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Making Me ILL

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liznindy

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Indiana
I have been performing a large number of retrospective reviews for a client (approximately 25% of my business last year). I recently received 10 more of these assignments and the majority of these appraisal reports to be reviewed are obviously fraudelent.

For example: MLS listing showing the subject offered at $20,000 at time of the effective date of the appraisal.....appraiser's opinion of value $60,000 with a comment (in the "analysis of any current agreement of sale, option, or listing" section on page 2 of the report) stating the subject is currently listed (no details, of course) or no comment made at all.


I am glad for the work but SICK of the sloppy and misleading and out and out fraudelent appraising in the majority of these reports.

MY QUESTION:

Can I turn these reports in to the Appraisal Board with the reviews I perform for my client, or without a review, or must I perform a seperate review to accompany the reports?


AND

Can I turn these reports in without the permission of my client?



The sad part is, many of these reports are signed by trainee appraisers under the direction of a supervisory appraiser......ATTN: TRAINEES FIND AN ETHICAL MENTOR or your career may be short lived and/or you may spend time in prison. Ignorance is no excuse.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
The sad part is, many of these reports are signed by trainee appraisers under the direction of a supervisory appraiser......ATTN: TRAINEES FIND AN ETHICAL MENTOR or your career may be short lived and/or you may spend time in prison. Ignorance is no excuse.

Even sadder is that most trainees have no idea that they're making such huge mistakes. Basic classes that give them their trainee licenses simply don't cover enough bases.
But that's a whole different topic. :wink:
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I don't see why you can't turn them in. Just be sure that you comply with Standard 3 in your review and sic 'em.

Roger
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I agree with Roger. Now go do a little house cleaning. :p
 

Suzanne K Hansen

Sophomore Member
Joined
Aug 31, 2002
As a trainee, this scares the beejeevers out of me.

I am doing everythig I can and have done everything I can to 1) find a supervisor that I can trust to teach me the ethical and legal ways of appraising, 2) read everything I can on the parcticalities and the legalities of appraising, 3) read and ask questions in this forum

yet,

I know where my supervisor has given me advice that is not on the mark, (fortunately , I caught it thru this forum)

What more can I do to protect myself?

There just aren't supervisors out there for the most part, to choose from. I was lucky to have found three to choos from because I worked hard to find options and chose based on what I thought were good criteria:
Knowledge
Ethics and Honesty
Reliability

I believe I made a good choice. But there are aspects even the most seasoned appraiser may miss or have never dealt with. Sometimes the wrong information is imparted, not by intent, but for any of the reasons anyone on this forum might cite: USPAP homework, interpretation differences, tough calls.

What's a trainee to do????
 

Mary Caffey

Sophomore Member
Joined
Feb 22, 2002
suzzane - my husband and I are both so strict........

I am a real estate broker and own a century 21 franchise www.lakelivingston.biz


and am so selective in my agents hiring process that I am know as the "b----" in town as I don't put up with any flim flam crap-

husband is an appraiser and I do his input and look over some of the re-dos that he and son are asked to do- the work is AWFUL and this is from MAI's and those who should know better !!

My suggestion is to 1. know the market by looking at the MLS stuff FOR SALE-
2. always look at the comps you use-
3. find you an honest LO and ask them the underwriting questions that they are going to have you answer if you don't get it right the first time
4. stay AWAY from unscrupulous LO's and those who talk really really fast and want it TODAY (as in Double Rush) .......You might not get much help from competitors, but read the Real Estate Valuation Magazine from cover to cover and even the Realtor zines from your state.

Good luck

mary in Tejas
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
Liz,

Yes. Turn them in.

Not only can you. I think it is our duty to police our own.
 

Tawfik Ahdab

Senior Member
Joined
Feb 19, 2003
Professional Status
Certified Residential Appraiser
State
Oregon
I have been absent from this forum since October 2001, although I've been lurking. Ever since I started following this forum in 1998, I have been amazed by the repetitious nature of so many appraisal topics discussed. There is definitely a large set of issues that perennially crop up: e.g. updates of appraisals, sample reports, adjustments, filing complaints, and so on. On the latter topic, I offer the following: USPAP's Confidentiality Rule states:

An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law;

The Ethics Rule states:

An appraiser must not communicate assignment results in a misleading or fraudulent manner. An appraiser must not use or communicate a misleading or fraudulent report or knowingly permit an employee or other person to communicate a misleading or fraudulent report.

While this does not answer your question directly, the USPAP passages quoted not only giving you permission to report defective work to state regulatory agencies, but under a reasonable interpretation seem to go so far as to prescribe that you file a complaint lest you yourself be in breach of the Ethics Rule.

If the lender refused permission and you complied, you could be in violation of USPAP for knowingly permitting an "other person" to communicate a misleading or fraudulent report. It is inappropriate to grant the client the authority to dictate your compliance with, or violation of, USPAP.

My answer is: do not seek the permission of your client, but merely notify him - as a courtesy - that you intend to file a complaint with the state board.

Regards,

Tawfik Ahdab
 

liznindy

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Indiana
Suzanne,

I am not talking about just differences in opinion for adjustments, but outright lies and falsifications being made in the report such as no mention of recent sales or current listing of the subject, overlooking repairs needed, etc.

One word of advice I would give to trainees, is to make sure you are selecting your comps based upon similar physical characteristics, similar location, etc........DON'T SEARCH BY PRICE!!! I have seen too many appraisals where it is obvious the appraiser went outside the subject's market to "make value".

And, as Mary in Texas says, also look at actives in the subject's market, days on market (true days on market as frequently listings are taken off then put right back on again by agents and the true DOM is not typically reported on the MLS sheet).

Good luck, and if you ever disagree with your supervisor on a value issue, just refuse to sign the report. I did this on occasion. If it is not your opinion of value, don't sign!
 

Suzanne K Hansen

Sophomore Member
Joined
Aug 31, 2002
Thank you Liz and Mary for your advice. I feel a little more confident after your posts.

At this point, my Supervisor and I agree that until I am fully confident in my own ability to defend my value opinions, I don't sign. My supervisor is very conservative in valuations, so I feel we are doing the right thing in protecting the Industry from fraud, and even unintentional hyperinflation.

I have my own business and obtain my own clients and assignments, this has caused some conflicting ideas with those clients when my Supervisor and I don't "hit their price" and every once in a while a client will not accept an appraisal. If they paid upfront, I send back their money and tell them to go elsewhere, usually they change their minds. If not.....bye bye client.

I recently did a value check and for a client and the value was far lower than their "target". After his attempts to discover if I'd move on that value, to no avail, he sent me an email saying to not continue with the appraisal as he had found an appraiser who would "hit the mark". Since I knew the area both for sales and listings, and knew that the value was not remotely close (~250K vs 350K) I had to wonder how in the world an appraiser could "Make" an appraisal like that.

Your comments Liz, tell me how.

I think weeding out the baddies is critical to our profession.

Thanks for doing so.

Suzanne
 
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