Double Trouble - How Risky Are Hybrid Appraisals, And Where Do The Hazards Lurk

[Carnivore]

My state will request your workfile for every complaint they receive. They may very well dismiss the issue regarding SF.

And every time you now try to get work, they don't ask you if you've ever been found guilty. They ask have you ever had a complaint filed against you.

I would be in favor of what you suggest - dismissing frivolous complaints as soon as they come in the door, but that isn't how my state (and most others than I'm aware of) operates.

I've actually suggested to boards that a $100 complaint filing fee be required which will be refunded should the complaint have merit. But that would probably put investigators out of work overnight.

That 100 buck filing fee will never fly because the NCAB is a Consumer protection type of agency funded by the state,

One of the things you didn't mention is the NC complaint and resolution process is always the same on the investigative portion. They always interview face to face with the Appraiser. Additionally they ALSO review the ENTIRE report regardless of the actual complaint allegation. Whats so bad about this is that the public will complain about the weirdest or most trivial item. Its typically motivated by some MV or it is about MV but they throw in; did not like your attitude, blah blah or the way you dressed or you were five minutes late.

 

[Non Sequitur]

The majority of complaints are filed by buyers, sellers, and Realtors. The majority of those complaints are dismissed. However, in a significant number of complaints that have the original reason for the complaint dismissed, often trivial USPAP violations are found (see My Complaints against Complaints in RE Working mag). It's a fishing expedition.

This I agree with. Add to the above, the fact that an appraiser must disclose complaints to E&O and nearly all clients during application/onboarding, this is a mess in the making. But is it the fault of the proposed 1004p or the compliant process in general? Eh, can be debated either way but it is an issue considering the appraisers left standing in the mortgage arena will be fewer with much more volume.

As I mentioned before, in my opinion there will be a bunch of these 1004Ps sent into the state by disgruntled third parties that don't understand what they have.

And those disgruntled parties include fellow appraisers. Per postings in Facebook groups a few 1004p reports have been sent to state boards by disgruntled appraisers, and many are encouraging others to do the same.

 

[Evincere]

This I agree with. Add to the above, the fact that an appraiser must disclose complaints to E&O and nearly all clients during application/onboarding, this is a mess in the making. But is it the fault of the proposed 1004p or the compliant process in general? Eh, can be debated either way but it is an issue considering the appraisers left standing in the mortgage arena will be fewer with much more volume.
And those disgruntled parties include fellow appraisers. Per postings in Facebook groups a few 1004p reports have been sent to state boards by disgruntled appraisers, and many are encouraging others to do the same.

^^^^^
Exxaactly, and or until State Boards change their required investigative policies, the complaints reported for these types of appraisals are going to keep boards busier than ever. These reports will be a gold mine of "lurking hazards"

 

[Terrel L. Shields]

Per postings in Facebook groups a few 1004p reports have been sent to state boards by disgruntled appraisers, and many are encouraging others to do the same.

I don't have a problem with that when the appraiser is 300 miles from the subject and that market and the inspector does not have a license at risk, too.

until State Boards change their required investigative policies

The ASC apparently set some regulations upon the states to make sure each and every complaint is searched to the enth degree. Really. The purpose apparently is to invent a complaint if the consumer hollars. The assumption is that if the consumer is unhappy, regardless the reason, it must be a failure upon the part of the appraiser. So half the sanctions end up being over something that wasn't even complained about by the homeowner or lender who filed the complaint.

 

[TRESinc]

The ASC apparently set some regulations upon the states to make sure each and every complaint is searched to the enth degree. Really. The purpose apparently is to invent a complaint if the consumer hollars. The assumption is that if the consumer is unhappy, regardless the reason, it must be a failure upon the part of the appraiser. So half the sanctions end up being over something that wasn't even complained about by the homeowner or lender who filed the complaint.

would love to see something backing up your opinion being presented as a fact.

 

[Non Sequitur]

I don't have a problem with that when the appraiser is 300 miles from the subject and that market and the inspector does not have a license at risk, too.

The same board that (earlier in the thread) disciplined a retired appraiser is now supposed to protect appraisers against the bifurcated process? Good luck with that. And mark my words, just like other ill advised attempts in the past to use state boards as a stick against others, this isn't going to end the way some appraisers hope.

 

[DWiley]

I don't have a problem with that when the appraiser is 300 miles from the subject and that market and the inspector does not have a license at risk, too.
The ASC apparently set some regulations upon the states to make sure each and every complaint is searched to the enth degree. Really. The purpose apparently is to invent a complaint if the consumer hollars. The assumption is that if the consumer is unhappy, regardless the reason, it must be a failure upon the part of the appraiser. So half the sanctions end up being over something that wasn't even complained about by the homeowner or lender who filed the complaint.

As a former chief investigator/reviewer for a state board, I can confirm that ASC policy does require review of a report for USPAP compliance, regardless of the nature or specifics of the complaint. However, the motivations for that have nothing to do with witch hunts or supporting the consumer. It has to do with the basic requirement for appraisers to follow USPAP. Yes, it is true that the formal charges often have nothing to do with the allegations in the complaint - but they do have to do with USPAP. What is the point of having a standard if we do not enforce it? And, for the record, almost half the reports I examined resulted in no further action after my examination.

 

[Terrel L. Shields]

but they do have to do with USPAP. What is the point of having a standard if we do not enforce it?

USPAP is a fluid document, by some measure - having heard an appraiser brag that he worked contract work for Fannie Mae and he could find something wrong somewhere if pressed to do so...Ironically, Oklahoma stung him first for certifying the completion certificate when the kitchen appliances and cabinets had not been installed, and, then limited his license when he botched a commercial report and he simply quit the biz.

Therefore, "enforcing" USPAP against only those who have had a complaint-frivolous as it may be- can be a punitive punishment based solely upon a complaint that didn't have a thing to do with the infraction. Serendipity then plays the part of picking the "winners" and the "losers". Someone failing to comply for 25 years can skate...until they get a complaint, which then we claim somehow is assuring the "public trust"?

I've heard more than one board member or former board member, claim how much they learned about USPAP compliance once on the board! What the heck kind of statement is that to make? It suggests to me that NOBODY complies with USPAP all the time, not by design - but because the convoluted ever pointlessly changing document is a Greek Mullet... a little fishy at the core but everything else subject to whim of the moment and the reviewer or investigator or Lord only knows what.

If you want to enforce USPAP uniformly, then sample everyone's reports one by one, every year. So hire a reviewer to review all the work of an individual and by mid-year the last appraiser will have been sanctioned and then we can talk about an "appraiser shortage" because there won't be a ****** one of us left. USPAP is an over-reaching document, always has been, always will be. Survivors survive by luck, not skill. And as crumby as the braggart above was, I bet he was right. Someone somewhere can nitpick a report and my conclusion that is a failure of the document, not the appraiser. Rules are black and rules are white but appraisers often have to deal in shades of gray. And as for USPAP, I bet we could go back to the 1992 document and basically all of us would produce the same fundamental work. Almost all the changes that have been made have, to some degree, been created and then unraveled. And we call that a "standard"?

 

[George Hatch]

I've reviewed a lot of appraisal reports that met the minimums of USPAP. So I don't believe in the "it's impossible to comply" argument.

What I do believe is that there are reviewers (and appraisers) out there who conflate their own personal preferences as being uniformly applicable to everyone else's work. That's not a "USPAP can't be understood" problem, it's a "reviewer can't be bothered to learn what they're supposed to do" problem.

I'll say one more thing: not all USPAP violations warrant discipline, either. You discipline someone for evidence of them acting in bad faith, not for making an accidental error of omission or commission. Again, at the state board level that's not a USPAP problem, it's a governance problem involving gov't officials not using a level of discretion that is consistent with the appropriate role of a state licensing board. Me choosing to execute you with a bullet to the back of your skull because you didn't summarize your HBU analysis isn't a USPAP problem, it's a governance problem.

 

[DWiley]

USPAP is a fluid document, by some measure - having heard an appraiser brag that he worked contract work for Fannie Mae and he could find something wrong somewhere if pressed to do so...Ironically, Oklahoma stung him first for certifying the completion certificate when the kitchen appliances and cabinets had not been installed, and, then limited his license when he botched a commercial report and he simply quit the biz.

Therefore, "enforcing" USPAP against only those who have had a complaint-frivolous as it may be- can be a punitive punishment based solely upon a complaint that didn't have a thing to do with the infraction. Serendipity then plays the part of picking the "winners" and the "losers". Someone failing to comply for 25 years can skate...until they get a complaint, which then we claim somehow is assuring the "public trust"?

I've heard more than one board member or former board member, claim how much they learned about USPAP compliance once on the board! What the heck kind of statement is that to make? It suggests to me that NOBODY complies with USPAP all the time, not by design - but because the convoluted ever pointlessly changing document is a Greek Mullet... a little fishy at the core but everything else subject to whim of the moment and the reviewer or investigator or Lord only knows what.

If you want to enforce USPAP uniformly, then sample everyone's reports one by one, every year. So hire a reviewer to review all the work of an individual and by mid-year the last appraiser will have been sanctioned and then we can talk about an "appraiser shortage" because there won't be a ****** one of us left. USPAP is an over-reaching document, always has been, always will be. Survivors survive by luck, not skill. And as crumby as the braggart above was, I bet he was right. Someone somewhere can nitpick a report and my conclusion that is a failure of the document, not the appraiser. Rules are black and rules are white but appraisers often have to deal in shades of gray. And as for USPAP, I bet we could go back to the 1992 document and basically all of us would produce the same fundamental work. Almost all the changes that have been made have, to some degree, been created and then unraveled. And we call that a "standard"?

The basic problem with USPAP is that most who say they are complying with it, and, frankly, many charged with enforcing it, have never actually read it - much less studied it. Couple that with the fact that many residential appraisers have never read the SOW, assumptions and certifications that they sign, and you have the source of the majority of issues I have dealt with over the past 30 years.