August NCAB meeting

[Tom Hildebrandt]

As one of my first tasks back in the states after being away for three months, I attended the August NCAB meeting.

Bob Ipock also attended, there were two other appraisers in attendance as well as a public citizen who had heard complaints about the NCAB from members of this forum.

Not surprisingly, I was warmly greeted by some of the board members and the staff, and all but ignored by others.

The meeting was typical of many I have attended. Bob, as promised, made his impassioned plea for heavy punative sentencing.

The visiting public member encouraged the board to speak loudly as the board members from time to time speak amongst themselves so as not to be heard by the public.

Four probable cause cases were heard. The investigators freely spoke their opinions of the work product of the hapless appraisers under the gun. In one case, the board staff was recommending disciplinary action because the investigator felt the adjustment for design and appeal was not appropriate and the value was too high. Charles Hinnant GAA, the most recent appointee to the NCAB, asked how the investigator knew what the appropriate adjustment was, and the investigator answered that he had not done an appraisal as if this was a sufficient answer. The inference is also there that the investigator did not know, ie, he had not done sufficient work to form a basis for a credible opinion, required by Standard three, regarding the opinion just rendered. This sublty was overlooked by all the other board members in the there quest for truth and justice, ala the NCAB witchhunt.

In two other instances, the board staff was recommending some action be taken since the report could have been written more clearly. No evidence was submitted that the information contained in the report was misleading to the client or intended user and no information was presented that there was insufficient information in the report for the client to understand the report. In short nothing wrong with this appraisal report, just that the staff did not like it. This is not standards discipline, this is peer review enforced by an incompetent staff.

Finally, one board member, Henry Faircloth asked one investigator whether the appraiser under scrutiny was "a good appraiser". You see, the NCAB has asked its investigators to check other files when they do investigations on a specific complaint. This is so that the investigator can tell the board whether the appraiser is a "good" or "bad" appraiser. Since there were people in the audience who report these things, the investigator ducked answering this question question directly and just stated that he did not see anything wrong with the other files he looked at.

There was during the breaks some grousing by board members that they were upset that the Feds were telling them how to do anything, such as mandatory USPAP classes and standarization of testing. You see, the entire board was to take the ASB USPAP course over this weekend. I was also surprised to hear Ossie Smith state that he wanted to take the USPAP test but he was not allowed to (apparently he lacks the teaching experience). He also felt that if he could not pass it, he ought not to be a regulator. I suggested that at least we could agree that testing of regulators was a good thing, and that a test written for regulators would be a good idea for the AQB to take up. I am not 100% certain that Mr. Smith really wants to take a test, much less one prepared by the "feds" or their equivalent, he is an astute politician and surely recognizes saying you would like to do something looks and sounds good for public consumption especially when you know you have no hope of even remotely having to do so.

At any rate, mostly the board members just wanted to know how long I was going to be around, they seemed relieved that it was only going to be for several months.

Regards

Tom Hildebrandt GAA

PS Still no ruling in my case, I am hoping to know something in the near term, next week or so. I have copies of the transcripts and will be posting from these in the next week or two.

 

[Austin]

Finally, one board member, Henry Faircloth asked one investigator whether the appraiser under scrutiny was "a good appraiser".

REPLY: This is how the NCAB operates. They are intellectually incapable of analyzing the actions of an appraiser, determining if USPAP was violated, or if proper procedures were followed, so they resort to icon thinking. Icon thinking means we decide this appraiser is a bad actor and on that basis can trump up the necessary charges to get his butt. For example as Tom pointed out above:

In one case, the board staff was recommending disciplinary action because the investigator felt the adjustment for design and appeal was not appropriate and the value was too high.
In two other instances, the board staff was recommending some action be taken since the report could have been written more clearly.

The two above quotes clearly show a predisposition to trump up the evidence because they just know this guy is guilty. What does "more clearly mean anyway? More clearly must be a higher state of being clear so apparently there are degrees of clarity. Where is this written in the statute books? Thus the evolution of the term: “NCAB Witch-hunt.” As long as this practice has gone on and as flagrant as it is, it is scary that they are still at it. I thought “the system” would eventually take care of this kind of abuse? Apparently not.

 

[BenLuby]

Austin,
I have a question. Why don't you, Tom and Bob get together and invite some writers/AI members to an NCAB meeting and let them see how things are done?
The squeeky wheel may get the grease, but it sounds like the Board is an even noisier one, or stone cold deaf.
Maybe a little publicity, which will reflect on those running the State, not just the board, will get a bit of action. Just the opinion of a rookie. Good luck.

Tom,
I really enjoy your posts. Hopefully, this will be over soon for you, but, if, as you say, you told the board you'll only be around a few months, I'd say that, since they want you gone, they'll bite their tongue, and let you sit around until you leave.
Some of them may want to string you up, but the career politians involved are probably smart enough to let it lay, and let you leave soon enough so they can get back to business as usual.
As bad as they may want to scream bloody murder, remember this, they also don't want to risk their positions, and going after you again will net even more negative publicity. Watch your rear and good luck.

 

[Tom Hildebrandt]

Ben

Your suggestion to Austin about exposure at board meetings is tried and failed.

The problem is several fold. First there is a distinct lack of apathy by appraisers. Second of the few who care, most are reluctant to speak out. Thirdly, there is a cadre of appraisers, friends of the board if you will, who see nothing wrong with the system.

For example, even Bob Ipock, a regular critic of the board and regular poster on this forum, sees nothing wrong with the investigators freely speaking about others work products without a requirement for a standard three review. In fairness to Bob, his position is that if an appraiser wants a Standard Three review, he should be able to ask for it. He also believes if there is a value issue, the board ought to generate a Standard Three review. He also believes that the investigators sometimes do very poor investigative work and would like those issues fixed. But the fact remians, he believes it is OK for an investigator to freely comment to the other staff and board members regarding the quality of anothers work product outside of our professional standard.

My position is that it may be legal by law or practice in some jurisdiction, for and investigator/appraiser to make such comments. but it sure is unethical.

On this issue, I say that every time an investigator, who is an appraiser, is assigned to investigate another appraisers work product and he expresses an opinion relative to the facts of the case, he needs to develop his opinion in accordance with Standard Three. In my opinion, this entails a workfile with the supporting documentation for his conclusions, and a written report saying specifically what items he finds to be good (and therefore why the complaint should be dismissed) or for those issues he disagrees with, the professional basis for the disagreement. Otherwise, there is no professional record of the why or wherefore.

Investigators who are acting as investigators, not as appraisers, should stick to facts, and not imply wrong doing by innuendo and hearsay.

Until we as a profession can not agree on this simple concept presented in our current standards (USPAP), we will always have rogue boards and witchunt investigations.

Regards

Tom Hildebrandt GAA

 

[Austin]

Tom & Ben: I think the problem is more fundamental than Tom just described. The older I get and the more experience I gain in this business the clearer the picture becomes of the two tiers of the appraisal profession with a widening chasm separating the two. There are two completely different tiers of appraisal mentalities in play. The first and most widely known, that is driving all of the problems, is the residential-FNMA-FHA-VA appraisal mentality, and the second is the commercial appraiser mentality. Very few cases I have seen involve level 2 tier appraisers and the ones like Tom’s involve something else, like revenge for instance for making somebody look bad.
Residential appraisers based on their FNMA-FHA-VA experience have been led down the primrose path without realizing it. It is a false way of thinking. They were taught that if the form calls for an adjustment, you put an adjustment in the form. If the underwriter requests a certain adjustment, you make the adjustment. In other words, a mentality of follow the format and you are correct or don’t follow the format and you are wrong. Any one that doesn’t play the game is a bad appraiser. Problem is, the entire process is a hoax. Residential appraisal methods as presently practiced, in my experience, is total voodoo, but these are the people sitting on these boards driving all of this crap. You can’t legislate economic theory. For example, the sequence of adjustments comes from the market and not from FNMA’s guidebook. Residential appraisers see every problem in terms of an FNMA-FHA-VA guidebook mindset. In the real world, it doesn’t work that way at all, but very few appraisers live in the real world.
I said all of that to make this point. Tom discussed investigators using due process and standard 3 reviews. Sounds good in theory, but here is an illustration of the problem we face. About 25 years ago I ran a tobacco farm on the side. In 1977, agri-comapnies held a big tobacco show in Greenville, NC, that I attended. A large seed company hired the most successful farmer in the state of NC as their representative at this show to talk to farmers about seed varieties. This guy was a real down to earth NC farm boy. I asked him which seed variety he recommended and he told me and why. I then replied that I was confused because my local Federal AG county agent had told me the opposite to which he replied: “Austin; if your county agent knows so damn much about tobacco farming, then what the hell is he doing working for the Federal Government? Why ain’t he out getting rich growing tobacco?” There in lines our dilemma in the state regulatory business in general and the appraisal regulatory business in particular. If a person is competent enough to have an appreciation of the finer points of due process and doing standard 3 reviews, then why the hell would he be working for a state appraisal board? Self-motivated hard driving and intellectual hard chargers don’t generally work for state boards or any kind of committee precisely because they have a high regard for due process or are doing standard 3 reviews for bucks. Most are on these boards for one reason, and that is to get the state pension plan at the earliest possible moment along with the rest of the rocking-chair money crowd. Typical career path to be a state investigator: State policeman for 15 years with 5 years until retirement. Needs a place to get his time in, so lets make him an appraisal investigator. I think they refer to themselves as “public servants.”
The government collectively has become so big and the system so inept for reasons just described that people with high standards will not involve themselves with this kind of crap. The talent pool is so thin that we are down to the dregs and flunkies to serve on these boards. In my opinion, given the nature of the science of appraisal, given the existing tiered situation, the market will solve the problem. The whole residential appraisal process has become irrelevant and will phase out over the next few years, the state boards will be doing what they should have been doing all along, and that is to administer the licensing and certification test and become more a peer mentor than an enforcer. There will always be an appraisal profession but there will be are fewer people and far more technology running the show.
What we are seeing is the end of an old era and the beginning of a new one. Like at the end of the steam age. There are always a few diehards that will believe in the steam engine (or matched pairs and time adjustment) until they go to their grave. In the mean time, just stay out of the path of the stream roller while things work themselves out.

 

[Bob Ipock]

"For example, even Bob Ipock, a regular critic of the board and regular poster on this forum, sees nothing wrong with the investigators freely speaking about others work products without a requirement for a standard three review. In fairness to Bob, his position is that if an appraiser wants a Standard Three review, he should be able to ask for it. He also believes if there is a value issue, the board ought to generate a Standard Three review. He also believes that the investigators sometimes do very poor investigative work and would like those issues fixed. But the fact remians, he believes it is OK for an investigator to freely comment to the other staff and board members regarding the quality of anothers work product outside of our professional standard. "


Sorry Tom, that is NOT how I feel or what I have said. My beef is with BOARD MEMBERS asking value and adjustment questions. The questions should not be asked and the answers should not be given...and yet none of the board members or staff speaks up and says THIS IS INAPPROPRIATE. Why don't they speak up? Does not one board or staff member understand this is wrong?

Put me on record as saying that Standard 3 Reviews should be done at the request of the complaintant, the board or the accused. Anyone of the three parties wants a Standard 3 Review....then it should be done. If a Standard 3 Review is NOT DONE, then both questions from board members as well as answers or statements made by investigators concerning value issues, $ amount adjustments or other silly questions about "good appraisers" or "how does their work look" or how did the rest of their files look" should be off base. Not ONE board member , or staff member will stand up and say that these types of questions are wrong. Either they know it is wrong and refuse to take a stand or they are simply uniformed on the issue.

I guarantee you that MOST appraisers who have had a legitimate, signed complaint filed against them will not ask for a Standard 3 review or anything else other than the bare minimum the investigator is looking at. The plain and simple truth is that most (if not all) of the appriasers who sign Consent Orders and ADMIT GUILT....ARE IN FACT GUILTY. They say they are, they sign a consent order saying they are and I have to believe that they would not do so if they were not in fact guilty. I keep seeing people back for their second and third complaints, signing consent orders and getting suspended sentences and another damn USPAP class. If admit they are guilty...who is to say they are not? Who would know better?

 

[Don Clark]

8)

Bob,

Not all who sign consent agreements think they are guilty. Some are scared out of their wits that if they don't take the lesser penalty of a consent agreement, they will end up with suspension or loss of license. I have attended meetings in Virginia and North Carolina. I have also filed complaints and sat through what we have here in Virginia, a "Fact finding conference". The implication is always made, either sign the consent agreement or the consequences may be even worse. However, Virginia usually does not get into nit picking a report apart, and almost never gets into decisions about adjustments. That is a peer review committee type action and should not be done by a state regulatory agency UNLESS a standard 3 review is done by an appraiser who is competent in that market. We hire appraisers in Virginia as consultants to do just that. North Carolina has the mistaken belief that once they hire an investigator, that person is competent in every part of the state. that is bull s**** and they know it and Tom Hildebrandts court case proves it. A board action should stick to possible violations of USPAP and state regulations, not whether adjustments were done properly, unless there is clear evidence of fraud, incompetence, or criminal action.

Just my thoughts.

Don Clark, IFA

 

[Tom Hildebrandt]

Bob

Thanks for clarifying your position on this.

The major difference between what you vision and mine is that I see the investigator/appraiser having no choice in the matter but to accomplish this specific task in accordance with USPAP ethical and competency standards. You would give them an opt out clause.

But we are talking vision, right now we both agree the board is doing incompetent work, forgetting ethical and legal issues. They may be getting to the right answers in many of the cases, but we do not know for sure. The reason, there is no way of holding them accountable because nothing is reduced to writing or is recorded.

For the rest of the forumites

I have tried to present this topic to the board members on numerous occassions, including a formal petition for rule change. The ethics concept continues to fall on deaf ears. We now have one board member who understands this issue, Charles Hinnant GAA.

Bob is understandably upset because at the last board meeting Charles challenged the investigator on this very issue but did not publically address the short coming of the investigators work product when it became clear that this item would pass as presented by the board staff. In fact my recollection is that Charles made a motion for the case at hand to be dismissed but it was not seconded but I may have my cases confused.

Bob wants change and action now, as do I, and he has a right to expect integrity from the board members. But I see a beginning, and I would argue that given the composition and flavor of the NCAB at the moment, the best course of action is to support, rather than criticize Mr. Hinnant as the one credible voice who understands the issues.

Bob and I have disagreed before on issues, particularly the best way to achieve to goal, but we still both seek the same goal, an improved, honest and fair board.

Regards

Tom Hildebrandt GAA

 

[David C. Johnson]

Fellas,

Some good points have been made. Let me weigh in here as well. As you know, I have been to numerous board meetings and hearings, and have been analyzing this situation for several years.

Here are some Conclusions:

We are going to need outside help in NC with our appraisal board. It's that simple. This is also the case with at least several other state appraisal boards. The premise that governors and state legislative bodies will reliably appoint worthy and qualified members has proven to be very incorrect, because they often do not. It does not take many inappropriate member selections to ruin a board, and even the best of systems and procedures forced on boards packed with dunces will be senselessly abused. Prior to Charles Hinnant RAA, and perhaps Bart Bryson MAI (my past boss, so no objectivity should be expected of me in his case), ALL selections were bad in the past seven or eight years to some degree or another and for one set of reasons or another. This is a fact, and here's just one example of the indisputable proof:

Whether by stupidity or "corruption" (I can assure you it was both), without a single dissent from any board member, our very guilty and unworthy NCAB deputy director was exonerated by this board of all charges in the case that is documented right here in this sub-fourm in the thread titled "Formal Complaint to the Appraisal Institute." Over the years, our board members have participated in many frauds. (For example, they sure would have taken Tom's livelihood recently had they been able -- This is a fact. And they WILL be letting VERY guilty "buddy appraisers" in the same case go unchallenged altogether -- This is a fact.) But the fraud I just cited from this sub-forum is different. It is different because that particular fraud is so simple and clear-cut to understand even for the non-appraiser, and so Publicly Documented in its entirety for all to see. Busted cold. So, the only significant difference these days is that their performance is OPEN fraud since they got away with it again -- even under the circumstances of the public exposure. They are more liberated now without even the pretense of honor or reputations to maintain -- so if anything, they are now even more of a problem. All these board members today, who were board members at that time, which is the majority of them, are frauds. Alternatively, they are idiots. But again, the fact is most are both. Their so called "independent counsel," was just an enabler, his participation in that particular fraud does not excuse any board members. The NC Board of Elections indicates -- in writing and in public -- that the majority of these members bribed their way onto this board. Note that this state agency does not use the term "bribe," but rather uses the term "campaign contributors." (An additional crime of the majority of our members is that of sullying the practice of the legitimate financial supporting of our political system by those who donate -- every bit as outrageous as the phenomena of brazen arsonists joining unsuspecting volunteer fire departments.) I have documented this board of elections' revelation on the website www.boardwatch.org. with the hyperlinked newspaper article assessable via hyperlink from the first hyperlinked section on the homepage.

NOPE, IT'S THE SECOND HYPERLINK ON BOARDWATCH -- MY MISTAKE & MY THANKS TO THE READER WHO POINTED THIS OUT. BUT JUST CLICK THE FOLLOWING FOR THE ARTICLE:

http://boardwatch.org/htmfiles/NewsObserver.htm

From that article we can see that one of our recently "retired" appraisal board members (your welcome, North Carolina, from all of us who assisted) even stated to the reporter that after handing over his cash and requesting a spot, he was handed his NCAB board position -- which he then proceeded to royally rape for two consecutive "terms of service," while placing his longtime friend into the position of NCAB fraudulent deputy director, where he remains on the payroll to this day.

Here is a Solution:

Others and I have also suggested the way this bad appointment issue can be substantially corrected across the country (as MUCH convincing evidence demonstrates that this state is not alone). The majority of college-educated applicants taking the CPA exam DO NOT pass the this exam. The majority of "bad idea board candidates" WILL NOT be passing a rigorous enough ASC "Competency to Enforce USPAP" exam. Period. Whether the inappropriate pre-appointee is the simpe idiot, or the even more destructive "idiot crook," he will be eliminated at this vital check point most of the time. By the way, their bribes DO NOT need to be returned. As documented in that newspaper article, one briber did not subsequently get his board post, for which he made much public noise. His bribe was returned to shut him the hell up. However, he was the exceptional idiot. He was too dim to even understand that if he had successfully made his case, he too would be facing the music for attempted bribery. He was a fool. Many or most bad board members never achieve this level of idiocy.

As someone else pointed out in a previous post months ago, good boards require thoroughbreds, not thorough dunces. Imagine if NASA had relied on such a system for our astronauts...

Regards,

David C. Johnson, Raleigh

I'm evisiting this old post just now to update it for the correct URL to the newspaper article cited in it above. It should be operational now. My thanks to the AppraisersForum member who alerted me to the inoperable link this week!
--dcj (4/3/2005)