Proposed Changes In The Law

[Stephen J. Vertin MAI]

Steve:

I respect your opinion; however, you have provided little reasoning to back them. Possibly if you could elaborate, it may influence me. I believe I have laid a strong argument as to why these laws are bad for our business. They may be fine laws for the "Maes" but not all appraisals or appraisal assignments are for said purpose or scope. Furthermore, the Maes have their own guidelines. Why put them into standards for all assignments? Again, I believe my reasoning is fully explained. Help me out as to what you think is faulty.

Steve Vertin

 

[Steve Owen]

Stephen, you asked for some reaoning supporting my opinion. That is hard to do, since it is just an opinion. Additionally, it is based mainly on Missouri having similar rules, however, in reviewing the stuff you listed, it seems I may have jumped the gun. Some of it still seems reasonable to me, other parts seem a bit reaching. Of course, the idea that investigators do not have to follow the rules is ludicrous.

However, I have heard some rumblings in Missouri that Illinois didn't have strong or specific enough rules. Here is Missouri's assignment log rule:

4 CSR 245-2.050 Appraiser’s Assignment Log (says, in part):

Every licensee shall maintain a summarized listing of the real estate appraisal assignments wheich the licensee is required to retain under section 339.537, RSMo. This summarized listing shall include, at a minimum, the following information: (A) Date of the appraisal; (B) Location/identification of the property appraised; © Client’s name; (D) Appraiser(s) involved in the appraisal; (E) Property type; and (F) Appraised value.

Concerning the next few things you listed:

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.

I don't see anything here that isn't already covered by USPAP. They may be getting a little anal by spelling it all out, but every state requires compliance with USPAP.

Now, as for the other things, such as comp selection, my initial reading may have simply been wrong. I read through the proposed changes and thought, that's pretty much what appraisers should be doing anyway, so what's wrong with spelling it out in a rule? After reviewing the other comments on this thread and thinking it over, I can now see several things wrong with it. Sometimes that's what happens when you don't take enough time to think before posting.

 

[Stephen J. Vertin MAI]

Steve:

Your an honest man and I have a lot of respect for that. I am glad you took the time to read the information. You are right, on the surface they do sound like practical rules. At least for a specific type of assignment or for most single family homes. However, for many other type of appraisals they are disastrous. They are very short run thinking.

Steve Vertin

 

[laynelucia]

Changes in the Law and Lack of Mutual Respect

I had written a diatribe on why I thought certain changes were good and bad, but then I sat back and really looked at it, I deleted it and, believe it or not, came up with this more brief synopsis regarding my thoughts on what is currently happening in our industry, enjoy, or throw darts:

1.) Keep doing the right thing, as our company policy is here (IT IS, WHAT IT IS), my Appraisers are getting tired of hearing that from me, but it holds true and if we follow this philosphy, how can we go wrong?

2.) We must find a way to respond to the future demands of our clients within the bounds of our ethics (I say our ethics, because theirs seem to differ greatly as evidenced by non-licensing). They are demanding faster turn times and more accurate appraisals and I think this can only be accomplished through larger appraisal firms or cohesive partnerships amongs us, with multi-tiered Appraisal duties, such as Persons conducting ongoing market studies of their respective markets, experts in inspections (I truly believe every inspection should be performed like an FHA inspection with interior photos, which are required in my firm) and a Multi-tiered Supervisory Appraiser system of Appraisers who review each file before it goes to the client. I even have some appraisers send us files to review their files and make recommendations for a minimal fee, regarding errors and potential red flags before sending it on to their clients.

This will not be popular with the "good ole boys" because they want it to be like the old days, but come on gang, we must respond to the future demands of the industry or I Guarantee our clients will find a way to replace us with these "AVM's" coupled with a inspection by one of their "loan trainees" and this would be a sad day for home owners all over the nation.

Also, a word of Lack of Mutual Respect between Appraisers:

I have found, through my and others experience that Appraisers do not communicate very well. Specifically Review Appraisers make judgements without ever contacting the appraiser they are reviewing. I not only find this to be extremly cowardly, but unethical. How can a review appraiser or reviewer for a bank (loan company, etc.) make a decision as important as Blackballing someone or worse yet sending in a State Complaint, without trying in full to understand wholy the appraisers thought process without contacting them. (I am not talking about obvious fraud here of course, but general value issues). It appears to me that some appraisers are too anxious to make themselves look superior and react to fast.

An appraisal is a snapshot in time and to pretend we know what happend within the confines of that snapshot, without speaking with the picture taker is just eggregious. Come on reviewers contact those Appraisers, don't be cowardly!

Unfortuneatly, in our industry in general and Michigan in specific, in speaking with the Attorneys and Appraisers I meet with twice a month, I have found that there are many Appraisers that use reviews and complaints to "thin the field" of competitors and some that have even tried to set up Appraisers.

Thankfully, we have the Appraisal Forum to help us become more cohesive and the one's that I am speaking of will most likely never read this, but it's very good to be aware of the "snakes" in the garden.

Layne Lucia
President
Redfern, Lucia & Associates, LLC

 

[Terrel L. Shields]

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,

Idiotic paperwork. How does anyone have time to appraise?

All appraisers shall make the experience/work log available to OBRE for audit or examination within 5 days of request.

Good God, you cannot even go on vacation!

I don't care who or what does the preliminary but once they suspect a USPAP violation, it is clear that they need to do a Std 3 review to proceed. It doesn't happen. Arkansas got beat in court when an appraiser was accused of hideous violations of USPAP. She lost the first round but made case law when she appealed. The appeals court pointed out that the board had charged her with the violations but never laid out what those violations were or how they arrived at the conclusion that they were violations. They violated Administrative law. Of course, it was a Pyrric victory because she cleared her name but was basically bankrupted by the board. It not only can happen but it is happening.

 

[Mike Boyd]

David: As usual you make good sense.....

Austin.....Don't count on it. I believe we will all drown from rising oceans due to the greenhouse affect before that happens. One class will give rise to another and then another 'til the end of time.

 

[wyecoyote]

Ok another one dredged up. This original was from 2002.

 

[xm72mhd]

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.

Wouldn't the AQB or ASB, or whoever certifies the states, be interested in that? I heard somewhere that they might jerk accreditation for a whole state if the board is sleeping on the job or with the enemy.