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A Little History of Appraisal Organizations and USPAP

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Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
While no special commentary, it is just my own experience I comment on.

The AI in its original state has been around a long time but most recently was a merger of SREA and AIREA (early 90s), and as I understand, AI severed their ties to NAR largely because the NAR wanted veto power over any appraisal related legislative moves by AI.

The roots of AI, NAIFA and ASA go back to as far as the 1930s. NAIFA is now merged with ASA but once was a major group. They killed themselves by lobbying against the $100,000 de minimu and spent millions they didn't have, mortgaged their own building, and ended up running most of the members off due to their horrible management. The Society of Farm Managers & Rural Appraisers, while independent do cooperate with AI (for the record.) ASFRMA was founded in 1929, and likely the oldest of the groups intact both in mission and name.

TAF was created in 1987 as an outgrowth of FIRREA legislation, and is overseen by the Appraisal Subcommittee as a subgroup of FFIEC...and ASC reports annually to congress. TAF is otherwise not a government agency. The subcommittee is and charged with overseeing the states. It is an outgrowth of LENDING reforms but the states basically (for the most part) have required all fee appraisers whether they work for private parties or banks to license, except state employees, etc. Mandatory states means appraisers must license and suffer sanction even if not serving the lending industry, even though the reason for regulating appraisers was explicitly due to bank oversight of appraisals for lending....nothing was said about regulation for private appraisals.

There were 8 original organizations who were members of TAF, including some now defunct. Excluded from membership was the NAREA (which was created in 1966 and still exists) claiming that the membership and its school were a "for profit" company and not eligible. Never mind the defunct National Asso. of Master Appraisers (NAMA) were run by the Deane family and their school was marginally separate from NAMA as the "Lincoln Institute". The real reason NAREA was excluded probably has more to do with Tobias the Cat. George Hatch has alluded to the story recently and to explain, An AI member once submitted to the NAREA an application for designation for his tomcat Tobias and puss in boots was duly recognized as an expert appraiser in the NAREA (well before licensing of course). NAMA was created about 1966, offered classes well received in the central part of the country. But senior members of the Deane family died suddenly and the organization ceased to exist. I think (I may be wrong) George Harrison who run the Columbia Institute (now CoreLogic) was an instructor for NAMA. Curiously, I see there is now a NAA - based in San Antonio where NAMA was and seems to be a suspiciously similar logo...wonder if some old NAMA folks are trying to revive the gist of what was once a well known group.

AI members like to claim that USPAP was actually their own ethics document originally...(now they seem to want to distant themselves from same?) But USPAP was an outgrowth of an ad hoc committee of societies during 1986 and 1987. All societies had ethics documents and many still have their own versions even today. ASA members are not alone in allowing members to apply the IVSC (International Valuation Standards) when working outside the US as well. The IVSC was created about 1994 and some urged adoption of this standard in lieu of USPAP but apparently that was nixed by the PTB. No one mentions it much now.

Outside California and prior to 1992ish there was no licensing. Now, once in law, all states would be required to license appraisers, designations were the only distinguishing mark among appraisers. The (then) AIREA MAI was the "top dog" and often got the requirement of MAI designees only be allowed to do certain properties (such as public facilities.) There was a substantial dust up and blowback from other organizations that prevent the institute from imposing the MAI designation within the IAG and bank lending laws itself. MAI (in my state for instance) was a closely held 'good old boys' network who once deemed there were already "enough" MAIs in NW Arkansas that they simply didn't allow other qualified members to join the club (dominated by Little Rock appraisers). So the NW members packed up and joined the Ozark chapter in Springfield, MO who were happy to confer the designations to them...Now (I understand) Tulsa, Arkansas, and Ozark chapters have merged and are less self-centered on such matters and happy to have any member they can scrounge up. Lowering the bar for MAI is also apparently a real thing as well.

I have taken classes sponsored or cosponsored by AI, NAMA, NAIFA, ASA, NAREA, and ASFMRA. I've taken classes from the Columbia Institute as well as Lincoln Institute. I've taken classes in 5 states, and so which is the "best"? I found most are fundamentally the "best" based upon the instructor. I found little difference in the NAREA Tobias designating classes and the AI classes I've taken. And in the NAMA, ASFMRA, and ASA classes I didn't have to listen to a whining past president defend the decision to pull out of TAF...just saying.

The instructor makes the class. And frankly, a lot of the early NAMA and ASFMRA classes I took were real meat and not much milk. The best income class I took was from a guy who could memorize key punches from a 12C when solving a problem yet he ended up under threat of sanction from a state, and another senior appraiser who worked with him once said he couldn't appraise worth a flip. I guess those who do, do and those who can't, teach is a truism.
 
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I don't know who had more " nothing to do" time on their hands this morning....
The OP or me....
Just Kidding, TS....

I don't know how accurate your recounting of history is but you were able to make a dry subject interesting....:clapping::clapping::clapping:
 
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perhaps you had a bad day or two - it's been known to happen

Nah, sometimes it was just a joke. Other times it would be someone who didn't like what I was saying -one of those guys who sits on the back row and rolls their eyes at me when I tell them that most appraisers are not cutting those corners and the like.

Sometimes I'd bring it up myself by way of full disclosure, which actually bears repeating here on this forum from time to time:

For anyone who thinks some of the things I say resonate with them - that's fine. But that doesn't necessarily mean I'm a good appraiser. Talk is cheap. All that matters when I write a report is what I end up with, not what I gasbag about. It's up to each of us to decide what makes sense to us and to discard the rest.

Nobody puts Baby in the corner and nobody tells appraisers what to think.
 
If Hatch's experience mirrors mine, you get a lot of high marks, a few very low marks and very little in between.
 
I've been told that on several occasions over the years. I mean, directly in reference to me.

There are always exceptions. Take pride in the fact you can do both, and I am sure from what post of yours I read that you can. I was as most know a former Army Pilot. I also was designated (additional school) by them as an Instructor Pilot Ground School/Flight Line. I am not good as a Ground School instructor, I simply lack the Patience for someones laziness or what was more common inability to understand Complex Processes; Fortunately I never taught at entry level US Army Flight School Ft Rucker. Alabama, I was a boots on the ground within an exiting aviation unit. So my so called students were often experienced, sometimes more than me. Kind of like Teaching 7 hr USPAP Update Course to existing appraisers Versus 14 Hour 1st Time Course to a bunch of non-appraisers.

USPAP does not demand perfection. It only demands adherence via State Licensing Boards. We never expected student pilots(newbies) to be perfect, just adherence to the rules in place FAA/US ARMY. Expectations of Existing Active Pilots was much much higher. They already know the fundamentals.

So can those who teach also do! Yes. i do have an exception: College Professors.

I realize i have conflated the two situations but it is all I can draw on from my limited adult life experience.


"There are old pilots and bold pilots, but no old, bold pilots." – E. Hamilton Lee, 1949


 
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do have an exception: College Professors.
There are exceptions there too. :) One of my old professors was a rock interpreting genius and after going into semi retirement he consulted for one of the shale players and explained to them once why the electric log signature was what it was by predicting that the shale would contain a small amount of a rare radioactive mineral which was "fooling" the electric logs. The engineer for the logging company (Schlumberger) disagreed so they sent samples off to CoreLab (not to be confused with CoreLogic) and sure enough there was the offending mineral just as predicted. With that information, the company was able to exploit a lot of zones they thought were unproductive.

As for old bold pilots...an oft repeated claim from my old friend (RIP Jim McVey) who flew Marine fighters during WWII and was shot down twice. He then became a crop duster before landing a job as pilot for a Gulf pipeline subsidiary and later as corporate jet pilot for Gulf Hdq. Jim retired and refused to pilot another plane. He said a cat only has 9 lives and he'd be happy to fly commercial from now on. A promise he kept to his dying day. None of his sons became pilots.
 
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