Anonymous Complaints

[Bill Wintermyer]

Lee Ann;

I understand your point of view and do not want to spilt hairs over an issue that runs different through the veins of each appraiser.

My question is that if a tip is given to the state about inappropriate and or unethical conduct, and the state finds that the individual or firm is indeed in violation, should that State AG contact the Fed AG to file charges against the lender, since they are the ones responsible for the appraisal and appraiser??

 

[Michael Filip]

I’m not sure what the specifics are in the majority of the anonymous complaints. But I have come across many many reports that anyone reading this post could tell are fraudulent. I’m not talking about infractions or a slight stretch, but values that are off $100,000 - $500,000 (residential properties).

I think I’m in the minority here, but I see nothing wrong with sending in a copy of an appraisal and if the board were to look at it for 5 minutes, they could tell on their own that it’s bad. Many times these reports get killed by underwriting or QC and never fund, but that does not mean that nothing wrong was done.

What are some of the frivolous complaints that are made :question:

 

[Terrel L. Shields]

I certainly concur that it is not brain surgery to find a report that is blantantly worthless....but if so, why would it be a big deal to make the complaint publickly.

It is reports that get sent in like Tom's, that are very complex, that create the worst problems for appraisers who are honest. A simple honest URAR report is a no brainer. A good look at the comps and you likely can spot any fraud. Even if the H & B U box was not checked, or you said it had a septic and it really was hooked to a sewer. Those are or can be "honest" mistakes.

But what about a 55 year old house in an area that is converting to commercial along a secondary roadway. The roadway needs widen, the State wants to take the frontage to do so, the building (used as a professional office now, not a residence) grandfathered from zoning, will lose most of its parking space. The argument is between appraisers for the DOT who say it is worth only what residential land is worth per SF and there is plenty of room left to park a single car. The landowner appraiser argues the entire lot is rendered useless for retail/ office for the lack of parking, and the whole tract should be condemned at commercial land rates.....There are no nearby sales.

Someone (DOT??) turns in the appraiser. The board splits over the issue of Highest and Best Use. Side steps the HBU issue. Turns on the report and nitpicks it. Writes the appraiser up over issues of neighborhood descriptions...failure to provide a 5 year history (is it required or not for a private appraisal?) Puts a 6 mo. probation on appraiser and requires he take USPAP....meanwhile jury awards landowner the value of the property his appraiser suggests.

 

[Bill Wintermyer]

Well said Terrel..........

 

[Tom Hildebrandt]

Michael

I too read lots of reports that I think are bogus. But having that opinion, and proving the same as a matter of fact are two very different issues.

If as a profession we wish for boards to make these judgements, then we should hold the boards to a high standard of disclosure about the reasoning and proof to ensure consistentcy in the enforcement and in their application of standards.

Many boards argue that they do not have the time and money to do these things and many of the same boards have practically no disclosure of their reasoning and behind their judgements. These boards just say trust us, we are doing a good job.

So one step to helping boards out is to have the appraiser complaintant (the person to whom the items are so obvious) to supply the proof. Anonymous complaints put the entire burden of proof on regulatory agencies.

The second part of the equation is the disclosure of the reasoning and some degree of uniformity in the application of standards.

If boards held peer generated complaints to a high standard of proof that was well defined, the frivilous complaint would disappear. In North Carolina, anonymous complaints are accepted. I do not know the percentage of total complaints which are anonymous, but I do know that about 2/3 of complaints of the 240 complaints recieved yearly are dismissed as having no merit, ie, frivilous. If the percentage of anonymous complains is only 20% of the the total complaints, there would be 30 fewer complaints generated. That would allow an investigator to focus on those complaints that had merit, and spend the time to do the things correctly (disclosure to a high standard in writing of the reasoning) taht the board says that it currently does not have time to do competently.

Regards

Tom Hildebrandt GAA

 

[Tom Hildebrandt]

Paul Ness MAI

I believe anonymous complaints can work well in a peer review setting. The AI has a very good program in place.

But the AI is a voluntary setting; their system is intended to be educational and is not punative in the public, legal sense. The AI can only take your designation, they can not stop you from earning a living.

Regulatory agencies are a different beast altogether. They can take your license, and publically find you guilty. This stigma will follow you wherever you go professionally because any time you apply for any occupational or professional license, you must report and explain what happened.

When boards set themselves up in a peer review manner, and have anonymous complaints, and have minimal disclosure, and inconsistent (often conflicting) interpretation of standards, you have a huge potential for abuse.

Removing anonymous complaints is one part of the "'fix" I see for our profession and more than anything, it helps the boards.

You can have anonymous complaints in a licensing agency, but there must be many other safeguards in place as a matter of procedure. Florida is a good example. There needs to be complete segregation between the investigative and prosecution side of the house, there should be a firewall between the informal consent (negotiated settlement) and the final adjudicating authority, all board deliberations must be public and recorded in transcipted form. The rules for board members being recused must be public, and strictly adhered to and not changed on the whimsy of the boards. Finally, the formal evidentiary ruling must be based on a legal standard, not one of peer review.

So one can have anonymous complaints, but it takes a lot of legal structure. Not all boards have such isafeguards in placce.

Regards

Tom Hildebrandt GAA

 

[Steve Owen]

I think it's a good idea. I don't think the "face your accuser" reasoning is valid. If a complaint is filed, the report and reasoning for the complaint must also be included, regardless of whether the person filing the complaint is annonymous or not. If there is nothing wrong with the report, then the complaint should not go anywhere; if someone files a complaint against me, I will either defend my report or own up to my mistake - it doesn't matter who the complainant is or whether I even know who it is. The question is "was there a substantial violation or error?"

I don't believe most appraisers in small markets like mine would ever file a complaint if there was not anonymity.

 

[Tom McDowell]

My market was small and if I saw something that needed a complaint filed I would file the complaint. I am not afraid of expressing my opinion. Before I did file a complaint I would probably call the offending appraiser and get his take on the matter.