Does your State Appraiser Board accept anonymous complaints?

[Pat Butler]

I can appreciate anonymity for criminal complaints, but I think it's a bad idea for appraisals. If the complainant is a homeowner then they likely are the source for some of the information in the appraisal. They could have lied to the appraiser about some of the data YET not be available for cross examination by the appraiser. Only one side of the story gets out when the appraiser does not have the right to question the accuser.

Sure, this game of saying that the state is the accuser may be legally correct but doesn't represent the very reality that the REAL accuser is the complainant themselves. And by not allowing the defendant the right to cross examine the REAL accuser you take away some very important rights of the appraiser. What the heck does the state appraisal board know about what happened during the inspection? Nothing, nada, zip.

And let's face it, a very acceptable and legal strategy is for a defendant to also sue the plaintiff. A disgruntled homeowner may have a weak case against an appraiser while that same appraiser may have some issues against the homeowner. Ordinarily, the homeowner might not sue because of the threat of also getting sued. Well, that can't happen when it's anonymous and it stacks the deck in favor of the homeowner.

Take a lending situation where a lender client may owe an appraiser thousands of dollars. Let's say that appraiser wants to sue the lender for collection but decides to wait it out in order to keep them as a client. Now let's say that same lender hassles the appraiser with an anonymous complaint. That appraiser may find himself defending against a client who he otherwise wished he would have sued.

 

[Bob Ipock]

Hard to read. Read it better at:

http://www.ASC.gov/Content/category5/page3.aspx?id=74



I am not sure IL needs anymore complaints.



• Illinois’ complaint investigation and resolution program does not comply with Title
XI and ASC Policy Statement 10 because complaints were not investigated and
resolved in a timely manner.

Title XI requires that States adequately supervise their appraisers. An effective complaint
investigation and resolution process is a critical component of adequate supervision. ASC Policy
Statement 10 provides that complaints should be investigated and resolved within one year of
receipt, absent special documented circumstances.
Although Illinois improved its complaint investigation and resolution program since our
May 2006 field review, the number and percentage of complaints outstanding for more than one
year remained at unacceptable levels. The following chart summarizes complaint statistics:
Field Review Complaints received during the review period.

Complaints outstanding
Complaints outstanding more than 1 year
Nov 2001 866 (~288/year) 25 20
Nov 2004 754 (~251/year) 126 18 (14%)
May 2006 401 (~267/year) 230 71 (30%)
Jun 2007 252 (~232/year) 227 47 (20%)

At the time of this review, Illinois had 227 outstanding complaints, 47 of which had been
open for more than one year. Of those 47 cases, eight had been outstanding for more than two
years, and two for more than three years.

 

[wickedness1]

What the heck does the state appraisal board know about what happened during the inspection? Nothing, nada, zip.

Did the original appraiser produce a misleading report? Are there any major USPAP violations? Those are the questions that (I think) need answered by the boards.

I don't think the boards would even listen to what happened at the inspection, especially if they have an appraisal that is misleading & not explained. (But I could be wrong, never faced the boards but I don't see why that would be relivent if the report is misleading or has USPAP violations)

 

[Pat Butler]

You have no problem with a homeowner who lies about the condition of his furnace to the appraiser then turns around and sues the appraiser for the cost of his furnace? That exact thing happened to a friend of mine who appraised an estate property. The client had lived with his elderly Dad for a fear years prior to his death. The client was very familiar with the property and told the appraiser that the furnace was in perfect working order. The client later proceeded to purchase the property from the estate and turned around and sued the appraiser after the furnace went bad. Don't you think the appraiser should have the right to question this guy face to face? And when the state steps in as the complainant then they are ignorant of the fact that the REAL accuser lied to the appraiser. And don't you think that this guy would be less likely to file an anonymous complaint if he knew that he could be counter-sued?

Or what about someone who isn't even a client of the appraiser who files a complaint? The idea of privity is suddenly thrown out the window when ANYONE can file a complaint against an appraiser and not even have a relationship to that appraiser or the actual appraisal in question. The rights of the accuser and appraiser get thrown totally out of whack with anonymous complaints. And how many appraisers settled for a lesser, or no fee, after being threatend by a disgruntled homeowner who simply didn't like the appraised value and threatend to file an anonymous complaint?

 

[Francois K. Gregoire]

Fannie Mae? I've seen ONE since last April. Fannie likes to whine that ALL of their complaints languish here in Illinois.

What complaints?

Brian,

The folks at Fannie failed to file any complaints with State Regulatory Boards for over ten years. Then, all of a sudden, the decision was made to refer underperforming appraisers to state boards. When the state boards did not act with the speed expected by Fannie, representatives of the GSE regaled audiences with their perception of the ineffectiveness of the appraisal regulatory scheme. After hearing the FREAB pilloried for the third time by one famous Fannie Face, the FREAB directed the Florida Division of Real Estate to conduct some research.

The results:

Report on Fannie Mae Complaints

Fred Clanton reported on the research into the Fannie Mae related complaints. The report was developed in response to Chairman Gregoire’s request to respond to allegations made by Mark Simpson of Fannie Mae. Mr. Simpson identified Florida specifically as being non-responsive to the complaints referred by Fannie Mae.

The outcome of the research indicated the following for the 73 records identified as Fannie Mae complaints:

1 Case pending in Department of Administrative Hearings
2 Cases pending Probable Cause Panel
3 Cases have Administrative Complaints filed
19 Cases have Final Orders issued
7 Cases were Nolle Pross.
15 Cases had warning letters issued
20 Cases were dismissed for various reasons
3 Cases with no action taken due to:
a. 1 Case - the license was revoked prior to receipt of complaint
b. 2 Cases – the names of the subjects were not found as licensees in Florida

Chairman Gregoire asked the Department to issue a press release concerning the efforts of the Division of Real Estate and the Florida Real Estate Appraisal Board to prosecute appraisers referred to it by Fannie Mae. Ms. Dailey asked if the Board should write a letter of rebuttal to Fannie Mae. Mr. Gregoire suggested Fannie Mae would bury it and the public should be made aware. The Board thanked Mr. Clanton for his report.

 

[Lee Lansford]

...

Or what about someone who isn't even a client of the appraiser who files a complaint? The idea of privity is suddenly thrown out the window when ANYONE can file a complaint against an appraiser and not even have a relationship to that appraiser or the actual appraisal in question...

Pat, if I come into possession of a really BAD appraisal, are you saying that because I am not the client I should NOT be entitled to forward that appraisal onto our state's appraiser regulatory agency?

Lee

 

[wickedness1]

You have no problem with a homeowner who lies about the condition of his furnace to the appraiser then turns around and sues the appraiser for the cost of his furnace? That exact thing happened to a friend of mine who appraised an estate property. The client had lived with his elderly Dad for a fear years prior to his death. The client was very familiar with the property and told the appraiser that the furnace was in perfect working order. The client later proceeded to purchase the property from the estate and turned around and sued the appraiser after the furnace went bad.

Unfortunately, scenerios like this are going to occur in every appraisal office across America at some point or another. HO's think appraisers "have deep pockets" & some know that appraisers carry E&O insurance. My bet is the appraiser didn't disclose this conversation on the report.

Don't you think the appraiser should have the right to question this guy face to face? And when the state steps in as the complainant then they are ignorant of the fact that the REAL accuser lied to the appraiser. And don't you think that this guy would be less likely to file an anonymous complaint if he knew that he could be counter-sued?

I don't think the HO's complaint would be given any weight if the original appraiser disclosed the conversation he had regarding the furnace.

Or what about someone who isn't even a client of the appraiser who files a complaint? The idea of privity is suddenly thrown out the window when ANYONE can file a complaint against an appraiser and not even have a relationship to that appraiser or the actual appraisal in question. The rights of the accuser and appraiser get thrown totally out of whack with anonymous complaints.

So it sounds like you feel only the LO who ordered the appraisal, the lender & the second market (Fannie, Feddie, etc.) are the only ones who have a right to complain?

I'm sorry, I just don't agree with you here. We are all professionals & we all have an obligation to uphold this profession & hold its members to the utmost standards. Whether we do that annonymously or not. I am not advocating petty issues, I'm advocating complaining on "real" significant issues. If I thought the other appraiser was "just having a bad day" or had been given wrong data, etc, I would NEVER file a complaint personally. I am talking about true misleading appraisals, making up comps, making up location maps to suit the needs of an LO, non disclosure of raw sewage in basements, misleading a client by stating a house is detached when its really attached, MAJOR issues like those.

And how many appraisers settled for a lesser, or no fee, after being threatend by a disgruntled homeowner who simply didn't like the appraised value and threatend to file an anonymous complaint?

They have then placed themselves into a bias situation b/c fees are NEVER contingent on the outcome of an assignment & the state would be the first to explain that to a disguntled HO.

 

[Pat Butler]

Lee- Yes. It's the same as if though anyone can sue anyone for damage even if there is no privity. Let's say that I see someone steal someone elses car. It would be great if I could sue them for damages but I have no privity in that situation. Our legal system would be a mess if that was allowed. Bad things happen all the time, but it's up to the offended to bring the case.

With your example, that appraiser would likely have a client who won't put up with his bad work, and they can sue or file a complaint. So there is still an outlet to get rid of bad appraisers. But by allowing others who have no privity in the situation to file a complaint, you are stepping on the right of honest appraisers. And the fact that state boards are overloaded with complaints would tend to support my view.

I agree that allowing anyone to file a complaint that it gets rid of bad appraisers. BUT it also puts honest appraisers at risk from ANYONE. Similar to the old parable about setting the standard for guilt high enough so as to not indict honest people. Yet, that means sometimes guilty parties get set free. I want to get all the bad appraisers, but not at the expense of eroding the rights of honest ones.

 

[Lee Lansford]

...
I agree that allowing anyone to file a complaint that it gets rid of bad appraisers. BUT it also puts honest appraisers at risk from ANYONE. Similar to the old parable about setting the standard for guilt high enough so as to not indict honest people. Yet, that means sometimes guilty parties get set free. I want to get all the bad appraisers, but not at the expense of eroding the rights of honest ones.

Pat, I have confidence in our board and the complaint in-take "unit" at our state's regulatory agency to separate the really bad appraisal from those that have less serious (if any) deficiencies. Seriously. I don't believe that we should limit who might be entitled to send what might be an errant appraisal onto the regulatory agency. Just my $.02!

Besides...if only the client could file a complaint...I'm uncertain whether or not many MBs would be anxious to complain about their favorite appraiser! And, further, there are many appraisals--with deficiencies--that pass through the lending system that are not so bad as to be the reason to deny a loan, but are still not in compliance with the USPAP and applicable rules or laws.

Lee

 

[Pat Butler]

It's all an issue of privity. We need some way to limit complaints/lawsuits against parties by only allowing affected parties to file such complaints/lawsuits.

In your MB example- if they have no problem then why bother? In reality, privity HAS been legally established between the appraiser and funding lender which would allow that funding lender to file the appropriate complaint and lawsuit if they were harmed. So our existing laws already connect the dots between the appraiser and various other parties. But why extend that liability to EVERYONE?

But hey, if an individual is satisfied with a bad appraisal then there's no damage. Yet another party can file a complaint. So in effect, the original client can be satisfied with the appraiser while another party claims damages. Something ain't right there.

Gotta eat now... been a long time since I've seen you Lee. Maybe we'll catch up sometime this year...