Anonymous Complaints

[George Hatch]

A little discretion and flexibility in such matters can go a long way. That's why I wouldn't advocate "never" or "always".

We can't expect consumers to be specific, but we should be able to expect it form appraisers.

 

[Webbed Feet]

Mr. Shields,

Any board claiming to not being able to handle the load of complaints coming in has a far more serious problem than the number of complaints coming in. Any move to reduce the number of complaints is tossing the baby out with the bath water. This would be akin to society deciding it can't handle the number of cars illegally running red lights at intersections, so instead of stepping up enforcement society decides to make it legal for all green or silver cars to run red lights so less enforcement is needed. It would violate the public trust to do so, would it not?

Oregon accepts anonymous complaints. It is my understanding if there is a surge in complaints the ACLB uses a volunteer network to separate out the suspected valid from the frivolous complaints. Maybe I misunderstand that. However Oregon does it, bottom line, if my state can do it, Arkansas can do it. In fact, the only comments I have ever heard out of the head administrator of the Oregon ACLB is that the ACLB gets too few complaints, not too many. So as far as I know he is more of a stand of “Bring it on!” than “Oh! We just can't do this!” Your board's primary mission is ENFORCEMENT. Not a mission of seeing if they can be creative in dodging all the enforcement issues they can dodge because they just can't handle it. That does not serve the public interest.

If other controlling agencies or political members of the state higher up are causing the situation, then there is another problem going on that has to be addressed. Perhaps the state needs to loose the federal mandate allowing any mortgage loans to be sold to the secondary mortgage market out of that state. I find this quickly can change the enforcement situation environmental politics in most states. Manipulating the situation in an attempt to redefine the problem to avoid this does not serve the public interest.

The “accuser” in an appraisal board enforcement action is The State. It never has been, should be, or ever should be, considered to be any person filing a complaint. No appraiser that has violated state licensing laws and administrative rules should get a pass just because the complaint was anonymous. The “Accountability” for processing a complaint falls on the state, not the complainer for having made the complaint. If a state cannot handle it's responsibilities, the solution is not the state circumventing state responsibilities by redefining the problem to not be a problem. Certainly, not when doing so violates the public trust in the process.

A second state agency abusing the system is another matter entirely. That one needs to be addressed right up to the governor and legislature of the state. That involves abuse of the public at the hands of a state agency. A stupid act to attempt to prevent the public from being able to obtain representation in condemnation cases literally being committed by an involved state agency transcends the very mission of that agency itself. That being ALL state agencies are in existence to serve the public. Not to circumvent public rights. Causing private contract appraisers to fear working in condemnation cases, due to sneaky actions being taken by a public agency, is a violation of the public trust. That would be like a states attorney general attempting to get any and all lawyers disbarred that dare to defend anybody. However, on the other hand, appraisers cannot be grossly negligent in taking on such cases when unqualified for the job. That also runs up the public bill on each and every case. That also would be unfair to the “public” tax payer. So I would agree this particular matter needs to get booted up the chain of command. As any other action does not serve the public interest.

By the way, I have no idea what your sixth option in your pole has to do with anonymous complaints.

Webbed.

 

[NC Old Guy]

I know several reviewers for different financial institutions. They have indicated they would NOT file any more complaints over bad appraisals (not talking value issues here) since the State of NC stopped taking anonymous complaints. Why? They felt it woud be in "bad" form, as a representative of their employer, to file a complaint that could come back to their customer because it would have an "official" connotation. I've heard the same thing from reviewers in other states. If a state wants to cut their work load, require signatures on all.

The argument sometimes stated is that the appraiser should have the right to meet their accuser. My take? No one is accusing the appraiser of anything. Now, the appraisal however should be able to stand on its own. As the author of that appraisal, you may have to support it but those turning the appraisal in should not be there to testify. What I might think is a major USPAP error, the state investigor may disagree & throw it out. Everyone at that point shoud be done with it. Along that line, why would investigators even have to ask for all files? If the complaint is trivial as can be seen in the first 5 minutes ("I'm complaining because I just know my house is worth more than this & that BBBBAAAAADDDD appraiser just had it in for me").

For the example someone stated earlier, not really a "value" issue if not have adequate number of comps but instead a failure to follow typical appraisal processes & procedures. So hopefully, someone at least looked at page 2 of the report to make that determination. Again, I'd think a quick 5 minute review would reveal whether or not more time should be spend or make the decision to put it in a circular file, so to speak.

 

[Dale Hill]

On a Fannie form revised 3/2005 the top of page 1 calls for an an accurate and adequately supported opinion of value. Cerification #4 on these same forms calls for having adequate market data to complete a reliable sales comaprison analysis. While I agree that the terms noted may not be adequately defined, appraisals completed on these forms, by definition, would logically be able to be investigated on value alone, and certainly be able to be investigated by the state per USPAP whether a credible compliant report was rendered or not. If you sign this form, wouldn't you be attesting to these items? And if it can be shown that the report is not accurate, adequately supported, or has has not demonstrated market data to provide a reliable sales comparison analysis, you have in fact provided a misleading report, and therefore be in violation of USPAP?

 

[Terrel L. Shields]

any complaints submited to the Board which were strictly value based were round filed

as pointed out above most complaints come from people who are not mavens of USPAP. The value issue is never a moot issue.

A state which fields 40 -70 complaints per year which suddenly gets 200 or so might have to expedite the review of such complaints and see if a pattern emerges as to who or why these anonymous complaints have suddenly increased.

I agreed with the Davenports that there is an extraordinary risk for the average appraiser to submit a complaint. Repersussions do happen. And it can appear to be a matter of professional jealousy. If the report is REALLY bad, then I have no quarrel but I'd eschew complaining about anyone's work that is subpar unless I was totally confident it would result in a serious sanction.

 

[George Hatch]

On a Fannie form revised 3/2005 the top of page 1 calls for an an accurate and adequately supported opinion of value. Cerification #4 on these same forms calls for having adequate market data to complete a reliable sales comaprison analysis. While I agree that the terms noted may not be adequately defined, appraisals completed on these forms, by definition, would logically be able to be investigated on value alone, and certainly be able to be investigated by the state per USPAP whether a credible compliant report was rendered or not. If you sign this form, wouldn't you be attesting to these items? And if it can be shown that the report is not accurate, adequately supported, or has has not demonstrated market data to provide a reliable sales comparison analysis, you have in fact provided a misleading report, and therefore be in violation of USPAP?

My problem with Fannie's approach on this is that our professional standards don't use the term "accurate" with respect to opinions and conclusions. By definition, accurate connotes a degree of finality and precision that appraisers generally avoid. The operative term we use is "reasonable".

My other beef with it is that criticizing someone else's opinion is hard to do. Because a value conclusion is an individual's opinion, you almost have to get inside their head and prove an element of intent.

I've done enough reviews to know that an appraiser basically can't come up with an unreasonable value conclusion without distorting some of the facts. It's true that there is some subjectivity with respect to categorizing quality and condition and "most similar" and such, but it's usually not enough to result in big variances between appraisers.

As a reviewer, I look for the big lie. If the subject description checks out and the facts of the sales transactions check out, the only other question that remains is whether those sales can reasonably be considered to be among the most recent and similar sales, as is certified on the Fannie report forms. If they are, and absent any really unreasonable adjustments or some dumb technical error, then the results are going to be reasonable overall. Or, at least not so unreasonable as to warrant a complaint.

So no, I don't think value alone should be a valid basis for a complaint. If a reviewer can't demonstrate how that value conclusion crossed over into unreasonable all we're left with is the "I know a bad appraisal when I see one" gambit. That's a mode of appraisal review that I categorically reject.

 

[Webbed Feet]

On a Fannie form revised 3/2005 the top of page 1 calls for an an accurate and adequately supported opinion of value. Cerification #4 on these same forms calls for having adequate market data to complete a reliable sales comaprison analysis. While I agree that the terms noted may not be adequately defined, appraisals completed on these forms, by definition, would logically be able to be investigated on value alone, and certainly be able to be investigated by the state per USPAP whether a credible compliant report was rendered or not. If you sign this form, wouldn't you be attesting to these items? And if it can be shown that the report is not accurate, adequately supported, or has has not demonstrated market data to provide a reliable sales comparison analysis, you have in fact provided a misleading report, and therefore be in violation of USPAP?

Mr. Hill,

It can't be shown an appraisal report, regarding an opinion, is not accurate. Because that is the pot calling the kettle black in saying this guys opinion is not accurate "in my opinion." The concept doesn't work. Not only that, but Fannie managed to screw the pooch on that one by contradicting her own definition of market value by the use of the word "accurate" like that while demanding a "most probable price" outcome in what she did define versus "accurate" which she failed to define.

Net result is the following is what she gets from me as that stray header sentence is NOT in her defined SOW nor in the certifications.

Accurate - The header of this form contains the following statement. "The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property." Please note that the term "accurate" is not used in USPAP Standards Rule One nor is the usage on this form reasonably defined or explained in the Fannie Mae or Freddie Mac policies. In USPAP, the term "appraisal" is defined as "an opinion of value", which by definition cannot fairly be characterized as accurate or inaccurate. Instead, such opinions are typically characterized as reasonable or unreasonable. USPAP Standard One uses the word "Credible." Additionally, the included definition of "Market Value" requires a determination of an opinion of "The most probable price ..." The words "accurate" and "probable" are contradictions in terminology due to their meanings. For the purposes of this analysis, and with the intention of compliance with USPAP, the use of the word "accurate" on the form is interpreted to mean "Credible.", and it is understood by this appraiser for this assignment to mean "an opinion of market value developed and communicated in conformity with the USPAP."

Webbed.

 

[Ken B]

My problem with Fannie's approach on this is that our professional standards don't use the term "accurate" with respect to opinions and conclusions. By definition, accurate connotes a degree of finality and precision that appraisers generally avoid. The operative term we use is "reasonable".

My other beef with it is that criticizing someone else's opinion is hard to do. Because a value conclusion is an individual's opinion, you almost have to get inside their head and prove an element of intent.

I've done enough reviews to know that an appraiser basically can't come up with an unreasonable value conclusion without distorting some of the facts. It's true that there is some subjectivity with respect to categorizing quality and condition and "most similar" and such, but it's usually not enough to result in big variances between appraisers.

As a reviewer, I look for the big lie. If the subject description checks out and the facts of the sales transactions check out, the only other question that remains is whether those sales can reasonably be considered to be among the most recent and similar sales, as is certified on the Fannie report forms. If they are, and absent any really unreasonable adjustments or some dumb technical error, then the results are going to be reasonable overall. Or, at least not so unreasonable as to warrant a complaint.

So no, I don't think value alone should be a valid basis for a complaint. If a reviewer can't demonstrate how that value conclusion crossed over into unreasonable all we're left with is the "I know a bad appraisal when I see one" gambit. That's a mode of appraisal review that I categorically reject.

Taking this to the next step, is it USPAP compliant for an appraiser to submit an anonymous complaint to a regulating authority (or any other entity) stating that "the value is wrong" without providing a review which meets the requirements of Standard 3. And, since the reporting appraiser's opinion differs from the value reported in the appraisal under review, shouldn't the complaint be accompanied by an appraisal meeting Standards 1 and 2 which supports their opinion of the "correct" value?

It seems to me that an anonymous complaint from a licensed appraiser does not conform with USPAP when the complaint is merely "The value is wrong." Such a complaint falls into the realm of being a "comp check", yes?

 

[Terrel L. Shields]

don't use the term "accurate"

Fannie is creating their own terms and conditions for their own benefit.

I believe that no anonymous complaints should be allowed.
I do believe that someone should be able to submit a report and keep their identify known only to the board. IF the investigator finds that there is serious actionable items to take up, then the confidentiality should remain thru the non-judicial phase of the hearing. BUT at that point, if it is contested to the full board, I do believe that a person should have the right to face their accusor or either face a much less severe punishment (letter of reprimand for instance). If the accusor is unwilling to face the accused, then I don't feel its the boards place to become an advocate for a coward. I do believe that the principle that a person is allowed to face their accusor requires it and if the circumstance is right, I wouldn't hesitate to take it all the way to a court over that issue.

If the complaint is anonymous, then the board ought to know WHO is complaining to at least make some judgment about whether this potentially involves professional jealousy. Taken to the max, any MB who does not like your appraisal can turn you in without reprecussions as a form of punishment EVEN KNOWING THERE ISN'T A GHOST CHANCE OF SANCTION. I have to travel 220 miles to face a board, likely take up 2 days time or more defending myself...that's the easy way to punish the appraiser AND IT HAPPENS ALL THE TIME. One of our forum members was drug 200 miles to the capitol in Mo along with $600 of his attorney's time, to have a MB from California ask for a refund (by letter) of the appraisal fee because it didn't appraise high enough. You get screwed for doing it RIGHT????

Such a complaint falls into the realm of being a "comp check", yes?

NO! Q & A - IF THERE IS NO ASSIGNMENT LETTER...THERE IS NO REPORT. Reading a report does not evoke a requirement to review a report nor do you have a requirement to review any such report prior to sending it in.

The appraisals in question were simply sent in. No anonymous letter stating WHAT Mr. ANON expected or questioned. Reports are simply being SENT IN bare bones. Few have commentary attached. The assumption is that presented as such, are they really COMPLAINTS??? If there is no accusation, then they ought be roundfiled without further ado.

 

[Elliott]

Terrel said, I believe that no anonymous complaints should be allowed.

If its good enough to be in the 6th Amendment of the Bill of Rights, ,,,"to be confronted
with the witnesses against him;"...its good enough for me. Thanks Terrel, sort of,
for reminding me we live in a world of wire taps, anonymous complaints, and
intersection cameras.