<span style='color:darkblue'>Bob,
Well said. I am just now reading your latest post just five minutes prior to posting this one.
The following is an idea you have expressed for many months. I agree. Also, your suggestion about the "payment plan details" you outlined in a previous post would do it for states that appear to have very limited budgets. (Of course, for those who may not be aware of it, we have plenty in NC -- the NCAB has an extra two million dollars in cash on hand.)
"Again, it seems like the easy answer to this SR 3 question is to
allow the defendant, the compaintant or the State call for a SR 3
REVIEW (as in not just an investigation) if they so desire. In most
(not all) of the cases I have seen in a hearing, the defendant was
lucky NOT to be fully reviewed."
Bill-NC,
I thought some of your questions sounded real familiar. Sorry for not responding to your earlier post in this thread on the 13th. I read it before going out of town on Friday, and kinda forgot about it until this recent post of yours. I am not completely sure I am catching the full drift of all your points, but I will make some comments after reciting your post below.
"I read your re-type of portions of Standard 3. Here are my questions?
And David, just so you know, I love playing devil's advocate."
I am not sure what you are referring to with the text: "re-type of portions of Standard 3." Are you speaking of anything I have written in this thread, or another thread? I have not quoted STD-3 here in a while that I can remember.
"1. Put yourself in a regulators position. You are going to do SR3 reviews
on some or all of the complaints. David, I think you are in NC, over near
Raleigh. Can you explain to me how a Raleigh based appraiser can come
to the Asheville area and meet the Geographical competence rule?"
When I worked for an MAI in Tennessee, we were sometimes called to appraise in far reaches of the state (from Nashville). An experienced appraiser can sometimes attain competency very quickly. "Associating with" or just getting some advice from other real estate professions who live in the area is one of the means. There are others. Actually, some believe it is sometimes possible for an appraiser to get a bit to close to be able to read his/her own market as accurately as an "outsider" at times -- I believe I have seen that happen. In fact, it was partly for this concern that we were asked to appraise in such areas (and also sometimes there may have been the concern for bias in some smaller towns with few appraisers, with most also being active brokers and/or developers). For example, if an area or subdivision is selling well, it does not matter that the land use to be the farm of that old weirdo years ago. The market is what we are to emulate, nothing more, nothing less. Checking for planned or likely neighborhood changes (zoning, annexation, road projects, etc.) with the correct municipal departments is important, as well as changes or trends in the local economy. But it certainly can be done, and routinely is done by appraisers all across the country.
But I am missing something here with the point of your question. If an appraisal review is warranted, what are you suggesting should be done to get it completed? Yes, if the investigator is not competent to do such appraising / reviewing, then it appears that someone should be hired to do it who is competent. What is the alternative, Bill-NC? In the case you described, in your previous post, (which I will reprint right below this paragraph), it sure sounds like there may be a problem with the appraisal you describe. But are you suggesting that there need be no STD-3 review in such a case? How would it be determined if there were very substantive and consequential errors, say, effecting the appraised valuation (i.e., an erroneous value), if no legitimate review was conducted? Should it make any difference in the judgment or the sentencing of the appraiser if the value is way wrong, or it appears, on full review, to be just right? Here is your example from your first post in this thread:
"But could you come over here, with a copy of a complaint appraisal, drive
through a subdivision of 150 homes and notice that not one of the comps
is from this subdivision, look in public records and see that there were 35
sales last year in that subdivision, the highest is 35% below the opinion of
value on the form you have in your hand and not suspect that a violation of
USPAP might have occurred?"
Yes, as you say, under the circumstances you describe,
I would very much suspect a problem. However, "suspecting" a problem is not the same as making a case and
proving a problem for a jury (i.e., board members) to base their decision on, or for an appeals court to base their decision on. There may be reasons that singular reliance on sales in the immediate subdivision might constitute an inferior appraisal than would be attained by extending the search for better comparables. If the subject property is twice as large as the largest property (land or improvement, or both), and nearby sales of similarly sized properties exist, perhaps the situation would call for more similar properties for the analysis. What if all other homes that sold in the subdivision are aged split-levels and the subject is a new ranch, while nearby subdivisions include the sale of similar new ranches. Sure there may be a sizable downward adjustment for perhaps being "super-adequate" or overbuilt for the subdivision, but these adjustments may be less than fhe cumulative adjustments required for any of the 35 sales you mentioned. These things would need to be checked out. "Probably guilty," so therefore "officially decreed guilty," don't get it. More and more residential assignments are going to be the difficult assignments. We need protection from investigators and boards who like to "shooting from the hip." Bill-NC, otherwise, maybe the appraiser should just provide the number that everyone expects from a casual observation. It is hard to "go wrong" doing that, but it is not appraising, it's CYA careerism politics.
Bill-NC, by the way, I grew up in Brevard (since the fourth grade, anyway). I use to work for Xerox in Asheville, and later appraised a few residential properties there when I worked in Hendersonville. You probably know or have heard of Bart Bryson, MAI, of Bryson & Associates. He is our second to the newest board member.
"You say that the state should sub out the review? OK, to who? Suppose they
have subbed out the review work to Appraiser Bob. Appraiser Bob has a
complaint filed against him. It goes to court. Bob's atty says, Mr. State
regulator, if Bob is so bad, how come did you send him all that work to
tell you if other peoples work was bad? Wouldnt you only send that kind
of work to appraisers you thought to be good and qualified?"
Bill-NC, first, just a couple of minor "points of order": Bob Ipock is in this thread; he's probably a real good appraiser; but more importantly, you don't want him on your case; so let's make a point of pointing out that he ain't the Bob we are referring to! Next, you wrote the following words: "...if Bob is so bad..." Please remember reviewers actually only make judgment opinions on a specific work product. We are not critiquing the appraiser, but the appraisal. This is a conceptual distinction that may be more important than we sometimes may think. In this case, Bob may be a competent appraiser, but performed a poor appraisal for some reason. Of course, if he performed a fraudulent appraisal, he is a bad appraiser in my book -- but still, keep in mind that as reviewers we do not need to comment on his up bringing, only his appraisals that are under review.
Don't get the wrong idea, Bill-NC. I believe, like Bob Ipock, that the major, or worst case the second biggest problem at the NCAB, is their lack of adequate prosecution! I am not considered by anyone that I know of to be "light on crime" where appraising is concerned. The number or revocations in this state since the beginning of the NCAB can be counted on less than one hand, and you may be aware that the FBI just uncovered the biggest mortgage fraud scheme in the history of the entire country right here in this state.
Some of our board members have disciplinary records (the ones that have not had them expunged), and they judge the rest of us, Right? In fact, statistically speaking, they have a higher offense rate by far than the typical NC appraiser. Now that sure may be something we should be concerned about. Regardless, my suggestion, as part of legal strategy for the prosecution, would be to avoid hiring review appraisers who have particularly long appraisal rapp sheets. For one, the revelation of the chosen reviewer's record could be an embarrassment on appeal.
"2. State law allows for any employee of the state or other form of government,
to be an appraiser and not have to follow USPAP."
No, that is not correct to my knowledge. If you are trying to say that the NCAB's investigators can be appraisers, this is true. However, if they are only acting in the capacity of a fact finding investigator, they may not state their professional opinions as appraisers about the work product of other appraisers (legally or ethically). If they do, or plan to, they must adhere to USPAP, and particularly its STD-3. By the way, "complaining" as it appears to have been characterized in this thread, has improved the NCAB slightly. They now do STD-3 reviews every now and then where they did not before the "complaining."
"The boards are following the law. Perhaps not the one you want them to follow,
but they are following one."
No, that is not correct to my knowledge. They are in clear violation of the law. The NCAB very regularly allows their investigators to go so far as to express value opinions about properties without even having inspected the property, let alone appraised the property -- whether it is in town or not. These properties have been the subjects of official hearing charges at the NCAB where appraisers' livelihoods have been at stake. Does this sound Kosher to you, Bill-NC?
"I may not agree with it either, but that was specifically enacted along with the
appraiser's act."
No, it was not.
"If you want it changed, quit running around saying what about USPAP and get
your legislator to write the bill to change it."
Bill-NC, go to the following URL:
www.boardwatch.org/htmfiles/BoardMemberReportCard.htm
Mr. Smith was trying
real hard to force through a change in the law such that STD-3 would not have to be adhered to in this state. Despite his best and "most creative" efforts, he failed. The law does not need to be changed; I am interested in the NCAB abiding by the existing law.
"3. So, now the law is changed. As a Jurisdiction, I say, excuse me, but I am
claiming Jurisdictional Exception. Before your say it was only intended for a
specific part of USPAP, yes that is what is says. But what it does not do is
define what ..."only that part shall be void..." Ok, as a regulator I say the part
that begins on page one and ends on the last page. It does not say I can not
do that."
Nope, USPAP is very clear on the circumstances the JE can be invoked. This is not one of them. Oh, some currently at the NCAB tried screaming JE, but you do not hear that much anymore. It just does not hold water. Carefully read all of what USPAP has to say about the JE. And also read the Foundation's Question & Answer publications.
"My point here David is that there seem to be a few people on this site who
think they are the one and only authority on USPAP and SR3 reviews."
Name one. Not me. I have never described myself as such. But if such creatures as USPAP Experts do exist, you will likely find some of the very best here on this website -- and at least are some experts who will take their time to discuss it with us. Just to name two, I consider George Hatch and Tom Hildebrandt to be USPAP experts -- they have done their homework in a big way for many years. I suspect many of those at the Foundation -- both past and present -- might agree. No, I get the impression that neither of these guys takes the attitude that they are "the one and only authority on USPAP and SR-3 reviews."
"As stated above, you may not like my arguments, but all are supportable and
defendable. Because they may not agree with you does not make them wrong."
The fact that some of them are factually incorrect does make some of them wrong. But actually, Bill-NC, I am not real sure what your "arguments" are, so, generally, I do not necessarily disagree with you.
Regards,
David C. Johnson</span>
