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Proposed Changes In The Law

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Stephen J. Vertin MAI

Thread Starter
Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Here is one of the proposed changes to our State law in Illinois.

a) All investigators, auditors and examiners employed or retained by OBRE, are exempt from the requirements of USPAP Standard 3 while performing an investigation, audit or examination or providing testimony in a hearing as directed by OBRE.

This State has gone beyond bad. Our Board is truly out of control and I can say without a doubt is one of the worse in the Nation. Sorry, SC, Illinois holds the title, but you are holding a strong second.

Investigations are so bad here and the expert witnesses are so incompetent, the only thing the State can do is get rid of Standard 3. Laws are not made for those who enforce them. They are only made for the one's the government is trying to oppress. It is hard to believe I live in the US anymore.

I have never seen times as bad as these in our profession. I filed a complaint concerning lender pressure with the authorities provided by AI a month ago. I never heard back from the proper lender enforcement agencies. I can not express my grieve that lenders can violate FIRREA with complete immunity while appraisers can be prosecuted at leisure, anyway, by any means, no bars hold and screw the rules.

I do not think it could get much better for the lending industry.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
It looks like they are trying to say:

"The rules apply to you, not to me."

Which can be interpreted as:
"Do as I say, not as I do."

This leads to:
"The ends justify the means."

Which in turn will eventually lead to:
"This will be the final solution."


All of this to save a buck with sloppy and unprofessional work that can not stand up successfully to appeal, and which will eventually end up costing more anyways as they try to cover one lie with another.


George Hatch
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
If applied as the law would seem to indicate they would intend to, it "could" be fair. That also depends on WHAT constitues an investigator. The latter would have to at least have SOME background to do preliminary investigations and on which side to carry her gun!

This likewise assumes that most of the violators when charged, and subsequently appealing, if necessary, will be heard by at least an administrative law judge and that the violator will be represented by a USPooP expert.

I would have a USPoop expert go over my product immediately upon being charged so that I'd KNOW which avenue to pursue and perhaps what to plead to in order to stave off further damage to my career.

WHETHER we like it or not, we do have to work within the system. They keep telling us it applies to everybody. Of course it does -- NOT!

It only applies to those who get fingered.
 

Stephen J. Vertin MAI

Thread Starter
Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
I need to correct something in my post. I said: "Sorry, SC, Illinois holds the title, but you are holding a strong second". I meant to say NC, sorry SC, I did not mean to insult you.

Steve Vertin.
 

David C. Johnson

Senior Member
Joined
Jan 15, 2002
<span style='color:darkblue'>AppraisersForum:

Our profession and our country are eaten up with cowards. They sit and watch. They quietly accept both the questionable and the outrageous without question, and rely solely on others to protect their worlds. Cowards are dangerous. Our soldiers, including our firemen and law enforcement officers, are largely worthy and brave, and most of us would stand up against physical attack; otherwise we are largely cowards. As someone wrote recently: "fat, dumb & happy." From a statistical perspective, I personally believe AppraisersForum participants tend to be considerably less cowardly and apathetic than the typical American as is demonstrated daily (and specifically by so many personally identifying themselves -- at at least some degree of economic risk -- via The Petition). We need to take further ownership and responsibility for our own wellbeing. We need to be brave and strong. There's just no one else who will do it for us.

I hope people of the Appraisal Subcommittee (ASC) are not cowardly; cowards in important postions of authority are the most dangerous. I hope they are paying attention to all that is happening and will take additional initiatives to promote the integrity and health of our profession, because they are very much needed. In the interest of all, including the states, the regulation of the appraisal profession must not be left up to the states.

It is not right to suggest that this is a states' rights issue. It is not. Appraisal boards are not elected representatives of the people of a state. Some appraisal boards work directly against the interests of the citizens of their state. The real, but hidden issue may actually be "Appraisal Boards' Rights." Some represent only themselves and coveat the rights to more power (see: www.boardwatch.org/htmfiles/USPAP3.htm ). In the interest of protecting the public -- the citizens of the states -- the ASC must step up to the plate to protect the citizens of the states. This is because the appointors to state appraisal boards normally have no legitimate basis for their selections; and worse, those least fit to serve are often most likely to be appointed. Its not that the appointors desire to make grossly inappropriate appointments, it's just that inappropriate appointments are often worth much more (to the appointors' greater agendas) than the alternative appointment of the ethical and competent. Cash may not always be involved, but some form of quid pro quo often is. The integrity of the appraisal professions of the individual states are too often viewed as pawns to be traded (i.e., to be sacrificed) for other interests. This is not to say that such "other interests" may not be in the citizen's interests at times, but the trading of the integrity of the appraisal profession appears to be entirely too common -- not to mention the fact that it is often sold far too cheap. This is damaging to all the citizens of the states -- not just appraisers, and there is no reason to believe this phenomenon with the state appointors will ever change. We are sure it will not. It is just too tempting and too easy.

For this reason, the ASC must be surefooted and bold for the benefit of the states (i.e., the states' citizens, the public -- the states), and we must support them. If a state's real estate commerce is shut down for any period of time due to</span>acceptable behavior by its board, decision makers for that state will shapeup their board members for the good of the state, if not from the pressure of the real estate and banking industries. No states will be succeeding from the Union on this issue, and the citizens of the states will be much better served. There may even be less drastic means to encourage decent behavior from a few errant, arrogant selfserving appraisal board members across the country.

The recent reappointment of Mr. Ossie Smith to the North Carolina Appraisal Board (NCAB) is a good example of a harmful appointment trade-off. No one with any hint of credibility or ethics would even consider suggesting that Mr. Smith was appointed to the NCAB out of interest for the integrity of the profession. That's insane. We have seen his performance there, its unacceptable and it also had been reported to the governor's office. Likewise, I know of no one who has ever suggested he's a decent appraiser. Mr. Smith's appointment was strictly due to his influence in the tobacco industry. Plain and simple. He's there because he wants to be on this board (reportedly as a stepping stone to Raleigh or Washington, DC). His appointment appears to be part of the spoils of successfully promoting death and disease throughout the nation and the world for decades -- it has nothing to do with appraising. Our governor might even be inclined to concede this fact, because his intentions may have been honorable. Increased cooperation from the tobacco industry to ease off the equivalent of Joe Camel commercials to kids may be a good tradeoff if such as that was the intent. NC is currently figuring out what to do with its share of many millions from a tobacco liability settlement. Just in time too. As of this month it was announced that a full third of the state's high school students are now hooked on nicotine. (For that matter so is Mr. Smith, Bob Ipock and David C. Johnson.) Maybe the state will see a net benefit of less destruction, on the other hand, it may see more, I don't know. Regardless, because of this and similar appointments at the NCAB, one may aptly envision all the integrity of a table full of tobacco pushers with left hands on the bible, right hands in the air -- all lying their backends off. The image is fairly fitting. This is what one state's appointment system has done to its state appraisal board.

Another example is found in another recent post of Steve's where he writes as follows:

QUOTE:
"I do not know about other States but I certainly have little faith in Illinois. Our current Governor was involved with a license for bribe scandal. One of these illegal license sold was used by a trucker who hit a family on the expressway causing an accident that burned them alive. It is so bad the current Governor decided not to run again. His own party is eating him alive before this years election. This is the guy who politically appointed our current board. State independence would be disastrous here..." UNQUOTE

This may be the situation with other appraisal boards across the country too. If it were not for Steve's courage and integrity, we would not know about the Illinois board. If several appraisers in NC happened not to exist, we would not know about NC's board. To me, this suggests that there could very easily be many other states across the nation with similar corrupt and/or inept appraisal boards that have just not been revealed. This is incredibly harmful to our profession and damaging to the citizens of the states.

A means of screening and qualifying state board member appointees by the ASC would be vigorous manditory testing. Timed resolutions to case studies in the application of USPAP to hypotetical disciplinary scenerios might be an idea to consider. It might not do much to weed out the unethical (accept for the ones who are too lazy to learn what they are to enforce -- and NC sure has some of them), but it would go a long way towards weeding out the cognitively incompetent, and that's easily half the problem right there. More important it would eliminate the combination (i.e., unethical and incompetent) in a prospective member -- which is simply deadly to enforcement efficacy. The ASC has a dire calling for the sake of the states and the nation, and as members of the affected profession we have a dire calling to support them.

Regards,

David C. Johnson, Raleigh[/color]
____________________

<span style='color:darkred'>Two letter word correction in forth paragraph: "acceptable" to "unacceptable" appears in a red bold font -- dcj</span>
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
David: As usual you make good sense. Maybe I am getting old and either wiser or senile, I am not sure which, but in recent years my perspective of things have changed. What you just described is one head of a many-headed snake. Something fundamental is happening in this country and in the western nations that in my opinion is about to come to a climax and destroy this ruling power structure as we have known it, but I don’t want to go into the details of that. The problem you just described is a result of democracy. Democracy I was once taught in political science, whatever the hell that is, is that democracy was a system designed to keep a nation from ever doing anything significant. In other words, democracy was designed to keep anybody with vision and a desire to do something from acquiring the political power to do it. Our founding fathers did not bequeath us the system we have. The system we have is a bastardized version of what was intended. It has resulted in a two party system with one party the Republicans representing the establishment, and the other party the Democrats, representing the various self interest groups whose chief aim in life is getting their hands on somebody else’s money and power. The Democrats have corrupted the system to the point that it is approaching gridlock. They have even corrupted the judiciary by vetoing any judicial appointee who does agree in advance to their worldview. The situation you described with the NCAB board and Ossie Smith is just an example. It is all about politics and money. No person is in control, the system is in control and the system is corrupt and corruptible. Our form of democracy is highly successful; it was designed to ensure failure and it has done just that. A republic does not suffer these short comings.
Now, how do we live with the system? I graduated from a military academy in high school and spent 3 years in the army and learned how to survive in a bad system. The way you do it is to stay out of sight and out of reach of the evil giant. Keep your mouth shut and your head down and look out for your own butt and let everybody else do the same. That may sound selfish but that is exactly how the world works. The problems we are having with the system will take care of themselves. The corrupt system will collapse of its own weight. The time is drawing near. The ruling power elite in this country and the western world is on the verge of self-destruction, but a better one will emerge. Remember the old saying: “The only concept that never changes is that things never stop changing.” And this old adage: “Truth when crushed to earth shall rise again. The eternal years of God are Her’s, but error wounded writhes in pain and dies amid her worshippers.”
 

Doug Walters

Freshman Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Nebraska
Stephen J. Vertin said:
a) All investigators, auditors and examiners employed or retained by OBRE, are exempt from the requirements of USPAP Standard 3 while performing an investigation, audit or examination or providing testimony in a hearing as directed by OBRE.

Stephen,
Another point of view, I don't see the word appraiser in the proposed rule. Why should anyone who is not a licensed appraiser be required to adhere to appraisal guidelines? Is the reader to assume that the word "all" includes appraisers performing the functions identified as investigator, auditor or examiner? Maybe the proposed law needs to include a statement regarding appraisers and compliance with USPAP in those instances where the investigator, auditor or examiner is also a licensed and/or certified appraiser. It may be worth contacting your state legislator or the sponsors of the bill to provide clarification of the meaning, and to amend it if necessary.
Doug Walters
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Doug W.;
briefly read thru Steve's remarks and yours, and the question hear is who is being the investigator?? If they are not Cerified or whatever, and have no idea of what the requirements are, how can they pass judgement?? This would be like putting you (assuming you have no building background & are unfamiliar with state laws & requirements) to sit on a Board hearing complaints about a builder.
USPAP was developed due to the "Great Banking Depression" of the late 80's & early 90's and to provide greater stregth in protecting the public & the Fed., we cannot provide either if everything that was put into law, is now being totally disregarded.
It is similar to the many gun laws that are and have been in effect, there's no need for new ones, all they have to do is stand behind the ones that exist now. David Johnson, makes several good points and the best is the reference to the many "cowards" that run rampant in and about the country. Unsurpervised children can be lead astray at anytime when enough "candy" (money; power; granted position; - etc) is placed before them; their resistence is low; their minds get tainted; and before you know it, they can do only "cowardly" acts because they are weak.

If someone wants to become involved in a board or a committee of any type, at a minimum they should poses the qualifications (equal to and/or greater to whomever is being heard) and have the ability to be able to hear each and everyone's position on whatever is in question. If the ability for that simplicity is not available, then the board and/or committee should be Deemed bias and prevented from hearing any further cases until that issue is resolved.

Just a Thought - 8)
 

Stephen J. Vertin MAI

Thread Starter
Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
These are all the proposed changes and additions to USPAP in our State. Again, these inclination to have different Standards in different States is a very bad idea. Check it out.

a) All investigators, auditors and examiners employed or retained by OBRE, are exempt from the requirements of USPAP Standard 3 while performing an investigation, audit or examination or providing testimony in a hearing as directed by OBRE.

Section 1455.260 Experience/Work log.

All appraisers licensed under the Act are required to maintain an experience/work log as provided in Section 1455.190 of this Part for all appraisal work performed. Such experience/log logs shall be updated no less than 30 days after the appraisal work is performed, and shall be maintained for a period of not less than 5 years. All appraisers shall make the experience/work log available to OBRE for audit or examination within 5 days of request.

Section 1455.270 Supplemental Standards

a) Pursuant to Section 15-10(a)(6) of the Act and the Supplemental Standards Rule of USPAP, failure to comply with any of the following standards shall be considered a violation and may be subject to discipline as provided for in the Act and this Part:

1) No appraiser may accept or complete an assignment for which he or she does not possess the requisite competency. Competency requires that an appraiser possess a basic familiarity with the specific property, market, geographic area and analytic method necessary to develop credible results. An appraiser, not deemed competent under this section, may nevertheless provide significant contribution to an appraisal report, providing a competent appraiser co-signs the appraisal report and all other requirements of the Act, rules and USPAP are met.

2) In developing a real property appraisal, an appraiser shall analyze any prior sales and listings, agreements or contracts for sales of the property that occurred within three years for all property types.


3) An appraiser shall prepare a work file for each appraisal, appraisal review, or appraisal consulting assignment. The work file shall include the name of the client and identity, by name or type, of any other intended users, true copies (as transmitted to the client) of any written reports, documented on any type of media; summaries of any oral reports or testimony, or a transcript of the testimony, including the appraiser’s signed and dated certification; and all other data information and documentation necessary to comply with this Part and all other applicable sections of the Act and provisions of USPAP.

A work file shall be in existence prior to and contemporaneous with the issuance of a written or oral report. A written summary of an oral report shall be added to the work file within a reasonable time after the issuance of the oral report. A work file shall be made available to OBRE within 5 days of request.

4) An appraiser shall perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.

5) When preparing a real property appraisal or appraisal assignment, an appraiser shall not act as an advocate for any party or issue.

6) For the purposes of compliance with USPAP Standard Rule 1-4(a), comparable properties are those properties that are similar to the subject property being appraised in the following characteristics: building size, architectural style, functional utility, building materials, construction quality, age and condition of improvements, site size, location, view, economic market conditions, conditions of sale and zoning.

Additionally, properties used as comparables should be competitive with the subject property and located in the same economic market area or neighborhood. If data on the sales of local comparables are unavailable, transactions involving properties in other comparable, but not directly competitive neighborhoods or locations may be utilized in the sales comparison analysis. Properties that do not appeal to the same market population are not to be considered competitive even if they are comparable to the subject in other ways.

7) An appraiser who signs any part of the appraisal report, including letter of transmittal, must also sign the certification. An appraiser who signs any part of the appraisal report, including letter of transmittal, accepts full responsibility for the contents of the appraisal report and any violations of the Act, this Part or USPAP contained within the appraisal report.

For the purposes of this section, a letter of transmittal is any letter, cover page, memorandum or similar document that accompanies the appraisal report when it is transmitted to the client.

8) A rebutable presumption of dishonesty shall arise whenever an appraiser commits one or more of the following acts or omissions and fails to provide a credible explanation upon request:
A) Reports a sale of a comparable when no such sale occurred;
B) Reports a sale of comparable which cannot be independently verified;
C) Reports a verification source when no such verification exists;
D) Mislabels or omits to label the location of the subject or comparable sales on the location map when the proper labeling would have raised a legitimate question as to the appropriateness of the comparable sale;
E) Mislabels or omits to label the address and/or city of the subject or a comparable sale when the proper labeling would have raised a legitimate question as to the appropriateness of the comparable sale;
F) Significantly misreports or omits to report the gross living area of the subject or a comparable sale when the proper reporting would have raised a legitimate question as to the appropriateness of the comparable sale;
G) Utilizes as comparable sales, properties located outside the economic market area when suitable comparable sales were available within the economic market area;
H) Utilizes as comparable sales, properties which are significantly dissimilar to the subject in type, age, construction, design or appeal when suitable comparable sales were readily available; or
I) Any significant deviation from USPAP standards, the Act or this Part, when viewed in the totality of the circumstances raises a legitimate question as to the overall credibility of the appraisal.
 

Stephen J. Vertin MAI

Thread Starter
Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Doug:

I wish it were not true, but most investigations, are done by appraisers. Therefore, investigators are appraisers. This is really a sad state of affairs. I called our local Guild President to ask if there was anything I could do to help. The good news is, he stated this has little chance of passing. There is to much opposition. I pray that those in power will see the injustice of what is occurring and that their decision be righteous. I am tried of sounding like a bitter old man and only seek justice for all, as our great constitution gives us the right as citizens of the wonderful country of ours. Maybe my bitterness comes from my feeling of helplessness when confronted with the many obstacles in our profession. In my heart, I feel most people want to be just and fair, but the system, as presently stands does not do much in accomplishing the task. I do not believe there is an appraiser, regulator or organization currently existing who does not share my frustration with what is happening.

Not only does Illinois want to change standards, they want to be able to dictate comparables. This comes directly from State's philosophy not to challenge values but attack comparables. This is always a win/win game for the State. I mean there are always other comparables that could be argued as better. The premise there is a way and means to select the prefect comparables is ludicrous. 1) It assumes any one can select the right comparables based on a listed critera without formal training 2) AVM's could easly be programed and used based on said set pattern, 3) the subject is adjusted to the comparables rather than the other way around, and 4) the process is not subjective, requiring some judgement and education.

Go to Illinois website, you will see 90 percent of the States convictions are Standard 1, Rule 1-1, by failing to be aware of, understand and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal.

Most cases involve the selection of comparables. In Illinois all that needs to be done is an admission other comparables exist. I swear this as truth. The State does not even bring the darn things to the hearing and present them as evidence and try to explain why they are better. Just the fact of existence draws convictions. Since they are not doing Std 3 reviews, why bother with such details.

As stated in my above post, one of the proposed rule changes says "For the purposes of compliance with USPAP Standard Rule 1-4(a), comparable properties are those properties that are similar to the subject property being appraised in the following characteristics: building size, architectural style, functional utility, building materials, construction quality, age and condition of improvements, site size, location, view, economic market conditions, conditions of sale and zoning."

What the hell does this mean? Are they to be selected in said order? The only time I have heard a process of selection was in older editions of AI text; however, it is quite different. Older AI text book editions, states "elements of comparison are the characteristics of properties and transactions causing prices to vary. Certain elements should be considered and compared. If necessary, adjustments for these elements should be made to the sale price of each comparable property. The elements of comparison are: 1) property rights conveyed, 2) financing terms, 3) conditions of sale, 4)market conditions (time), 5) location, and 6) physical characteristics"

It appears the State of Illinois has revised selection by making physical characteristic elements the major priority unlike the old AI text which indicates it as last. Give me a break. Why are States in the business of dictating appraisal theory and process? Furthermore, newer AI text abandoned this line of reasoning. The reason Illinois is doing this is because they want to push through convictions of appraisers. They are back log and swamped with complaints. It is immaterial what is right or wrong. As Karl Marx stated "the end justifies the means".
 
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