Illinois Board Issues Warning On Hybrid Appraisals

[George Hatch]

Changing USPAP definitions /verbiage to a more defined boundary of what practices are under the umbrella of appraisal practice would enable the profession to withstand large scale adoption of a "Dumb idea" by a major user such as fannie- or at least prevent them from claiming appraisals done with the dumb idea are s USPAP compliant- because they would not be.

There is almost no upper limit to what the users can ask for. Every one of these lenders remains free to ask for more if they think it's important enough to them to do so. That they're now asking for less in some ways than they used to is a user-driven decision, not an appraisal standards issue. Our limitation is that we cannot allow their minimums to undermine our own minimums.

Telling all the users across all appraisal disciplines they cannot ask for less than X just because you can't reach the one type of use/user by any other means is like using a sledgehammer to drive that thumbtack. Not to mention inherently immoral and unprofessional.

User-driven requirements are exactly that. We're here to work toward the legitimate interests of our uses, not to dictate terms to them.

 

[J Grant]

There is almost no upper limit to what the users can ask for. Telling all the users across all appraisal disciplines they cannot ask for less than X just because you can't reach the one thumbtack with any other tool is like using a sledgehammer to drive that thumbtack. Not to mention inherently immoral and unprofessional.
User-driven requirements are exactly that. We're here to work toward the legitimate interests of our uses, not to dictate terms to them.

Once again, how is changing a USPAP definition telling all users what they can or can not ask for? What it would do is mean if they forgo certain things in an appraisal it is not USPAP compliant.

 

[J Grant]

I think not having appraiser inspect is a lower form of practice and can lead to abuses, though I might personally come to like a having somebody schelp around to inspect......but I'd forgo that lazy enjoyment since I think it;s a stinky idea but might take place so have to be realistic...

 

[George Hatch]

Once again, how is changing a USPAP definition telling all users what they can or can not ask for? What it would do is mean if they forgo certain things in an appraisal it is not USPAP compliant.

USPAP is intended to be applicable to all appraisal practice on the conceptual and principled basis. The individual requirements are expressions of those underlying fundamentals, not arbitrary and unprincipled requirements that stand in isolation to those underlying fundamentals. You can't change any aspect of the front end without those changes being applicable to all the SRs that follow, which after all are but expressions of the front end as it applies to each of those disciplines.

That's why dorking the definition of appraisal practice just so you won't lose market share to the desktops is also going to have unintended consequences in all the other appraisal disciplines, including RE appraisal and review.

Moreover, the ASB isn't supposed to operate off a general election, so it isn't supposed to matter to them what the vote is among appraisers. So if that's what you're thinking you can just put that out of your mind.

 

[Mr Rex]

GOT USPAP? I searched the Glossary of USPAP for the term inspection. It lists pages 19, 44, 51, 79-81, and 289-291. Please read page 19, lines 544-546. Page 44 deals in Mass Appraisals, not relevant. Page 51 deals in personal property, not relevant. Pages 79-81 are an AO and confirm that no personal inspection is required. Lines 32-50 are most pertinent. Pages 289-291 include pertinent FAQs 173 & 174. Please take the time to read and understand these sections before continuing to bloviate incessantly, eating up bandwidth, and using up reasonable peoples time unnecessarily pointing out that you are simply wrong. Don't like Bi-furs? I don't but there is no collusion or obstruction here folks. Just the facts maam.

 

[J Grant]

I get it, we all get it , that USPAP does not require an inspection. Why does that keep being repeated? Nobody is saying USPAP should be changed to require an inspection on all appraisals. The change would be to define an inspection, when it is done for appraisal purpose, as part of appraisal practice.

USPAP is a fact that can be changed since its content has changed through the years and has mechanisms in place to continue changing.

 

[djd09]

once they lock the appraiser to their desk for ever, they will be no better then the avm. actually the avm is faster and cheaper.

 

[chad hampton]

They keep repeating that USPAP doesn't require inspections cause it's all they got. No analysis, no opinion as to whether an unlicensed 3rd party produces a more credible/reliable report, etc. Just the same thing - USPAP doesn't require inspections. Must be printed on the revaa talking point memo. I wonder if the prospect of massive profits once the appraiser is out of the way are on that memo? They probably keep that one quiet.

Let's try to move past the obvious to the next level. Once an inspection is required, who should do it? Since all some of you know is USPAP (the bare minimun), what does USPAP say about that?

What do your state laws say?

Who can a state board sanction due to a poor inspection? They can't tell the public - "We know the person you met at your house that introduced themselves as the appraiser did a poor job, but too bad, we don't have any jurisdiction over these random people that did 50% of your appraisal".

A simple way to get around that problem is to only hire appraisers to do inspections. Not sure who would be against that - you might even be able to convince a few appraisers that as long as it's another licensed appraisal professional doing the field work, then some might get on board? If the folks pushing these things are honest in their claim that the inspection portion of the appraisal doesn't need to be the appraiser that completes the report, then they would be pushing for that. It would be a way to bring new trainees into the profession, get 90% fieldwork in their first 10-20 years, then do desk work as they get older and not able to visit as many properties as they could when they were younger.

Seems like a win-win. Lets see who has a problem with that?

 

[djd09]

USPAP is the problem. not poor donkey appraisers but poor donkey rule writers. they know.

 

[J Grant]

They keep repeating that USPAP doesn't require inspections cause it's all they got. No analysis, no opinion as to whether an unlicensed 3rd party produces a more credible/reliable report, etc. Just the same thing - USPAP doesn't require inspections. Must be printed on the revaa talking point memo. I wonder if the prospect of massive profits once the appraiser is out of the way are on that memo? They probably keep that one quiet.

Let's try to move past the obvious to the next level. Once an inspection is required, who should do it? Since all some of you know is USPAP (the bare minimun), what does USPAP say about that?

What do your state laws say?

Who can a state board sanction due to a poor inspection? They can't tell the public - "We know the person you met at your house that introduced themselves as the appraiser did a poor job, but too bad, we don't have any jurisdiction over these random people that did 50% of your appraisal".

A simple way to get around that problem is to only hire appraisers to do inspections. Not sure who would be against that - you might even be able to convince a few appraisers that as long as it's another licensed appraisal professional doing the field work, then some might get on board? If the folks pushing these things are honest in their claim that the inspection portion of the appraisal doesn't need to be the appraiser that completes the report, then they would be pushing for that. It would be a way to bring new trainees into the profession, get 90% fieldwork in their first 10-20 years, then do desk work as they get older and not able to visit as many properties as they could when they were younger.

Seems like a win-win. Lets see who has a problem with that?

Some appraisers keep bleating that USPAP does not require an inspection. And they are against changing USAP to benefit their own profession. Can't understand it

Moving on, the entity who would have a problem with the common sense solution that an appraiser should inspect for an appraisal is Fannie and Freddie. Their new agenda is to act like a clearinghouse/AMC that grants waivers or decides which appraisal level based on what they hope is a stream of fast cheap rote inspections from non appraiser using an app. Their grand idea. A change in ISPAP verbiage could make that non compliant.

I don't see how we could convince fannie and freddie to hire appraisers only for inspection since clearly they know it is an option. Appraisers are much smaller labor pool than RE agents/others . IT originated with a fannie ( a CEO who has since resigned ) decided appraiser should be at their desks. Agree as you point out the profit motive of affiliated companies who can manage cheap inspections and get volume from staff appraisrers doing desk work influenced agenda as well. Fannie is a lot closer to their profit interests than prudent appraisal practice interests that protect investors.

Unless the public, borrowers/investors/RE agents dislike this or distrust it or pushback on it, or the program when implemented is unpopular with lenders. Will see. You made some excellent points.