Is It USPAP Violation or Reviewer's Opinion

[George Hatch]

You are basically proving my point by reading into our standards some extras which don't exist therein.

When you're doing your own appraisal assignment then you can add whatever you want, and props to you for going the extra mile. But the role of the reviewer is different.

Suffice it to say that if I'm reviewing your work then you will want me to stick to the actual minimums in my critique and refrain from using my own preferences in critiquing your work. The main reason for that coming down to basic fairness. My extras were never part of your assignment to begin with and its grossly unfair for me to move the goalpost on you after the fact. It's fine for me to say that you added your own extras and that isn't a problem, but as far as us getting into a catfight over style or preferences, it's unprofessional for a reviewer to even touch off such an exchange. IMO

 

[RCA]

You are basically proving my point by reading into our standards some extras which don't exist therein.

When you're doing your own appraisal assignment then you can add whatever you want, and props to you for going the extra mile. But the role of the reviewer is different.

Suffice it to say that if I'm reviewing your work then you will want me to stick to the actual minimums in my critique and refrain from using my own preferences in critiquing your work. The main reason for that coming down to basic fairness. My extras were never part of your assignment to begin with and its grossly unfair for me to move the goalpost on you after the fact. It's fine for me to say that you added your own extras and that isn't a problem, but as far as us getting into a catfight over style or preferences, it's unprofessional for a reviewer to even touch off such an exchange. IMO

Assuming you are referring to my prior post, which was a reply to the second post of the forum which was a reply to the OP, which was about the Oklahoma Real Estate Appraiser Board sanctioning an appraiser about certain things that TS doesn't think are important.

This had nothing to do with reviewers.

It's important to maintain a professional tone in our discussions. Your last post seems to be veering towards obfuscation.

 

[George Hatch]

The actions of the state board "review" process fit the definition of an appraisal review, which is what we have been talking about in this thread. I used an analogy that referenced you, but only as a means of illustration. Nevertheless this thread isn't about you. And neither are the themes we've been discussing in this thread.

One of the big controversies we had on this forum 20 years ago about was this same issue - people acting as reviewers but cutting corners in their process and extrapolating their own off-label preferences onto everyone else's work. "Not considering/adjusting for a circular driveway is a violation" type of thing.


Reviewer overreach is bad when the individual is performing a garden variety review for a lender but (arguably) 10x worse when the outcome is used to curtail the appraiser's licensing status. Then as now, I have advocated that the state boards role includes the moral responsibility to stick strictly to the requirements as explicitly stated and refrain from going any further than that. The burden of proof for demonstrating compliance or non-compliance is on the state, not the licensee.

 

[RCA]

The actions of the state board "review" process fit the definition of an appraisal review, which is what we've been talking about in this thread. I used an analogy that referenced you as a means of illustration. Nevertheless this thread isn't actually about you and neither are the themes I've been discussing in this thread.

Of course, the state board is doing a reviiew, a special kind of review, where they can follow up with sanctions. - That is not the issue. Terrell's post is about them applying sanctions on the appraiser based on issues that he considered baseless. You are in the habit, of steering arguments towards your perpetual insistence of the importance of "client requirements." You are crazy. Who is the client of the Oklahoma Board of Real Estate Appraisers?

Besides steering nearly everything that comes your way to an issue of "client requirements," - you are forever engaging in obfuscation - assuming such steering is intentional. Or alternatively, you are unaware of your bias and don't know what you are doing. And so, in any case, I feel obliged to point out your bias as a matter of record occasionally. Part of your intentional obfuscation, by the way, is trying to convince the forum this has something to do with my "personal" interests. - No, not at all. It is just my "super-ego" at play here, a question of right vs wrong and terrible me slitting the throat of the rule violator whenever the opportunity arises. And even this doesn't come under so-called personal interests because I don't trust my own super-ego 100% correct on issues. Still, all things being equal, it is, I believe, at least as good as someone else's opinions and will let it have its way for the sake of expressing a different opinion, which nonetheless has value. And admittedly, this is getting too complicated...

 

[George Hatch]

The prime directive of our appraisal standards is oriented to "meaningful and not misleading to intended users". (I usually refer to it in terms of the users, not in terms of the clients even though they're sometimes the same party). Our standards are not oriented to some external benchmark.

You have strongly disagreed with this intended user/intended use orientation in our appraisal standards, and you have your reasons. But that doesn't alter the point that what exists now didn't come about as an accident or a mistake, even if some people think portions of it are obsolete. Moreover, the existing standard and the existing laws/regulatory structure also came about as the result of a process, not as some type of immaculate conception. As a matter of law and regulation the appraisal boards can only enforce state law and regulation (one of which requires compliance with USPAP). They don't have the authority to act on their own opinions outside of those requirements. Not legitimately, anyway. In governance we commonly expect that the ends don't justify the means.

Here's one reason why: IRL it is the users who form the opinions of the credibility of the workproduct and whether or not to use that workproduct in their decision making. If *in their opinion* they don't think an appraisal is sufficiently credible they probably won't use it; and if the credibility gap between the appraisal and their expectations per their policies is too great they will also sometimes cut the appraiser off altogether. So it DOES matter what the intended users think. Right down to their choice to use appraisals or use AVMs instead, and right down to the fees they're willing to pay in exchange for what they think they're getting for those fees. There ain't nothing abstract about any of that.

The current migration away from using the conventional 1004 is being driven in part by the users opinions WRT the utility of an AVM or BPO or Hybrid or Desktop SOW when compared to the conventional 1004. They're considering the question: "is the value-add of an appraiser's personal inspection worth paying $100 more and waiting for another couple days?". For some assignments the users have decided the answer to that question is "yes" and for other assignments their answer - driven by their opinions of it all - are "no". That much is self-evident.


A lender's appraisal policy outlines the supplemental requirements for those assignments, above and beyond the USPAP minimums. That's why its the appraiser's obligation to be familiar with those supplementals and for them to meet those supplementals in their assignments. That's one way of establishing and maintaining credibility to those users. Which to reiterate is still the primary orientation of our appraisal standards in their current and historical form. That's the operating environment the appraiser was supposed to be operating in during their assignment, and insofar as opining on the quality of the workproduct that's the only fair basis for a reviewer to use in performing their review.

If an appraiser performed an assignment for BofA then that's the rulebook in play. It becomes unfair for a reviewer to base their opinion of errors and deficiencies on the appraisal policies of Wells instead of the policies of BofA. That's why the first question I asked was what rulebook - if any - was in play for the appraiser's assignment?

 

[RCA]

The prime directive of our appraisal standards is oriented to "meaningful and not misleading to intended users". (I usually refer to it in terms of the users, not in terms of the clients even though they're sometimes the same party). Our standards are not oriented to some external benchmark.

Well, you have to take this with a grain of salt. These sorts of rather ambiguous issues, I like to run by Claude or ChagGPT, to get an unbiased opinion that is based on a ton of evidence it has perused. SO HERE WE GO:

Me: "What does it mean to say that some report is "meaningful" to the user?"

Claude: "When a report is described as "meaningful" to the user, it typically implies that the information presented is:

1. Relevant: The content directly addresses the user's needs, questions, or objectives.
2. Actionable: The insights provided can be used to make decisions or take specific actions.
3. Understandable: The information is presented in a way that is clear and easy for the user to comprehend.
4. Valuable: The report provides insights or data that are important or useful to the user's goals or responsibilities.
5. Contextualized: The information is framed within the user's specific situation or environment.
6. Timely: The report delivers information when it's needed or most useful to the user.
7. Insightful: It offers new perspectives or deeper understanding of a situation or problem.
8. Impactful: The information can potentially lead to significant improvements or changes in the user's work or decision-making process.
   
   
   A meaningful report goes beyond just presenting raw data or facts. It interprets and organizes information in a way that resonates with the user's needs and helps them achieve their objectives. Would you like me to elaborate on any specific aspect of what makes a report meaningful?

Me: "What if the only way to do a truth report requires a highly technical explanation that is beyond the knowledge level of the user?"

Claude: "This is an excellent question that highlights the tension between technical accuracy and user accessibility in reporting. When a truth report requires highly technical explanations beyond the user's knowledge level, several approaches can be considered:

1. Layered explanation:
   • Provide a simplified overview accessible to the user
   • Offer progressively more detailed explanations for those who want to dive deeper
   • Include the full technical details for experts or audit purposes
2. Visual aids:
   • Use diagrams, infographics, or animations to illustrate complex concepts
   • Simplify technical processes into more understandable visual formats
3. Analogies and metaphors:
   • Draw parallels between the technical concepts and more familiar ideas
   • Help bridge the gap between the user's knowledge and the complex information
4. Glossary and definitions:
   • Include a section explaining technical terms in simpler language
   • Provide context for why these technical elements are important
5. Executive summary:
   • Distill key findings and implications into a brief, accessible format
   • Focus on what the results mean for the user, rather than how they were obtained
6. Consultation option:
   • Offer the opportunity for users to discuss the report with an expert who can explain the technical aspects
7. Tiered reporting:
   • Create different versions of the report for different audience levels
   • Ensure the user gets the version most appropriate for their knowledge level
8. Gradual complexity:
   • Start with the most accessible information and gradually introduce more complex concepts
   • Allow the user to stop at their comfort level while still gaining valuable insights
9. Focus on implications:
   • Emphasize what the technical findings mean in practical terms
   • Highlight actionable insights derived from the technical analysis
10. Transparency about complexity:
    • Acknowledge the technical nature of the full truth
    • Explain why simplification might lead to loss of important nuances

The key is to balance truthfulness and accessibility. While it's crucial not to oversimplify to the point of inaccuracy, the report should still provide value to the intended user. The goal is to make the truth as accessible as possible without compromising its essence."


Would you like me to expand on any of these approaches or discuss how they might be applied in a specific scenario?

Me: "Yes, how about appraising the market value of a complex custom luxury home that requries advanced data mining to someone without an understanding of statistics?"

Claude: "This is an excellent scenario to explore the balance between technical accuracy and user accessibility. Let's apply some of the approaches I mentioned to create a meaningful report for appraising the market value of a complex custom luxury home using advanced data mining techniques, for a user without a background in statistics.

1. Layered explanation:Start with a clear, simple statement of the home's estimated value. Then, provide increasingly detailed explanations of how this value was determined.
   
   Luxury Home Appraisal Report
   Click to open document
2. Visual aids:Create an infographic showing the main factors influencing the home's value, such as location, unique features, and market trends. Use simple charts to illustrate how your home compares to others in the area.
3. Analogies and metaphors:Compare the data mining process to a master chef creating a complex recipe. Just as a chef combines many ingredients in precise ways to create a unique dish, our algorithm combines many data points to produce an accurate valuation.
4. Focus on implications:Emphasize what the valuation means for the homeowner. For example, "This valuation places your home in the top 5% of properties in your area, reflecting its unique features and prime location."
5. Consultation option:Offer a session with an appraiser who can walk through the report, explaining technical aspects in more detail if desired.
6. Transparency about complexity:Include a note explaining that while advanced techniques were used to ensure accuracy, the report has been simplified for clarity. Mention that some nuances of the valuation process are not captured in this simplified version.

Here's how you might present this to the user:


"I've prepared a comprehensive report on the appraisal of your luxury home. The report is structured in layers, starting with the key information you need and progressively adding more detail.


The first section provides a clear statement of your home's estimated value. Following sections explain how we arrived at this value, including comparable sales, unique features of your home, and current market trends.


I've also included some visual aids to help illustrate key points. For example, there's an infographic showing how your home compares to others in the area.


While the full process involves complex statistical analysis, I've focused on what these results mean for you as a homeowner. However, if you're interested in the technical details, I've included a section that explains our methodology using an analogy to a master chef creating a complex recipe.


Finally, if you'd like a more in-depth explanation, we offer a consultation with one of our appraisal experts who can walk you through the report in detail.


Would you like me to go through any specific part of the report with you?"


This approach provides a meaningful report by making the complex valuation process accessible while still conveying the thoroughness and sophistication of the analysis."

==== Example Report ====

Luxury Home Appraisal Report​

Executive Summary​

Estimated Market Value: $4,750,000

Overview​

This report provides an appraisal of your custom luxury home at 123 Oceanview Drive. Our advanced data mining techniques have analyzed numerous factors to arrive at this valuation.

Detailed Explanation​

1. Comparable Sales: We identified 15 similar luxury homes sold in the last 6 months within a 5-mile radius.
2. Unique Features: Your home's custom wine cellar, home theater, and smart home system were factored into the valuation.
3. Market Trends: Recent upward trends in the luxury market have positively influenced the valuation.

Technical Details​

Our data mining algorithm analyzed over 10,000 data points, including:

• Historical sales data
• Current market listings
• Economic indicators
• Neighborhood development plans

The algorithm uses a machine learning model trained on luxury home sales across the country, adjusting for local market conditions.

Methodology​

We employed a Random Forest regression model, which creates multiple decision trees to predict home values based on various features. This approach allows us to capture complex relationships between factors that influence luxury home prices.


For those interested in the technical aspects, please consult with our appraisal experts.

===== END OF EXAMPLE REPORT ====

Conclusion: So, what does this say in terms of "meaningful?" It says, you just need to layer your report to people with different levels of intelligence and knowledge. There is no consequent limitation on technical improvisation - as long as you feel it is necessary. And KEEP IN MIND: It is just another one of those things that USPAP has not clarified or defined - "Meaningful."

 

[RCA]

To continue:

You have strongly disagreed with this intended user/intended use orientation in our appraisal standards, and you have your reasons.

That is not at all true. The problem is that you lack a general understanding of the world.

But that doesn't alter the point that what exists now didn't come about as an accident or a mistake, even if some people think portions of it are obsolete.

I have never said, for example that USPAP came about by accident or mistake. I would say it came about by idiots, by Charlatans.

Moreover, the existing standard and the existing laws/regulatory structure also came about as the result of a process, not as some type of immaculate conception.

You are talking non sense. Immaculate Conception: "e doctrine that God preserved the Virgin Mary from the taint of original sin from the moment she was conceived; it was defined as a dogma of the Roman Catholic Church in 1854."

As a matter of law and regulation the appraisal boards can only enforce state law and regulation (one of which requires compliance with USPAP).

An ambiguous and incomplete standard full of implicit contradictions.

They don't have the authority to act on their own opinions outside of those requirements.

Unfortunately you can interpret USPAP, without making assumptions that rest on opinions.

Not legitimately, anyway.

What is legitimate is a matter of opinion in many cases to different degrees.

In governance we commonly expect that the ends don't justify the means.

The ends are a matter of opinion, different people have different opinons and one reason we have laws is to put restrictions on the means. So, of course.

Here's one reason why: IRL it is the users who form the opinions of the credibility of the workproduct and whether or not to use that workproduct in their decision making. If *in their opinion* they don't think an appraisal is sufficiently credible they probably won't use it;

Oh, they will use it for a rubberstamp, regardless if they think it is credible or not. That is a fact.

and if the credibility gap between the appraisal and their expectations per their policies is too great they will also sometimes cut the appraiser off altogether.

I would say that this is PRIMARILY what you YOU are concerned about. You are concerned about getting cut of from your customer base because you don't meet their expectations. and I THINK that is cornerstone, the foundation block, - of appraiser corruption.

So it DOES matter what the intended users think.

Of course. The question is how much weight to give that. The BALANCE.

Right down to their choice to use appraisals or use AVMs instead,

Well, the see appraisal off by 50%, and they cost 10 times what AVMs cost, ....

and right down to the fees they're willing to pay in exchange for what they think they're getting for those fees. There ain't nothing abstract about any of that.

That is true. But you lack a clear understanding of these issues.

The current migration away from using the conventional 1004 is being driven in part by the users opinions WRT the utility of an AVM or BPO or Hybrid or Desktop SOW when compared to the conventional 1004.

We are dealing with a bunch of idiots, all the way around. There is nothing wrong with the 1004 per se, its the appraisers behind them - and their sloppy methods and then the Standards behind the appraisers and their lack of definition, degree of ambiguity and level of contradiction.

They're considering the question: "is the value-add of an appraiser's personal inspection worth paying $100 more and waiting for another couple days?".

If all they want is a rubberstamp, the inspection is only important insofar as it is required for the rubberstamp, and if they can get by with a cheaper low quality inspection, that is often not important to them. It is the rubberstamp that can make it through to the GSEs without a hiccup.

For some assignments the users have decided the answer to that question is "yes" and for other assignments their answer - driven by their opinions of it all - are "no". That much is self-evident.

Already commented on this.

A lender's appraisal policy outlines the supplemental requirements for those assignments, above and beyond the USPAP minimums. That's why its the appraiser's obligation to be familiar with those supplementals and for them to meet those supplementals in their assignments. That's one way of establishing and maintaining credibility to those users.

Those supplemental requirements have to pass muster. They often don't. So, you are wrong again. It is the appraisers job to review those so-called supplemental requirements and make sure they are legitimate. There are so many issues here. Fannie Mae says that the appraiser has to measure according to ANSI standards, yet they are accepting Cubi Casa measurements and floor plans, which are not ANSI compliant. [ Now yes, Cubi Casa says it plans "align" with ANSI Z765, without defining what "align" means, we are left to decide on this and -YES, IT IS THE APPRAISER'S RESPONSIBILITY. Cubi Casa's main argument for its legitimacy is. that its error rate between Cubi Casa users and appraisers is the same. It's a scam. I have tried Cubi Casa and it can be off by a mile in certain stiuations and it is definitly not accurate to an inch on external measurements, IN FACT it can even make external measurents! So, Cubi Casa DOES NOT MEET ANSI Z765 standards, yet they are accepted by the GSEs. DW has on this forum stated -- because they are more reliable than appraisers [which by the way does not surprise me at all]. But the point of the matter is that these so-called guidelines are rubbish.

Which to reiterate is still the primary orientation of our appraisal standards in their current and historical form. That's the operating environment the appraiser was supposed to be operating in during their assignment, and insofar as opining on the quality of the workproduct that's the only fair basis for a reviewer to use in performing their review.

This really isn't saying much of anything.

If an appraiser performed an assignment for BofA then that's the rulebook in play.

There is a stack of rulebooks, often with contradictory or ambiguous requirements.

It becomes unfair for a reviewer to base their opinion of errors and deficiencies on the appraisal policies of Wells instead of the policies of BofA. That's why the first question I asked was what rulebook - if any - was in play for the appraiser's assignment?

Again, again, it is not a single rulebook. It is a stack of rulebooks that have ambigrous and contradictory requirements, explicitly or implicitly (if we follow the rules of deduction and inference).

 

[djd09]

the only violations i see are the banksters manipulating state boards into reviewing legit appraisals as some sort of swatting event because the number was missed...there needs to be liability for the complainers to the appraiser when they make false claims...what appraiser would not agree to that

 

[CGinMN]

Well yes, but why pile on?

I see it in my state too. They pile on because they are acting like prosecutors, for leverage in the plea bargaining. It sends the wrong message to appraisers who actually read these complaints. “They want me to adjust for driveway shape? Huh?”

 

[Elliott]

I was once accused by the state of 'missing' access to a land locked parcel even though it showed up clearly on the assessors map as a vacated street and was steep as hell. It had nothing to do with valuation. It was an accusation which was patently false, but it didn't matter. Once the ball gets rolling,.....facts don't matter.