<span style='color:darkblue'>Brad,
As you and I don't know each other at all, I am at a bit of a loss to figure out how to express my concerns with your post. I am not interested in being offensive to you, but at the same time I am not interested in "sugar coating" the concerns, so this post of mine is going to be a challenge for me. Please take it with a grain of salt or two. (One good thing about the length of it -- few will read it.) Most of this was actually written prior to Steve's latest posting, which I have read. I am going to pull some quotes of yours, from your post to Steve, and generally in the order they appear from your post, and add some comments.</span>
<span style='color:brown'>"Your reiteration of the proposed law is useful. I have looked it over
and can tell you that only item 6 -- over the selection of comparables --
seems to be going past USPAP. AND, I AGREE that this PROBABLY
should not stay in the bill."</span>
<span style='color:darkblue'>It appeared to me that several items of the proposed bill are clearly redundant of USPAP -- just much less precisely written (i.e., a bit amateurish). As such, much of the bill appears to me to be little more than "filler." It appears to have been included for no other purpose than to misdirect attention from the "substantive parts" of the proposed amendment (that might be giving the benefit of the doubt, though). It does however serve as additional -- but unneeded -- confirmation of the likely real intent of the "substantive part."
Regarding the substantive part, you appear unsure whether item 6 should stay in the proposed bill? </span>
<span style='color:brown'>"I am actually surprised about all the venom over this."</span>
<span style='color:darkblue'>Then you may not really understand what is happening, Brad. But then, maybe I'm wrong. I am calling it as I see it and that's based on what I have seen over the last few years. "Dooctor, my eyes have seen..."
I would ask you to go back and
very carefully reread Steve's posts in this thread. He's nailed it. Yes, I have some knowledge of this board from speaking with numerous appraisers over the last three years -- one of whom has been through the IL disciplinary process. Outrageous. I wish I were at liberty to elaborate. In short, the OBRE is giving the NCAB a real good run for its money and also for its title of distinction.
I've considered these issues in depth for several years now and regularly consult with others who have done the same. I have not only attended numerous board meetings and hearings, I was a respondent at one such hearing, and likely have more in store. I will be testifying as an expert witness on the behalf of an excellent NC appraiser maybe as early as this next month. After having conducted a near exhaustive USPAP Standard 3 Review (man, wait until he gets my bill), I can say without equivocation and without exception that the NCAB is embarrassingly wrong again -- and also again, wrong at great expense to a good NC appraiser. (Don't get me wrong, they're every bit as bad at letting the guilty go free -- often without ever even filing charges.) Brad, it's basically all the same issues with several of the nation's state appraisal boards -- few real differences, and none of significance -- just the details. I would ask that you consider rereading my posts in this thread too.</span>
<span style='color:brown'>
"Would you NOT like to see them hang those folks who are just
out making numbers by choosing comps outside the market,
mislabeling their locations, and by doing so, producing misleading
reports?</span>
Brad, a misleading report is a misleading report. When it exists, it is documentable and provable to a panel of experienced, judicious real estate appraisers serving as jurors. Are you suggesting any of this proposed bill is needed to accomplish these ends? Which sections or items do you see as likely being key to this goal that are not already part of USPAP? I might ask that you do a little better than the following:
<span style='color:brown'>
"How about the ability to duck lender pressure by saying,
'No, I cannot use that comp because it is out of the market
area and it would cause me to break the law.' ? "
____________________________________________________
"But, you might get what you wish for. If you do, will we expect
to see no posts complaining about the number makers?"</span>
There's an even better way to fix the numbers makers: If any complaint is filed to the I OBRE, suspend or revoke the appraiser the very same day. That would be even more expedient. Are there any unforeseen potential downsides to this approach?
<span style='color:brown'>"I know most of the IL board members personally, along with the state
director and some investigators."
"From my experience with them- and it is considerable- they are
honest and ethical folks trying to do a difficult job with inadequate
funds and time."</span>
<span style='color:darkblue'>I read that
"inadequate funds and time" comment and you may be on to something, we'll get to that in a minute. And I certainly agree it is a difficult job to do well -- It's sure not for most. Maybe five percent of the appraiser population in a given state is up to the challenge.
In life, friends and acquaintances are often supportive of each other. Hopefully that's not a crime -- even in appraising (while Steve makes a good argument we could still improve for the sake of professionalism, if nothing else), but we try to avoid appraising each other's real estate just the same. We're mindful of the potential for bias, or even the perception of bias. Rightfully so; rendering unbiased opinions is our objective. But bias at some state regulatory and disciplinary boards is a real big problem -- and not just because the judged and jury are competitors of the accused, as has been previously pointed out here by others on the forum (e.g.,Terrel Shields comes to mind; by the way, read:
http://appraisersforum.com/forums/viewtopic.php?t=1023 when you get a minute or 200, or so, as it is a pertinent post to these discussions; but be forewarned, unlike this thread, the "
word limit per post restriction" was not strictly enforced there
).
One of the biggest reason bias is such a problem is because the prosecutor, investigators and the judge & jury are all acquaintances, if not friends. (They rout for each other and have a common goal -- to get rid of bad appraisers -- problem is, several of them are known or suspected bad appraisers.) In NC, our board members are always MVPs on the prosecution's team each and every hearing. You should hear the lame questions asked of investigators regarding obvious inadequacies and errors exposed about their investigation work. The prosecutor and the investigators are biased: The prosecutor is an advocate for his or her position (while rather inappropriately referred to as "the State's position") that the accused is wrong (i.e., guilty). The investigator reports to the prosecutor and provides much of the basis for the prosecutor's opinion of wrongdoing, and he testifies for the state's position. He is therefore biased. Board's members tend to side with their friends, "When in doubt, convict." Don't believe it? What percentage of cases are dismissed after a hearing in the State of Illinois?
Board members sometimes miss the bigger picture as hearings can be very confusing (i.e., Very Confusing) and are complicated by misleading and incompetent evidence presented at hearings by Board Staff. This will be happening more in Illinois if the bill is passed as written with the part on comp selection being a good example. Steve is exactly right in his assessment of the situation.
In the vast majority of cases in NC, and apparently in Illinois too, the substantive hearing charge against the appraiser is usually prosecuted by subterfuge as it is often never even mentioned, let alone included as an official hearing charge -- The Valuation. A final impediment to justice is that board members not only do not know the rules (e.g., USPAP) they are to enforce, as appears well demonstrated by parts of the proposed bill in Illinois, again, many board members are just not very competent as appraisers.
It would be real bad news if our NCAB board members were to have been allowed to site in judgment for the upcoming land condemnation hearing case. This is a Greensboro Piedmont Triad International Airport acquisition concern where there was a complaint filed by the wrong side of the arguement regarding the various appraisers' valuations. It would take a full day-long seminar to teach members the applicable law regarding eminent domain-related practice and valuation techniques for such unique regional properties, and that's assuming they would pay attention and try to understand. Even then you're not half way there because several of our members had no intention of being fair and unbiased when they thought they were going to be jurors. That's a fact. What's an additional concern is that our board members would not have even considered stepping aside due to their lack of competence in the area, and there is not a single board member who would pass a serious test for the specialized knowledge needed. They think it was their decission to allow it to be heard in front of an administrative law judge, but they're wrong. That's where it would have been heard eventually anyway. Even if it was just a matter of trying to educate our members, some would be particularly poor students, after all several haven't graced a CE classroom in many a year except on out-of-town Board Member junkets (sp?). One member, an MAI, still refers to Standard 3 Reviews as "Phase III reviews." No, he really doesn't much know the difference even after many years on our board.
With all of these factors automatically going against the goal of appraisal board efficacy, piling on additional subterfuge and handicaps is ill-advised to say the least. (I will get into that issue a little more in a minute.)</span>
<span style='color:brown'>"Most, if not all, investigators are certified. I know two of them, and they
are both VERY competent, AND will refuse to say an appraiser is wrong
unless they have the proof."</span>
Well, let's let them present legitimate proof then. I would suggest all at the OBRE also read Steve's prior posts; short of that, here's a summation from a post or two ago, which I could not agree with more:
<span style='color:green'>"The problem is these rule changes make even the best appraisals
subject to prosecution."
These new changes Illinois is trying to enact are poorly thought out
and have little theoretical bases. They are being enacted to prosecute
appraisers faster and cheaper and without a paper trail. That is the
bottom line. We do not let our police on the streets work out side the
law. Why in the world should we let these State Boards work out side
our law, which of course is USPAP? </span>
<span style='color:darkblue'>Brad, what do you see as being the problem that the OBRE s attempting to address? This is a sincere question to you. Maybe you have already answered it. You cite "inadequate funds and time." We may be getting somewhere now. These may be very legitimate concerns.
It could be that this is what needs to be addressed. If there are inadequate resources, this must be fixed. I will however offer the caveat that more board staff and higher fees to appraisers is not necessarily the panacea it may seem; the NCAB must be one of the most ineffective appraisal boards in the entire nation while quite literally -- and by definition, being -- a multimillionaire with over $2,000,000.00 in excess funds on hand and counting.
The proposed bill appears to be aimed at expediting the disciplinary process. Do you not agree? If not, what do you see as the Board's rationale? Steve suggests it likely will do this, but at great expense to the pursuit of justice. Justice is the purpose of such a board. No joke, it really is. He has already provided some of the reasons. I may provide some sections of transcripts or a "fictional, but accurate composite" of transcripts to better demonstrate how this all works if I get some more time before long.</span>
As to the exemption under STD3, this is not new. It existed under the
former state director, Larry Bullock. There are reasons for it. I am not
sure you will agree, but there ARE reasons. Why not call Mike Brown
over at the OBRE office in Chicago and ask him?
<span style='color:darkblue'>No one would doubt that their ARE reasons. I don't know Mike Brown myself -- probably a real nice guy who might do anything for a friend -- but if he happens to be anything like those at the NCAB, there's no reason to ask him. Their answers are self-serving nonsense (a.k.a. lies). If you have an idea what the reasons may be, many of us would like to hear. Maybe there are some legitimate reasons no one here on the forum has considered yet?
But please don't get confused here: There is No Justification for an appraiser not to adhere to USPAP (except regarding legitimate cases for Jurisdictional Exception which is NOT valid here) and particularly its Standard Rule 3 when critiquing / challenging a fellow appraiser's work product (Outrageously Unprofessional -- boy the accountants & lawyers are going to love this -- we truly are our own worst enemies as a profession); and even more particularly at disciplinary proceedings under the authority of the state where a United States Citizen's Livelihood and Reputation is at stake. Do you understand that, Brad!? Sir, this is beyond mere derelict behavior. I will show you that it can be criminal behavior in just a minute.
Please correct me if I'm wrong: In the past, I believe Illinois board members took the stance (as in NC) that their investigators (who, as you say, are appraisers) could bypass USPAP if they investigated, reported and testified ONLY to actual concrete Facts Found (e.g., the sale was recorded on 2/4/2000 per public records, it is brick; built in 1976, etc.). For this type of investigation and testimony, a barber or florist or bricklayer, etc., would workout just fine as a board investigator -- and could do so legally as well. The theory was that so long as the appraiser-investigator only provided this limited service to the process and specifically did not render (i.e., report or testify to) any type of personal/professional judgments (i.e., "Expert Opinions" per hearing & court room terminology -- such as "Comp #2 was not comparable in my opinion") that the requirement for Standards Rule 3 would not be applicable. And they were probably right about that.
The problem is this is not what occurred. Investigators were very regularly reporting and testifying in areas of appraisal practice that very clearly required appraisal-related expertise -- in of all things, even regarding the propriety of an accused appraiser's decision process and ultimate choice of comparable property selection, as well as the appraiser's adjustment amounts and methodology -- which are obviously tasks requiring an appraisal license / certification, and an adherence to USPAP; and most especifically an adherence to Standard Rule 3 compliant work. There is much more to this and I will omit all the legal implications, even beyond USPAP and Std. 3, which were/are very significant.
The Illinois appraisal board members and part of their staff (I would imagine the IL. state legislature has nothing to do with it, but may well pass the bill if they are left unaware) are attempting a cheap, obvious-as-hell stunt. You see, if comp selection can be reduced to clerk work --
"I just checked the list, guess what? -- the respondent's comparables are all wrong," then they believe they can again circumvent the USPAP. Now this determination can be made by the barber or the appraiser-investigator. They believe this will be the new cleaver trick that will allow them to continue as before -- to present no evidence, or incompetent evidence, or bogus evidence against an accused appraiser (at the last minute at the hearing); and also allow them to continue to charge an appraiser for a serious offense without having done any legitimate investigation to validate or justify the charge prior to filing the official charge (hey, girls and boys, you get one of these in the mail, you hire a lawyer and also plan on cancelling your work calander for the next few weeks or months); then, if needed, they can back peddle real hard if the matter actually proceeds to a hearing in desperate efforts to justify and prove their previous unfounded proclamations of guilt -- and yes, regardless what they may lie, the Appraised Valuation will be the real (but normally unspoken) significnt charge. Like always, they will then continue as before in preparing for the hearing by running the apprasial process in reverse from preconcieved conclusions on back to finally arrive at the "needed facts" to support their hearing charges which were made with no basis many months before. These decissions were actually based on a hunch or a friendship or a designation or just the word of the complainant. It's also particularly convenient that they can thus easily dodge Due Process too by not having anything meaningful to show to the accused for pre-hearing discovery, and all with no concern for any accountability or retribution. There are additional outrages, that take some verbage and this post is way too long already. Here's the point: THIS IS BEHAVIOR OF THE ABSOLUTE WORST OF APPRAISERS. IT IS ALSO A FRAUD. THE COSTS TO THE INNOCENT ARE TREMENDOUS. (And keep in mind, the same thing happens the other way around with those they let go -- THEY'RE LET GO AND NOT CHARGED ON NO LEGITIMATE BASIS EITHER OTHER THAN BIAS (arbatrary & capricious), AS NO LEGITIMATE, DOCUMENTED INVESTIGATION IS PERFORMED.
Please understand this: Such appraisers who would allow this type behavior not only should not be allowed on any board, they should not be allowed to appraise and they should not be allowed out of prison.
A little strong? Well maybe. Maybe not.
Brad, I very well understand an appraisers' wishing (i.e., "needing" ) to stay on the good side of those who hold their future in their hands, as well as their employees' futures and their children's future, and on and on. I have read some of your posts including some on the NAIFA Forums in the past and know you to be very level headed. My advise, which I have given many times before to those in the situation, is to "just stay off the record." No one is asking anyone to be a hero, but rather, just to be very careful not do any damage to the cause. If I ever had the option, I would have taken this advice myself in a heartbeat. I never had any option at all. The NCAB mugged me and set the stage to do it again as soon as possible. They fraudulently found me as guilty as they could without having to "publish me" (in the disciplinary section of the APPRAISEREPORT, our newsletter -- because they did not want the story out!). They also attempted to gave me a three year probation period (never before done in the entire history of the NCAB for anything like the Administrative Warning I was given), and their Sentencing Order also specified that All These Hearing Charges could be brought back up and added to any future offense they could dig up or manufacture on me (again) during this probation period. Its all in writing and all at the Wake County Courthouse. Are you getting this, Brad? They broke the law at every turn and even sabotaged any chance of an appeal by more unethical tactics. They also conspired to mislead the public about the complaint that I filed regarding the behavior of their deputy director in the matter. The NCAB will deny much of this. I could not care less what they deny. By the way, the
appraising was clearly exceptional under the circumstances and saved an elderly couple from being ripped-off of $50,000. The
report wasn't perfect, but I have never done a perfect report -- even though that one was pretty damn good. They then ignored the countercharges against the offending appraiser who filed the charges against me.
It is not unlikely that I will never meet you and therefore I am even less concerned about making much of a case to you about my situation with the NCAB, and I would imagine you are not interested in hearing it. I write this to help you understand what I am about, and also what others are about who have been through the same thing but have chosen a different course after their own muggings out of concern for their families and associates and/or their devalued careers (e.g., higher discount rate for an increased element of risk).
Actions speak much louder than words (and NCAB words mean less than nothing anyway): The current NCAB as much as told me I was going to be unlawfully and unethically remove from my chosen profession, and that they would also damage my reputation while they were at it -- and also that there was nothing I could do about it. And they are largely correct about that -- The height of criminal activity. Here's the point, It's a lot easier to take the high road when you really have little to lose, right? (On the other hand, I do have a somewhat above average track record for public service over the years, and I have rarely had a "higher calling.") There are some heroes in the picture, and I will always be very grateful to them as all appraisers in the Southeast, and maybe the entire country should -- Their efforts have often come at significant personal costs as well as longterm risk.</span>
<span style='color:brown'>"Some posts have decried the lack of ASC oversight. The ASC is limited
to making sure the state law conforms to FIRREA and it applies ONLY to
FRTs- not to transactions outside title XI of FIRREA."
"But one post suggested that these folks must have courage and not be
cowards. The folks on the IL board are not cowards nor is the chief
appraiser for the ASC, Dennis Greene." </span>
<span style='color:darkblue'>You may be partly referring to one of my recent posts in this thread, Brad. I have never been any type of ASC detractor. However, we probably all could do better. Some thoughts by the Appraisal Institute can be found as a footnote at the end of this post. My thoughts on the ASC's situation have not changed since last year when I wrote the following as part of a response to a post:
"The ASC has a real tough job. Think of a high school teacher with your
typical class. It's not such a bad analogy for the power hierarchy and the
dynamics. She's good since she learned to be as much child psychologist
and diplomat as instructor to lessen her time as disciplinarian. So
remarkably civilized and mature [state appraisal boards] as a whole, but
every year there's always the troublemakers and clowns...
A few years back, the ASC wrote and politely asked the current
NCAB crew to kindly quit overcharging NC appraisers by $50,000 a year
and saying it's for the National Registry while pocketing the cash.
Our Board's answer? 'We'll think about it.' They're still thinking."</span>_______________________________________________
<span style='color:brown'>"I would be very careful here. IF IL fails to pass a law that conforms to
FIRREA, the ASC will decertify every licensee until the law is fixed."
"Dennis Greene made it abundantly clear that IL is not in conformance;
hence the change in the law."</span>
<span style='color:darkblue'>From reading Steve's most recent post just now, it sounds like an Illinois Judge may have had a hand in it too. I've never met Dennis Green (I missed the hearing he attended in NC), but I do believe he may have a tough job for anyone to perform excellently (which is probably what we are going to need). I think the ASC as a whole may be making some good strides towards adjusting to the apparent requirements of the challenge. At one time, Mr. Green or someone in charge there probably let the NCAB "off the hook" pretty bigtime at the last three year audit of the NCAB when for some reason his published report omitted the less than flattering observations he apparently made in an oral report to the board regarding our board's enforcement and conviction methodology. It was a big coupe for the NCAB who, as typical, mischaracterized his comments to the entire state for their own propaganda advantage. I previously posted on what the NCAB had to say about the raving review they got from the Federal Government. But we understand there can be all kinds of well intentioned reasons for such an omission as I perviously cited from my old post. Oklahoma appears to have called the ASC's bluff a while back regarding threats of sanctions to the state for not correcting its oddball licensing ideas. The ASC will not be able to make everyone happy, that's for sure. I hope they ultimately answer to themselves -- its really the only way to go these days. Don't depend too much on others, and don't pass the buck if you can avoid it (but of course, keep your head down when and if you can).
I believe the ASC just recently took a wise and courageous stance by instituting ASC-Certification of USPAP Instructors.
I am hopeful we will see more. The fact that Enforcement of USPAP will always take precedence over the Instruction of USPAP is axiomatic (was that redundant?). Appraisers have no choice in this situation. I personally believe that rigorous mandatory ASC testing of appointed state Enforcers (i.e., board members) will also be required of the ASC for them to fulfill their Congressional mandate for effective oversight.
Well, looks like I am going to be a little late on a report delivery date (you got me going). Check out my website before long if you haven't all ready. I had very much hoped to avoid it, but I can see there's really not much of a choice now. Squelching information may be kindhearted, but it's also cowardly and kind of irresponsible from a "greater good" standpoint: Summaries of our some of our NCAB Board Members' own Appraisal Disciplinary Records will be up soon (probably appearing here first though), and also the results of the first Criminal Background Check conducted on one of our esteemed board members has been available to me for over 18 months, and now will be published. I think I may have heard the NCAB is about to make late report delivery a disciplinary offense in NC? Maybe just a rumor, or may it's already law, I don't know. Maybe it's a good idea, maybe not -- I'd be happy if they'd just do what their supposed to be doing.
Brad (and others), like my grandmother use to write, "Sorry. If I had had more time, I would have written you a shorter letter!"
Regards,
David C. Johnson, Raleigh, NC
NC State-Certified General Real Estate Appraiser
www.boardwatch.org
</span>___________________________
<span style='color:green'>
Footnotes:
Appraisal Institute's website:
Government Affairs - Issues - Regulatory Structure
Is there something wrong with the current appraisal regulatory structure?
http://www.appraisalinstitute.org/govtaffa.../reg_struct.asp
Lack of sufficient oversight over state boards:
"...The ASC is charged with reviewing each state for compliance with the requirements of Title XI and is authorized to take action against non-complying states. However, the ASC has never exercised its authority, even where there has been ample evidence of noncompliance. The tool available to the ASC, de-certification of the state appraisal board, offers no alternatives and is considered by many to be too onerous. De-certification would effectively shut down mortgage lending in a given state. It appears that intermediate penalties to be used by the ASC against state appraisal boards acting out of compliance should be considered by Congress."
Model state appraiser laws:
"Currently, the Appraisal Subcommittee has a reserve fund with the U.S. Treasury with almost $5 million in funds that are sitting idle. In reviewing how that money might be used for greater benefit, some have suggested that the ASC use a portion of those funds to conduct a study to foster the development of model state laws for registration, licensing and regulation of appraisers. Such a study could be conducted using the knowledge and expertise of the appraisal professional organizations. There is no current model legislation available to the 50 state appraiser regulatory agencies."
Here's an extraneous tidbit from the same page I though a few here might appreciate:
"...While Maryland ranks fifth in the nation in mortgage fraud, New York, California, Florida and Illinois have larger problems in this area. These five states, those with the most egregious property flipping problems, are all “appraiser-licensing-optional,” or non-mandatory states..."</span>
