are the requirements for the 1st Presumption (the 2nd presumption is the VA fee or other 3rd party surveys). If you meet them, you are presumed to have complied.

Now, next the original excerpt says:

A person may rebut this
presumption with evidence that the amount
of compensation paid to a fee appraiser was
not customary and reasonable for reasons
unrelated to the conditions in paragraph
(f)(2)(i) or (f)(2)(ii).​

A person (any person, I suppose) can rebut presumption for any reason unrelated to the cited conditions. So, I could rebut it by saying, "Hey, I don't care what you guys did under Presumption #1, it isn't VA fees or non-AMC fees, so I'm calling you on it; you are not paying C&R."
The ability to rebut Presumption #1 clearly exists, and a fair reading is one can rebut it for reasons unrelated to the compliance requirements of Presumption #1.

Here's the final part of the excerpt (my bold for emphasis):

If a creditor or its agent
does not meet one of the non-required
conditions set forth in paragraph (f)(2), the
creditor’s and its agent’s compliance with
paragraph (f)(1) is determined based on all of
the facts and circumstances without a
presumption of either compliance or
violation.​

So, I can rebut Presumption #1 for any reason. But the regulation then says if the creditor does not meet one of the non-required* conditions set forth in paragraph (f)(2) [which is the requirements of Presumption #1] then compliance is determined based on all of the facts and circumstances without a presumption of either compliance or violation.
In other words, if rebutted but I've followed all the non-required conditions set forth in paragraph (f)(2), then I am in compliance. It is only when I don't meet those conditions that my case is "determined based on all of the facts and circumstances" and even then, I may be found to be in compliance.
One might ask, "if they are required to show compliance, why are they called 'non-required' in the regulation?"
It seems the answer is clear in the last bolded part of the excerpt above. Note that the second section says determination will be based on the specifics of the case. If the so-called non-required conditions were required, then one couldn't presume compliance or non-compliance; if required and not followed, the lender/AMC would be in non-compliance, period. That isn't what the regulation says. It allows for an individual case to be judged based on its circumstances even if all the 'non-required' conditions weren't followed.
An explanation of this seemingly illogicality may be this: Let's say the lender follows all but one of the non-required conditions in Presumption #1. But, by happenstance, it happens to pay the same rate as the VA schedule. The lender may have tried to claim it was following Presumption #1 but it didn't meet all the non-required conditions. But, by chance, its fees are the same as the VA. I think a complaint that they were not following Presumption #1 would be found to be moot since at the end of the day, wittingly or unwittingly, they were paying what is considered C&R under paragraph (f)(3).

One can rebut Presumption #1 all they want. But if a lender is in compliance with the 1st Presumption's non-required conditions, then compliance is no longer presumed to be in place but is determined to be in place.
Note that the excerpt above does not say, "Regardless if a creditor...does not meet one of the non-required conditions". It says "if a creditor...does not meet one of the non-required conditions."
That is a significant difference that determines if the lender (or its agent, the AMC) process can be evaluated outside of Presumption #1.

Indeed, this is how Louisiana found Coestar in violation of C&R. Coestar did not provide evidence of compliance with all the conditions set forth in paragraph (f)(2). Louisiana was right to charge them on Presumption #1 because they were in non-compliance.
Had Coestar been in compliance with Presumption #1, Louisiana's case would have (a) not been raised or (b) gone nowhere.
LA did not charge Coester "on Presuption 1" - you don't get charged for presumptions. They got charged with violating C&R and were found not to have met the requirements of either presumption 1 or 2, so Coester was not entitiled to the benefit of either presumption.

Anyway, that's my interpretation. As I said, I'd be interested to hear yours.

Here's my 2 cents (plus my comment above):

The way that legal presumptions work is that if the requirements of the presumption are met, then that presumption must be accepted as a fact by the judge/jury. Most legal presumptions are rebuttable, including C&R Presumptions 1 & 2, however, the burden of proof to rebut a presumption that has been met is on the party trying to rebut the presumption. Assuming that all of the requirements or either C&R presumption 1 or presumption 2 (which are actually pretty exhaustive) have been met by an AMC, it is difficult to imagine a scenario under which another party would be able to produce evidence sufficient to overcome either presumption. Think about it this way, if presumption 1 was met, then the AMC produced sufficient evidence that they compensate the fee appraiser in an amount that is reasonably related to recent rates paid for comparable appraisal services performed in the geographic market of the property being appraised. If the AMC has sufficient evidence to show this, then I don't know how anyone could prove that what they paid is not C&R. Regarding presumption 2, if the AMC paid the fees specified by the VA fee schedule or a a government/university survey, I think it is next to impossible to prove that such fees are not C&R.

Keep in mind that what is most important about these presumptions, is that once an AMC has proved compliance with either presumption, the burden of proof is on the complainant to prove that the fees paid are not C&R and considering that determining what is or is not C&R is a very subject determination, meeting that burden of proof is very, very difficult.

 

[hastalavista]

Here's my 2 cents (plus my comment above):

The way that legal presumptions work is that if the requirements of the presumption are met, then that presumption must be accepted as a fact by the judge/jury. Most legal presumptions are rebuttable, including C&R Presumptions 1 & 2, however, the burden of proof to rebut a presumption that has been met is on the party trying to rebut the presumption. Assuming that all of the requirements or either C&R presumption 1 or presumption 2 (which are actually pretty exhaustive) have been met by an AMC, it is difficult to imagine a scenario under which another party would be able to produce evidence sufficient to overcome either presumption. Think about it this way, if presumption 1 was met, then the AMC produced sufficient evidence that they compensate the fee appraiser in an amount that is reasonably related to recent rates paid for comparable appraisal services performed in the geographic market of the property being appraised. If the AMC has sufficient evidence to show this, then I don't know how anyone could prove that what they paid is not C&R. Regarding presumption 2, if the AMC paid the fees specified by the VA fee schedule or a a government/university survey, I think it is next to impossible to prove that such fees are not C&R.

Keep in mind that what is most important about these presumptions, is that once an AMC has proved compliance with either presumption, the burden of proof is on the complainant to prove that the fees paid are not C&R and considering that determining what is or is not C&R is a very subject determination, meeting that burden of proof is very, very difficult.

I agree.

 

[gregb]

Appreciate the comments relating to the LA / ftc case. Anyone have a magic 8 ball to predict the specific outcome of the LA / ftc case?

 

[hastalavista]

Appreciate the comments relating to the LA / ftc case. Anyone have a magic 8 ball to predict the specific outcome of the LA / ftc case?

Yes. Here's what mine says-

 

[djd09]

Strawberry flavored kool aid today.

 

[djd09]

deleted

 

[Deleted member 130081]

You should really try to distinguish and understand what is the actual law/regulation and what is not. What was posted by Denis (and also myself) in this thread was the actual regulation regarding C&R. What was posted by Marion is not the actual regulation, but is interpretation and comments regarding the actual regulation. Before assuming that what is posted by someone who may or may not be a complete fool is true, you would be well served to check the veracity of the post for yourself.

It important to understand and distinguish between the actual regulation and an interpretation and comments published with the regulation, especially before you falsely accuse others of being dishonest by posting only half of a regulation and making yourself look completely ignorant in the process.

Hmm......bite, don't bite, hmmm....f-it Ill bite.

My official response to this post?

You should really shut the **** up.

Often in America today, way too often as far as I am concerned, people start their sentences with the two words "You should...."
My feeling on the matter is people ought to think more about what they should be doing themselves, instead of telling others what they should be doing. Weren't you the one that accused me of usurping King ****? Or was that your bestie?

I would like to point out your post contributed exactly nothing to the issues discussed, not one word. Further, if you had read, or interpreted what I wrote in the way any reasonably literate person would, you would have "distinguished" I am and have been attempting to do exactly what you think I should get right on doing, instead of missing that part and telling me I should go do it. I would say that suggests your powers of reading and comprehension are low, so when you go on to actually write a post that is relevant to the issue a bit later on as you have, attempting to illuminate us simpletons with your vast wisdom and knowledge of legal matters, in a moment of generosity and kindness, I wonder why I would even waste my time and read it (though I did, and will comment on that specifically).

Now that I'm thinking on it, I wonder if I went back and tallied up all your posts in this thread, and counted how many were contributory to the issue and how many were only insults, how many of each would there be? I'm having a hard time remembering anything meaningful you contributed. Maybe it was there, but didn't see it because I had to read through too much BS to get there, and didn't feel like wadding through.

Here's a perspective for you. I have no idea where you came from before appraisal. I came from the construction industry. I built houses and after that I was a utility lineman, you know the guys who strap spikes to their boots and climb up electrical poles. Working construction was an interesting space, it was comprised of both very intelligent and not-so intelligent people (not unlike appraisal I suppose). On a construction site, one was weary to mouth-off to another co-worker in a condescending and insulting way, in fear of the very real possibility they might get their teeth knocked out in response (not to be confused with the regular yelling at each other that went on in the normal course of business). I would guess you would have few teeth if you worked construction, and would probably not even have a job for that matter, as it simply wouldn't "work out". YOU SHOULD stick to appraisal (do you actually do any?), and I hope you are never in a position where your only option is construction.

And finally, are you a lawyer as well? Cause if not, you should shut the **** up when it comes to telling other people they are ignorant.

 

[Deleted member 130081]

Here's my 2 cents (plus my comment above):

The way that legal presumptions work is that if the requirements of the presumption are met, then that presumption must be accepted as a fact by the judge/jury. Most legal presumptions are rebuttable, including C&R Presumptions 1 & 2, however, the burden of proof to rebut a presumption that has been met is on the party trying to rebut the presumption. Assuming that all of the requirements or either C&R presumption 1 or presumption 2 (which are actually pretty exhaustive) have been met by an AMC, it is difficult to imagine a scenario under which another party would be able to produce evidence sufficient to overcome either presumption. Think about it this way, if presumption 1 was met, then the AMC produced sufficient evidence that they compensate the fee appraiser in an amount that is reasonably related to recent rates paid for comparable appraisal services performed in the geographic market of the property being appraised. If the AMC has sufficient evidence to show this, then I don't know how anyone could prove that what they paid is not C&R. Regarding presumption 2, if the AMC paid the fees specified by the VA fee schedule or a a government/university survey, I think it is next to impossible to prove that such fees are not C&R.

Keep in mind that what is most important about these presumptions, is that once an AMC has proved compliance with either presumption, the burden of proof is on the complainant to prove that the fees paid are not C&R and considering that determining what is or is not C&R is a very subject determination, meeting that burden of proof is very, very difficult.

Wow. Somehow despite the utter ignorance you charge me of possessing, I concluded exactly the same thing. I mean, I said it a bit different, but the final result was the same. Go figure.

 

[Deleted member 130081]

Yours was a good post.

When you dig a little deeper, I'd like to hear your opinion on the following:

Here is an excerpt from the posted documents:

42(f)(2) Presumption of Compliance
1. In general. A creditor and its agent are
presumed to comply with paragraph (f)(1) if
the creditor or its agent meets the conditions
specified in paragraph (f)(2) in determining
the compensation paid to a fee appraiser.
These conditions are not requirements for
compliance but, if met, create a presumption
that the creditor or its agent has complied
with § 1026.42(f)(1). A person may rebut this
presumption with evidence that the amount
of compensation paid to a fee appraiser was
not customary and reasonable for reasons
unrelated to the conditions in paragraph
(f)(2)(i) or (f)(2)(ii). If a creditor or its agent
does not meet one of the non-required
conditions set forth in paragraph (f)(2), the
creditor’s and its agent’s compliance with
paragraph (f)(1) is determined based on all of
the facts and circumstances without a
presumption of either compliance or
violation.​

Now, let me give you my breakdown:

1. In general. A creditor and its agent are
presumed to comply with paragraph (f)(1) if
the creditor or its agent meets the conditions
specified in paragraph (f)(2) in determining
the compensation paid to a fee appraiser.
These conditions are not requirements for
compliance but, if met, create a presumption
that the creditor or its agent has complied
with § 1026.42(f)(1).​

Paragraph (f)(1) in the reference above outlines the requirement to pay independent fee appraisers C&R.
Paragraph (f)(2) is the presumption (#1) of compliance. There are two presumptions.
This paragraph reads (according to me) "A creditor is presumed to meet the C&R requirements if the creditor meets the conditions specified."
Those 'conditions' are a number of different requirements including competency, quality, etc, etc. They are outlined in Paragraph 42 (f)(2)(i)(A-F). These are the requirements for the 1st Presumption (the 2nd presumption is the VA fee or other 3rd party surveys). If you meet them, you are presumed to have complied.

Now, next the original excerpt says:

A person may rebut this
presumption with evidence that the amount
of compensation paid to a fee appraiser was
not customary and reasonable for reasons
unrelated to the conditions in paragraph
(f)(2)(i) or (f)(2)(ii).​

A person (any person, I suppose) can rebut presumption for any reason unrelated to the cited conditions. So, I could rebut it by saying, "Hey, I don't care what you guys did under Presumption #1, it isn't VA fees or non-AMC fees, so I'm calling you on it; you are not paying C&R."
The ability to rebut Presumption #1 clearly exists, and a fair reading is one can rebut it for reasons unrelated to the compliance requirements of Presumption #1.

Here's the final part of the excerpt (my bold for emphasis):

If a creditor or its agent
does not meet one of the non-required
conditions set forth in paragraph (f)(2), the
creditor’s and its agent’s compliance with
paragraph (f)(1) is determined based on all of
the facts and circumstances without a
presumption of either compliance or
violation.​

So, I can rebut Presumption #1 for any reason. But the regulation then says if the creditor does not meet one of the non-required* conditions set forth in paragraph (f)(2) [which is the requirements of Presumption #1] then compliance is determined based on all of the facts and circumstances without a presumption of either compliance or violation.
In other words, if rebutted but I've followed all the non-required conditions set forth in paragraph (f)(2), then I am in compliance. It is only when I don't meet those conditions that my case is "determined based on all of the facts and circumstances" and even then, I may be found to be in compliance.
One might ask, "if they are required to show compliance, why are they called 'non-required' in the regulation?"
It seems the answer is clear in the last bolded part of the excerpt above. Note that the second section says determination will be based on the specifics of the case. If the so-called non-required conditions were required, then one couldn't presume compliance or non-compliance; if required and not followed, the lender/AMC would be in non-compliance, period. That isn't what the regulation says. It allows for an individual case to be judged based on its circumstances even if all the 'non-required' conditions weren't followed.
An explanation of this seemingly illogicality may be this: Let's say the lender follows all but one of the non-required conditions in Presumption #1. But, by happenstance, it happens to pay the same rate as the VA schedule. The lender may have tried to claim it was following Presumption #1 but it didn't meet all the non-required conditions. But, by chance, its fees are the same as the VA. I think a complaint that they were not following Presumption #1 would be found to be moot since at the end of the day, wittingly or unwittingly, they were paying what is considered C&R under paragraph (f)(3).

One can rebut Presumption #1 all they want. But if a lender is in compliance with the 1st Presumption's non-required conditions, then compliance is no longer presumed to be in place but is determined to be in place.
Note that the excerpt above does not say, "Regardless if a creditor...does not meet one of the non-required conditions". It says "if a creditor...does not meet one of the non-required conditions."
That is a significant difference that determines if the lender (or its agent, the AMC) process can be evaluated outside of Presumption #1.

Indeed, this is how Louisiana found Coestar in violation of C&R. Coestar did not provide evidence of compliance with all the conditions set forth in paragraph (f)(2). Louisiana was right to charge them on Presumption #1 because they were in non-compliance.
Had Coestar been in compliance with Presumption #1, Louisiana's case would have (a) not been raised or (b) gone nowhere.


Anyway, that's my interpretation. As I said, I'd be interested to hear yours.

My first quicky-response is I don't think it says what you think it does. Also, your explanation was harder to read than the law itself, which is not really like what I have come to expect from your writing (I think it is the subject matter in this case). I am going to read the law from the source and not from just the couple post-its here and I will re-read what your stating, and then get back to you. For now I have to get some work done so If you are truly interested in my opinion, be patient for a day. Thanks.

 

[timd354]

Wow. Somehow despite the utter ignorance you charge me of possessing, I concluded exactly the same thing. I mean, I said it a bit different, but the final result was the same. Go figure.

Learn to read more carefully. I never accused you of being ignorant I stated that you should be careful about believing and re-posting the rants of others who may be fools without verifying the information yourself so that you don't make yourself look ignorant. Obviously it is up to you if you want to follow that advice.