Proposed Changes In The Law

[Austin]

Tom: I don’t disagree with your last points. If we had a system of “PEER REVIEW” to address these issues instead of “AN INQUISITION” state board format, the problem would be solved. As I have tried to make clear, the nature of this business with all of the nuances and twist each one brings into each valuation method based on his/her market experience along with their education and experience level creates a nightmare scenario when you have a politically appointed board with power over the lives and careers of others but terribly lacking in the wisdom and experience to weld that power. You know very well whom I am referring to. The very fact that some people would allow a state board to make the statement and get away with it: “Due to a lack of funding and time constraints, we are suspending due process and constitutional rights..” suffices to indict the existing system in my mind.
I propose setting up peer review committees to deal with any questions of method and appraisal theory. Half of the committee’s job should be to defend the accused and the other half to grill the accused. If they can make a case against an appraiser, no problem, let them deal with it or allow them to recommend a course of action to the state board. If they can’t reach a consensus, that is the end of it. No lawyers, no police investigators, and a fair fight free of state tyranny. The peer review committee shall be appointed by their peers and not be political appointments. What other profession can you name that is a +++++ child of the Federal and or state governments? Here we are as a profession making decisions that affects the lives and fortunes of millions of people and billions of dollars and we are slaves to a government agency? If we can’t manage our own affairs, who wants our opinion anyway? If we want to be recognized as a profession, then lets start acting like one.

 

[Tom Hildebrandt]

Austin

Yep, I agree.

What I think needs to be done is for the regulatory agencies to have the peer review as the probable cause hearing, and if following this "peer review" the issue is not settled, it would be refered to an actual formal hearing heard by a judge. I would suppose that this would mean that none of the "evidence" developed at the probable cause would be admissable at the formal hearing.

How to correctly constitute the "peer rview"is the other side of this problem. And I think we can agree, that would be the toughest nut to crack.

Regards

Tom Hildebrandt GAA

 

[Stephen J. Vertin MAI]

Whether you believe or not, I think the reason this trash, trying to pass as law, sticks so deeply in most of our throats can be summed up quickly in the good book.

Leviticus 19:15. Ye shall do no unrighteousness in judgment: thou shalt not respect the person of the poor, nor honor the person of the mighty; but in righteousness shalt thou judge thy neighbor.

Unrighteous is defined in the dictionary as: Contrary to law and equity; unjust; as, an unrighteous decree or sentence. Where is the righteousness in laws made to be enforced but not followed by the enforcer? This is the epitome of unrighteousness.


Steve Vertin

 

[Austin]

Steve: Good point. Nothing good is ever born of an evil spirit. “Ye shall know them by their fruit.” The entire appraisal regulation concept was born of an evil spirit. First of all, the problem that drove appraisal regulation was a failure of the political leadership in Washington. They caused the problems with the new tax laws of 1986, and used the appraisers as the scapegoat. USPAP and most appraisal regulations are based on the assumption that all people are crooks and the underlying principle in USPAP is: “Ok crooks, let’s see how you can cheat with this mill stone around your neck.” USPAP in spirit is nothing but a veiled attempt to close all of the avenues the crooks used to cheat based on this assumption spiced up with a few goodies to make it taste good. I see it as a flagrant insult to the character and integrity of appraisers in general.
No profession can exist that does not have a body of knowledge, a high standard of ethics, voluntary compliance, peer control for self policing, an organized professional governing body, and a process that encourages and implements the development of new ideas and concepts. The present government enforced system has none of the above. To the contrary, the present system does the exact opposite. It has turned the appraisal profession into a legalistic ritual of forms, legal procedures; meaningless high-sounding certification documents, and has created a class of professional hoop jumpers and form filler-outers. What started out as a house of worship, the politicians have turned into a den of thieves.
There is another way of looking at all of this. If the appraisers are as bad as the present system implies, then what does that say about the government regulatory boards that set up the criteria by which these appraisers were educated and licensed? What does this say about the moral character of the nation and the political leadership that set the example for the moral standards of the American People? If these government agencies are so smart, than how did all of the crooks and idiots get an appraisal license? Maybe we need to hold an “inquisition” for some selected state appraisal boards.
In summary, the underlying problem is a total breakdown of moral values and nobody can be blamed for that but the ruling elite political class in this country. You can’t cure low moral standards with more government regulations. I say scrap the whole process and start from scratch in the right spirit.

 

[Stephen J. Vertin MAI]

Just got this notice from my local chapter. I would like to publicly thank AI, ICAP and the Guild for getting involved. While the letter from AI was up beat it appears not much was done. Illinois is still pushing for removal of Standard 3 reviews by investigators, auditors and examiners. The letter from AI reads:

OBRE has released the Final Draft #6 of the Appraisal Rules, which will become part of the Illinois Appraisal Licensing Act of 2002, effective July 1st, 2002.

The Rules are now posted on the Chicago Chapter of the Appraisal Institutes website www.ccai.org. Please take a moment to download and read the Rules. Pay particularly close attention to pages 11 thru 14. There will be many new supplemental standards above and beyond USPAP that we will have to comply with.

OBRE released Draft #5 to the profession last week for comment and ICAP, the Appraisal Institute and the Appraisal Guild met with them to discuss our concerns. It was a good exchange and all of our concerns were addressed. OBRE made some changes based on our comments.

In regard to carrying a pocket card ID: OBRE said they would change the
language to state that you only have to carry the card when performing
appraisal services, but that's not the language that ended up in the final
draft. It still says that you will have to carry the card AT ALL TIMES.

In regard to the new supplemental standard to perform a three-year history search on all appraisals: OBRE originally said they would remove the words AGREEMENT and CONTRACTS from this Section. They did not. Instead they included an additional line at the end of the section stating "if such information is readily available to the appraiser in the normal course of business".

We suggested to OBRE that they remove or rewrite Supplemental Standards #1 and #6. There was some rewrite to #6 but it still defines what a comparable should be. You will have to explain every line item adjustment, even the most obvious ones to some degree. This Standard was more restrictive in it's original language in Draft #5. Ed Williams (OBRE Prosecutor) is doing his best not to force specific elements of comparison on the industry by softening up the language, but it's still far more aggressive than USPAP. #6 would seem to pose a big problem for commercial properties because its language appears to be written more toward residential properties. How will OBRE interpret this Rule
for commercial property?

Supplemental Standard #1 presents the biggest problem. It does not allow for self-study to gain competency. We are not sure how OBRE will enforce this standard. It sounds like every time you appraise a property in a geographic area you have never worked in before, you will have to have the appraisal signed off by an appraiser who has.

We suggested that the Section on maintaining an experience work log be removed. We fail to see the purpose for such a burdensome requirement. OBRE did not act on our suggestion to remove or rewrite the section on Experience Work Logs.

Please pass this draft along to as many appraisers as possible. Everyone needs to be made aware of these proposed changes to our law. It's a double-edged sword. We want OBRE to have a strong law to get the bad guys, but it can't be too restrictive or else it affects and burdens the profession far more than it needs too.

There will be a 45-day comment period for anyone or any organization to respond to the Rules before JCAR (Joint Committee on Administrative Rules) makes them part of the law. The Chapter will notify our members by email when the 45-day period begins. The target date is April 12th. No comments - means - no chance of change. It's now up to the industry to decide. Email your comments to: laanderson@ccai.org


Chicago Chapter

 

[David C. Johnson]

<span style='color:darkblue'>Steve,

The OBRE may be on to something:

If compliance can be made onerous enough and irrational enough that the majority typically fail to comply, the majority will typically be guilty of noncompliance.

A guilty population renders the OBRE's job both easy and fulfilling as it allows for shorter days, while improving conviction numbers.

Most important, the OBRE can now more strategically and conveniently "pick and choose" among the population (i.e., the guilty) for whom to actually prosecute and find guilty.

Now that's power. Power is satisfying. Power is fun.

_________________________________

But the NCAB is better. They're smarter.

Their newsletter came out today, mailed to 4,000 addresses across the state at 33 cents per copy. And it details a whole slew of new Board Rule Changes (i.e., amendments to state law), but not all of them:

"Many other important changes have been made to the
rules in the area of education. All appraisers are
encouraged to become familiar with the new rules
before they go into effect. Contact the Board's office
to request a copy."

Were the remainder of these "important changes" just entirely too voluminous to include in today's mailing? Or to post to the Board's website?

Guess so.

Wonder if any of the state's appraisers might negligently forget to "request a copy" ?

If so, some might find themselves to be noncompliant (i.e., guilty).

See what I mean? Always thinking ahead.

Our board is smarter than yours.


Regards,

David C. Johnson</span>

 

[Pat Butler]

I'm in Illinois too and had brought up the Standard 3 exception with Larry Bullock at one of the "Meet the OBRE" seminars a few years ago. Maybe that was the first time the issue was brought up, because Larry very nervously answered the question- and not very well at that.

An ICAP representative spoke at the meeting and I was very unimpressed with his organization. The ICAP people were too chummy with Larry Bullock and it seemed to be too close of a relationship to get anything accomplished. Larry Bullock, now retired, is now an ICAP member! Considering the opposing goals that ICAP and the OBRE should have (protect the appraiser vs. protect the public), I can't see why their relationship isn't a bit more restrained. And our current leader Mike Brown got the position as a political manuever and has no appraisal background. So the head guy is the least competant. Figure that one out.

The irony of all of these enforcements issues is that the definition of market value includes our "opinion." By defintion, that would allow for differences (in opinion.) Of course that definition was changed from "estimate' to exempt AVM's from USPAP.

Pat

 

[Stephen J. Vertin MAI]

Pat:

I am glad you pointed the ICAP and Board relationship out. I was going to say something awhile back, but given the response from my comment about STD3 and ICAP in the above post, I figured I would let it go. Larry is not the only past Board member now on the Board of Directors for ICAP. I have been talking to heads of appraisal organizations in our State. They feel they are in a real dilemma. Many members of AI do not want to oppose this bill because they want to stay in good standing with the Board. In my opinion this is short term thinking. We have an election coming up and there is a good chance the current administration will be through out on its ear. You are well aware of the Governor Ryan situation and the damage it has done to republicans. All this good standing built-up with current Board members will not mean jack if a whole new Board comes into being. However, we will still be stuck with these B.S. rules as laws. What I find amazing is for the first time in history prosecutors, which are effectively lawyers, are writing standards for our profession. All of the organizations stated they felt, Ed Williams lead prosecutor for the Board, had a very heavy hand in writing these new laws.

Pat I can not figure out why Illinois appraisers are not ready to burn down the gates! Could you image the out cry if the insurance industry was trying to write professional standards for doctors? Or if the police where trying to write professional standards for lawyers? It is my opinion that unless a grass roots movement, by appraisers, for appraisers, is not started, much of this crap will become law in our State.

I wish I could figure out away to contact a large number of appraisers in our State letting them know what is going on. Further more I would let them know how to write or speak to the JCAR (Joint Committee on Administrative Rules) within the 45 day period that is about to open. It is my opinion, our organization are watering down most of the concerns, at least in public. It is not because they are bad people who do not want to do the right thing, it is because they have to work with the Board in the future. However, they are privately saying this Bill stinks. If I could figure out how to contact a good percentage of Illinois appraisers I would come out of pock to do so. If anyone has any suggestions I would love to hear them.

Steve Vertin

 

[Pat Butler]

Stephen-- I think a new organization is needed. I can't remember the exact number of appraisers in Illinois, but it would be somewhat affordable to mail to them. I've never had any interaction with OBRE but have talked to at least 5 or 6 appraisers who had. I can tell from their experience that the process is not anywhere near fair for the appraiser. Even at that "Day with the OBRE" seminar, Larry Bullock talked for hours about the enforcement process. His attitude was very aggressive against the appraiser. He pretty much bragged that the enforcement process would become so expensive, and risky, for the appraiser that they ended up getting almost every appraiser to agree to their consent decree. He said it would sometimes cost near $5,000 to prosecute an appraiser. Imagine doing a $300 appraisal that is due in 2 days. Then imagine defending your appraisal against someone who has months to prepare and $5K to do it! He was basically bragging about how unfair the process was!

I was suprised at that meeting that the appraisers in attendance just didn't walk out. During the breaks, and at lunch, all of the appraisers were po'd at his attitude. If that didn't bring appraisers to action, I'm not sure what will.

It's the same old problem of not having an organization that really places their efforts where it is needed. I read some of the stuff put out by the Appraisal Institute and have to laugh. Their doing all sorts of stuff overseas, like in China, and creating data bases from their members data-- yet their legislative efforts aren't targeted where they are needed.

The only practical thing I could see is to get a group of appraisers together to support an innocent appraiser through the enforcement process. It just isn't practical for an appraiser to fight the OBRE in the courts. If an innocent appraiser had financial backing to go to the courts then perhaps a lot of the 'Rules' could be deemed unenforceable. Right now, no one takes the OBRE to court.

As an aside, I can't believe that OBRE is trying to come up with a definition/process of finding comps. It all depends on what data is available. I can see huge problems for rural appraisers where typical time and proximity guidelines have to be exceeded.

Frankly, I've started to really take advantage of 'extraordinary assumptions' as allowed by USPAP, for a liability reduction strategy. Imagine putting something like this in your report-- "It is assumed (extraordinary assumption) that all of the data and methodology in my appraisal complies with all laws and regulations- even if it does not. The user of this report is to assume that everything complies with all laws and regualtions" Now, how can that appraisal ever be shown to not comply with some arcane law adopted by OBRE?

Pat

 

[Austin]

Steve: Sooner or later the market will take care of the problem. For example, you have heard my horror story about my experience with the NC appraiser board. I live and work in Virginia, but our town and county is tangent to NC, and our suburban area extends into NC. There are no large cities within 50 miles of this rural area of NC. I didn’t renew my NC license because I had had all I could take of their crap. Now there is no one to appraise in these areas. My father was an appraiser and he called me the other day begging me to please do an appraisal for one of his friends. He has been retired since 1983, and this person in desperation called him to do an appraisal for her. She had to have an appraisal fast because she needed to refinance due to an illness. I said where does she live? He said in NC just outside of town. I said, no way, I can’t do it. He said she has tried everything and can’t get anybody down there to come up to this area. I said, sorry, ain’t my problem. If the NC Board ain’t concerned about it why should I be. I received 4 similar requests this week for appraisals in this area of NC. They all ask, “Can you refer us to some one down there? My answer is nope. You can call Raleigh, 75 miles away, or Greensboro, NC, 50 miles away and look in the yellow pages.
If you get assignments in which you can’t find the right kind of comps, just don’t take the assignment. There is plenty of good easy work out there. If you have a good reputation as an appraiser, you will end with all of the easy assignments and the lackeys will get the crap assignments. They will get the message sooner or later.