AARO Meeting

[Francois K. Gregoire]

Hi All,

Returned this morning on the red-eye from the AARO meeting in the Great Northwest, Seattle, Washington. For the benefit of all, AARO is the Associaiton of Appraiser Regulatory Officials.

The last four days are among the most elightening, educational, entertaining and professionally rewarding ever experienced. In case you're wondering, I met many of the players and lurkers, had great conversations with AQB members and Appraisal Foundation Staffers, discussed the merit of Standard 3 Reviews for investigatory use with at least 15 people (primarily Larry Disney of Kentucky) and any one else that happened to be still in front of me. talked at length with the all three ASC field people as well as the ASC Executive Director, met the lead guy for the GAO audit of the Appraisal Regulatory Scheme and his right hand woman and too many other things to mention.

Just finished a ten our day and a four hour class and running on empty right now. There is much I'd like to discuss, nearly all of it good. Business has backed up, I need sleep and can't remember everything, but you will see some posts on this topic when my desk clears.

 

[David C. Johnson]

Noted, Frank.

Thanks.

dcj

 

[Wally Jones]

Frank,

Welcome home! Look forward to your posts. I like that sound of that "nearly all of it good" synopsis. Catch up on your rest.


Wally

 

[Pamela Crowley (Florida)]

Welcome Home!!!

Missed your post and looking forward to finding out more about what you learned.

Get some sleep!!!

 

[Tom Hildebrandt]

Frank

I have had several discussions with Larry Disney, none of them particularly satisfactory.

His basic position is that I only tell facts, and that the process is fair. Yet he admits that in the process, he often provides comments regarding other appraisers work product. He may be competent, fair and impartial, but if he is not willing to sign a certification, he is not acting ethically.

I look forward to your comments. Did you meet Charles Hinnant GAA? He is the newest appointee to the NCAB and I understand he was present.

Regards

Tom Hildebrandt GAA

 

[Francois K. Gregoire]

Frank

I have had several discussions with Larry Disney, none of them particularly satisfactory.

His basic position is that I only tell facts, and that the process is fair. Yet he admits that in the process, he often provides comments regarding other appraisers work product. He may be competent, fair and impartial, but if he is not willing to sign a certification, he is not acting ethically.

I look forward to your comments. Did you meet Charles Hinnant GAA? He is the newest appointee to the NCAB and I understand he was present.

Regards

Tom Hildebrandt GAA

Hi Tom,

Larry Disney mentioned the two of you had discussed the issue of Standard 3 Reviews for use in an investigation and there was little agreement. The topic of a review for use in an investigation was discussed during an Investigator Training Seminar on Saturday afternoon. Several folks on the panel and in the audience weighed in with their point of view, Larry included. Many states, like Florida, use non-appraiser investigators. Many of these use either contract or volunteer appraisers to complete a review, if necessary, to assist in the investigation and add to the case file. Although I did not keep score, it seemed as though most, if not all, insist the outsided review complies with USPAP, hence Standard 3. Of the states utilizing licensed or certified appraisers as investigators it was a mixed bag of procedures; some were USPAP compliant, some not. In common among all those with no attempt at USPAP compliance was there insistence they concentrated on facts only and did no offer any opinion. Many of these were tripped up when they mentioned their report had statements like inappropriate comparable sales, inappropriate adjustments, unsupported conclusions, etc.

I will concede, they may have a point about the need for USPAP compliance when stating factual errors such as measurement, mis-stated legal, address, sales price, failure to include prior sales, a signed certification or the appraiser holding the wrong license type. However, it appears to be very difficult for an appraiser to abstain from offering an opinion of a respondent's work. Many folks attending, regulators, administrators and attorneys, pointed out the hypocrisy of charging a licensee for a USPAP violation and ignoring the same standard in building the case and prosecution. There may have been one or two states with a specific statute or rule waiving compliance, but many in attendance thought that was a copout as well.

Not sure if many or any minds were changed, but some eyes were opened. The topic was discussed again during an open meeting on Tuesday, but I missed that one. Had to get back to work.

If I'm not mistaken, the issue will be addressed again in an upcoming AARO newsletter. I'll make sure you are informed. I might just stir the pot a bit and try starting a discussion over on the AARO BB. Either check over there once in a while or I'll keep you posted.

Look on the bright side: It is an issue among regulators and it is being discussed. Although it most likely won't happen tomorrow, some boards will ask some questions, re-examine their procedures and make some changes.

 

[Stephen J. Vertin MAI]

Frank:

Welcome back, that is good news. I think when people consider the merts, over the long run, most will come around.

Steve Vertin

 

[Tom Hildebrandt]

Frank

Thanks for the briefing. I am glad to hear that it is a topic of discussion at least.

I do not deny that there are instances when an investigator should be working outside USPAP in an investigation. It should be those instances when it does not involve the work product of an appraiser. Character issues which rise from events outside an appraisal, appraisal review or appraisal consulting assignment would be one example, perhaps non-compliance with CE requirements, etc.

But when an investigator is an appraiser and the complaint involves a work product of an appraiser, I would say it is unethical for any investigator to not comply with Standard Three. This would mean a scope of work that is adequate to resolve the issue. If the charge is mis measuring a house, then the scope of work would probably need to be two tiered. First, remeasure the house and check the report and workfile to see where the appraiser messed up (if in fact he/she did mess up). The scope then might need to be increased to identify the final question, was it a substantive error. Clearly this is a harder issue to resolve as it requires judging the mismeasurement in the context of the overall value assignment.

The final issue that I take with boards who are out "to get the bad appraiser" is that they generally do not want disclosure of their investigations to the respondent. Even if a board does a highly competent and thorough review, if the findings are not presented to the respondent in a timely manner, or worse, just the conclusions are stated, the respondent can not know whether to accept the boards conclusions.

The boards who fight so hard against Standard Three seem to have one thing in common, a desire to keep the basis and reasoning from the respondent. They want their conclusions to be accepted on trust. My case and the STandard Three review prepared by the Deputy Director is a classic example of that. A biased scope of work, a written document so sparse in content that the conclusion are not understood by the respondent, and the work product presented so late that depositions could not be taken. It is such practices that give boards like NCAB a bad reputation.

At any rate, thanks for the update and I appreciate your efforts in this and other matters.

Best Regards

Tom Hildebrandt GAA

 

[Tom Hildebrandt]

Frank

One final point. If the investigator is an appraiser, and he does not sign and date a certification, no matter how detailed his analysis, it is not USPAP compliant. The NCAB investigators submit an unsigned, undated summary sheet of "facts" to the states attorney prior to the probable cause hearing. In my case, this summary sheet was riddled with factual errors, hence the probable cause findings were based on factually incorrect data.

Without a signed certification, there is no accountability under any standard.

Best Regards

Tom Hildebrandt GAA