Illinois Board Issues Warning On Hybrid Appraisals

[George Hatch]

And therein lies the challenge - the way a law, rule or regulation works is the same way USPAP is structured. They first define the term based on the conduct prior in their definitions sections prior to the sections where they proceed to require or prohibit the conduct. And then from there any conduct that fits the definition will trigger the applicability of those prohibitions or requirements regardless of whatever other nomenclature someone wants to use to confuse the issue.

And, also regardless of whether curbing all the actions that fit those definitions was ever part of the intent of those who sought the change in definitions. Also known as the law of unintended consequences.

This is why these various controversies *always* devolve to the definition, and why the people who are unhappy with how these requirements really work are invariably forced into complaining that these definitions need to be changed in order to meet these narrow circumstances.

A great non-appraisal related example of this demonstrated in the many "sovereign citizens vs the cops" videos. Some SovCit gets their car registration of driver license revoked for whatever reason and then when they get stopped by the cops they claim the laws don't apply to them because they're "traveling" not "driving", and it's a "conveyance" not a "vehicle", and it's their "abellation" not their "name" as a means of telling the cops the laws of the state have no jurisdiction over them.

None of which hinders the enforcement of the applicable laws due to the fact that it doesn't matter what terms people use; all that matters is what the actions are that they're performing or committing.

That's why you're trying to change the definitions at hand - because you can't accomplish what you want any other way.

 

[J Grant]

You knew enough to include the word "analyzing" in the above sentence as the operative term. I don't know why you're having so much difficulty accepting the fact that it is the analysis where the appraising occurs, not the taking of the pic.Well, I do know why, but there's no point in beating that horse.
At any rate, do you plan on developing an entire list of activities that become appraisal practice only when performed during an appraisal? That's going to be some list.

Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser’s certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is $ , as of , which is the date of inspection and the effective date of this appraisal.

The scope of work is inclusive since it involves everything from mundane tasks ( taking a photo or printing a document ) to forming analysis and opinions. Again, you are arguing backwards -
I never advocated to separate out tasks from the SOW and say this one is appraisal practice and this one is not. Clearly some tasks are more mundane but they are part of the whole, that is why there is no "list" , for a holistic SOW

Separating out of a task from the SOW is the fannie move, so they can green light non appraisers to inspect for appraisals and claim USPAP compliance while doing so..

 

[J Grant]

And therein lies the challenge - the way a law, rule or regulation works is the same way USPAP is structured. They first define the term based on the conduct prior in their definitions sections prior to the sections where they proceed to require or prohibit the conduct. And then from there any conduct that fits the definition will trigger the applicability of those prohibitions or requirements regardless of whatever other nomenclature someone wants to use to confuse the issue.

This is why these various controversies *always* devolve to the definition, and why the people who are unhappy with how these requirements really work are invariably forced into complaining that these definitions need to be changed in order to meet these narrow circumstances.

A great non-appraisal related example of this demonstrated in the many "sovereign citizens vs the cops" videos. Some SovCit gets their car registration of driver license revoked for whatever reason and then when they get stopped by the cops they claim the laws don't apply to them because they're "traveling" not "driving", and it's a "conveyance" not a "vehicle", and it's their "abellation" not their "name" as a means of telling the cops the laws of the state have no jurisdiction over them.

None of which hinders the enforcement of the applicable laws due to the fact that it doesn't matter what terms people use; all that matters is what the actions are that they're performing or committing.

That's why you're trying to change the definitions at hand - because you can't accomplish what you want any other way.

Yes, definitions in USPAP change all the time. And it has nothing to do with Soviet citizens and cops...USPAP makes continual changes to its own definitions

 

[George Hatch]

There's a world of difference between clarifying and elaborating vs changing our minds.

Those changes to the definitions are almost invariably made for the purposes of clarifying and removing the types of fuzziness people want to inject into them - such as you are now attempting to do with the meaning of "appraisal practice". They almost never change any aspect of the initial intent of those definitions.

 

[George Hatch]

Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser’s certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is $ , as of , which is the date of inspection and the effective date of this appraisal.

The scope of work is inclusive since it involves everything from mundane tasks ( taking a photo or printing a document ) to forming analysis and opinions. Again, you are arguing backwards -
I never advocated to separate out tasks from the SOW and say this one is appraisal practice and this one is not. Clearly some tasks are more mundane but they are part of the whole, that is why there is no "list" , for a holistic SOW

Separating out of a task from the SOW is the fannie move, so they can green light non appraisers to inspect for appraisals and claim USPAP compliance while doing so..

USPAP has never required personal inspection by the appraiser. Fannie is a user and from an appraisal standards perspective they are entitled to impose - or relax - their extras as they see fit.

Now if you want to argue that Fannie should be prohibited by law from using these desktops for some or all of their transactions then that's a much more focused and direct solution to your problem. I would support that advocacy because we could at least sell that as being in the interests of the public to promote more safe/sound at their level as opposed to less safe/sound.

Never lose sight of the fact that none of the SRs exist as a stand alone laundry list that you can dork on the individual basis for your own interests - they're all expressions and elaborations of the Big Two (ETHICS RULE and COMPETENCY RULE). That's where you have to go in order to change the rules of play among all the SRs

 

[J Grant]

I re read the UARA certifications...full of references to inspection, observed conditions etc. Fannie is changing the certs for the 1004P, form , maybe it will look like this? (lol... ).

Existing 1004:
19. I personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report. If I relied on significant real property appraisal assistance from any individual or individuals in the performance of this appraisal or the preparation of this appraisal report, I have named such individual(s) and disclosed the specific tasks performed in this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in this appraisal report; therefore, any change made to this appraisal is unauthorized and I will take no responsibility for it.

Future 1004P

19. I personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report. If I did not rely on significant real property appraisal assistance since I am not allowed to say that, but somebody did the inspection and I relied on it. I have not named such individual(s) if the client did not pass it along, f they did, I have named them but have no idea who they are . Their specific task performed in this appraisal report is data collection / sometimes called an inspection depending on which word client believes makes it USPAP compliant. I can not certify that any individual so named is qualified to perform the tasks since I have no idea if that is true. I have not authorized anyone to make a change to any item in this appraisal report; therefore, any change made to this appraisal is unauthorized and I will take no responsibility for it.

 

[George Hatch]

Fannie is a user, not an appraisal entity. We should all proceed accordingly. If BankAmerica comes up with some dumb idea that's their dumb idea, not an appraisal standards failure.

It seems to me you should be putting more effort into chipping on Fannie's decision making because that's the origin of your objections to this process.

 

[J Grant]

USPAP has never required personal inspection by the appraiser. Fannie is a user and from an appraisal standards perspective they are entitled to impose - or relax - their extras as they see fit.

Now if you want to argue that Fannie should be prohibited by law from using these desktops for some or all of their transactions then that's a much more focused and direct solution to your problem. I would support that advocacy because we could at least sell that as being in the interests of the public to promote more safe/sound at their level as opposed to less safe/sound.

Never lose sight of the fact that none of the SRs exist as a stand alone laundry list that you can dork on the individual basis for your own interests - they're all expressions and elaborations of the Big Two (ETHICS RULE and COMPETENCY RULE). That's where you have to go in order to change the rules of play among all the SRs

okay, so how do in a practical way would we join forces to advocate Fannie be prohibited by law from using these desktops?

Personally I think that is an extremely difficult challenge and prohibitively expensive with lawyers and makes appaisersl enemies of fannie. Much better to simply change a USPAP definition to include inspection when done for appraisal purpose as appraisal practice (or similar ) That would make fannie;s use of desktops with non appraiser to inspect non USPAP compliant as an appraisal.

 

[J Grant]

Fannie is a user, not an appraisal entity. We should all proceed accordingly. If BankAmerica comes up with some dumb idea that's their dumb idea, not an appraisal standards failure.

It seems to me you should be putting more effort into chipping on Fannie's decision making because that's the origin of your objections to this process.

Changing USPAP definitions /verbiage to a more defined boundary of what practices are under the umbrella of appraisal practice would enable the profession to withstand large scale adoption of a "Dumb idea" by a major user such as fannie- or at least prevent them from claiming appraisals done with the dumb idea are s USPAP compliant- because they would not be.

 

[George Hatch]

See, I knew this was all about your objections to Fannie's program and not about the fundamentals of appraising.

But in answer to your question the one thing the appraisal profession DOES have going for us is that there are legitimate reasons for why Fannie and other lenders shouldn't be reducing their due diligence requirements. No matter what, less is still less when it comes to due diligence. They are increasing their exposure to losses. Leastwise we believe that to be the case.

So I think the way forward is first quantifying how much "more" exposure to loss these 3rd party inspections incur, quantify what the potential losses are, and then use that information to frame this as a cost vs benefits compromise that Fannie can ill afford to gamble with. They and their lenders just can't save enough in appraisal fees to offset even a small percentage of additional losses.

Of course, in order for that pitch to be at all effective it would have to be based in some facts. We *believe* these processes may lead to more losses than the use of the conventional 1004s, but unless/until we prove that to be the case its just our word vs theirs'.

So, just as with an appraisal assignment, problem identification comes first, before the moral judgement or sales pitch. We can't skip that step.

Needless to say, if it turns out that losses aren't significantly higher with this type of assignment then that truth will not work to our economic interests. In which case there's no moral basis for that argument to prevail.