Illinois Appraisal Licensing Act

[BrianMasterson]

Talking about enforcement, my company name is Appraisal Services, Inc. and is properly registered as a corporation in Illinois. There are probably at least a few dozen appraisal companies using some variation of "So-and-So Appraisal Services" in their business name. Many have never properly registered their name as a dba or corporation. The Secretary of State's office requires business names to be legally distinguishable yet fails to enforce their own rules. Furthermore, many of these companies will answer their telephone by saying "Appraisal Services" without including their full company name.

These types of appraisers are the hacks who know nothing about forming a business in Illinois.

Many of those companies are illegally using my corporate name when answering their telephone. The license act/rules includes a section about having to comply with dba laws. Can I file a complaint against each of these companies so that they can be put out of business? All it would take is for your office to call each of these companies and see how they answer their phone (not in conformance with their 'registered' name).

It would take 5 minutes per company and would eliminate the confusion that now exists in the marketplace when clients aren't sure which "Appraisal Services" they placed an order with.

Somehow I don't think that enforcement is ever going to take place.

The State of Illinois has gone overboard on new laws without having the money to support the enforcement of those laws. I do feel bad for Brian as his office is doing the best it can with limited funding. And it doesn't make sense to keep putting the onus on appraisers to have to 'retrieve' hard to get data from clients as compared to putting the onus on the regulated clients to have to provide this information without being asked.

I've already mentioned GLB. How many appraisers really comply with this? Most of my clients are private clients and every one of them receives the proper notice. It would be great if someone could audit appraisers for their compliance in this area, but it isn't going to happen either. So it's just another law that forces us competent appraisers to have more work while the incompetent ones get away with at a competitive advantage.

Let's take site sizes in an appraisal. How many appraisers actually have access to plat maps? I pay thousands of dollars each year for a Sidwell subscription, and prior to that paid one of my assistants to drive to the Assessor's offices to trace the Sidwell book. Yet, I can review appraisals all day long and can claim that the majority of reports have innaccurate site areas. It's even more ridiculous in recent years do to the fact that so many of our counties now have online data at no charge. The typical appraiser doesn't even have the ability to run a CAD program to calculate site areas. Again, can I turn in hundreds of appraisals I've reviewed where the appraiser's site areas are way off? It would be great to retain a competitve advantage over the appraisers who are just winging it with site areas and saving lots of time and money over those of us who carefully calculate site areas in a CAD program using very accurate plat maps.

I get phone calls all the time from prospective clients seeking a fee quote for litigation work. It's no longer a suprise to see that so many of my competitors are only charging $200-300 for an appraisal to be used in court. They don't have the foggiest idea of how much more extensive the SOW needs to be for that sort of work. Many of those appraisers don't even ask any detailed questions from the caller in order to even understand their situation. You can call many appraisers in Illinois and simply ask, "How much do you charge for a divorce appraisal?" and get an instant quote without the appraiser even asking any questions. How do they quote a fee without knowing the SOW? Simple, they couldn't care less. Do you think that might possibly be a source of 'leads' for your office to audit those appraisers?

I understand your frustration but don't see how it relates to the recently enacted Administrative Rules. If XYZ Appraisal Management Company is engaging the appraiser, is keeping the majority of the appraisal fee, is establishing the assignnment conditions, and is taking responsibility for "Quality Control" then why shouldn't they should be named as the client? If ABC Appraisal Services is performing an appraisal service for an agreed upon fee, why shouldn't they disclose the amount they have been compensated? The Administrative Rules establish transparency, nothing more and nothing less. Some will comply, most (unfortunately) will not. The rules are the staring point. Enforcement is another matter. Although Mr. Weaver and the Board have their hands full, to stop making enforcable rules and stop paying attention to the larger issues would be a true disservice to the State and the industry that we all love.

 

[Mile High Trout]

Good points.

Whistleblowers have historically been unprotected though.

Asking appraisers to submit complaints from dealings with their increasingly consolidated mortgage lending clients is a challenging request.

It's difficult to reason as to how quality appraisers would even be present with many of these companies to submit such a complaint. Clearly the industry is increasingly segregated and certain companies pick and choose only discount, quick, and agreeable appraisers. Lack of round robin mandates keep peer complaints nice and low. A small set of preferred appraiser firms are likely not going to turn themselves in, they are getting most of the work.

Forcing the fee disclosure puts the power back where it belongs. In the hands of the consumer. Consumers consider quite a bit when choosing this lending house or that. Those cash out of pocket fees get special attention because when money is paid and not loaned, consumers pay a lot closer attention to where it goes. Word get's around, and that's why fee disclosure will work to the benefit of quality appraisers, and more transparent consumer choices.

 

[BrianMasterson]

That didn't take long:

To whom it may concern,​

XXXXX is aware of Title 68, Chapter VII, Subchapter b, Part 1455, Section
1455.250, which requires an appraiser in Illinois, who is engaged by an AMC, to
obtain documentation that the AMC is a duly authorized agent for the lending
institution, or disclose that the appraisal report may not comply with the Interagency
Appraisal and Evaluation Guidelines.
This letter is to certify that XXXXXXX National Appraisal Services is a duly
authorized agent of the lending institutions we do business with and has the
responsibility and authority of managing the appraisal procurement and delivery
process.​

Sincerely,

 

[Tony V]

That didn't take long:

To whom it may concern,
XXXXX is aware of Title 68, Chapter VII, Subchapter b, Part 1455, Section
1455.250, which requires an appraiser in Illinois, who is engaged by an AMC, to
obtain documentation that the AMC is a duly authorized agent for the lending
institution, or disclose that the appraisal report may not comply with the Interagency
Appraisal and Evaluation Guidelines.
This letter is to certify that XXXXXXX National Appraisal Services is a duly
authorized agent of the lending institutions we do business with and has the
responsibility and authority of managing the appraisal procurement and delivery
process.​

Sincerely,

Thanks for following up on my question Brian...
Now, not to be the B**ch but does that letter cover the reqirement..

"""2) obtain a letter written by the client/authorized agent in which the agent sets forth its level of responsibility and authority. If the client/authorized agent cannot provide the appraiser with documentation identifying them as a duly authorized agent for the financial institution, a statement must be included in the appraisal indicating that the report may not comply with the Interagency Appraisal and Evaluation Guidelines, adopted October 27, 1994 by the federal Office of the Controller of Currency (OCC), Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC) and federal Office of Thrift Supervision (OTS)."""

Even though it does not identify the Financial Institution??

I know that Brian Weaver and Lee are asking for some time to get a grip on the situation, but I am just wondering if a letter that does not identify both parties in the aggreement is considered acceptable..

 

[BrianMasterson]

Extensive discussion at the Appraisal Board meeting today about this very topic. Three members of the "public" were present. It would have been nice to see a larger showing given the importance of the issues being discussed. I would suggest keeping an eye on the IDFPR website as well as the next isuue of the newsletter for clarification and guidance.

 

[Tony V]

Thanks for the update

 

[Mile High Trout]

It would have been nice to see a larger showing given the importance of the issues being discussed.

Well there it is again. Appraisers are a tough crowd to corral up at one time and in one place.

NCAREA is apparently finding increased interest with guest speakers at their monthly meetings. Check out their website. Perhaps a similar approach would get a better return. If you can't get the appraisers to come to you, go to them and tell them in person to show up at a certain date. Deliver the message to the best of the bunch all at once.

If appraisers input is valuable, send out a questionnaire with additional date data to hopefully get them interested. Appraisers feel like their participation just won't matter. What can you say, we're all products of our environment.

 

[William K]

Extensive discussion at the Appraisal Board meeting today about this very topic. Three members of the "public" were present. It would have been nice to see a larger showing given the importance of the issues being discussed. I would suggest keeping an eye on the IDFPR website as well as the next issue of the newsletter for clarification and guidance.

Per Lee
"The meeting (NOTE...public seating is very limited) begins at 9:45 am and is on the 9th floor "

I have been to some past meetings and unfortunately seating is limited at certain venues. Appraisers who recognize the limited public seating tend not to attend. Granted you would think that every appraiser would at least once a year attend a meeting but that would not be physically possible given the size of the meeting venues and number of appraisers in the state.

 

[Brian Weaver]

March's newsletter...we'll cover it all.

 

[Tony Bamert]

so until the March newsletter comes out, should we be following these new rules in our AMC reports or not? I dont want to get in trouble from the state from something that happens during this period of unclear expectations...