• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Question for Illinois appraisers

Status
Not open for further replies.

Lee SW IL

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Since 07/02 we are now to be putting the person that is respondsible for ordered the appraisal report. It has been clarified to me by OBRE that it should be the loan officers name on the report.

A particular AMC has refused to provide this infomation, saying they do not get that information. I have stated fine, I will wait till you do.
They have came back with the name of the CEO of the AMC. I advised them again that he is not the loan officer. I have provided them with the OBRE website and phone numbers of OBRE so they can check for themselves.


Section 10-15. Identifying client. In addition to any
other requirements for disclosure of a client on an appraisal
report, a licensee under this Act shall also identify on the
appraisal report the individual by name who ordered or
originated the appraisal assignment.

Why would anyone think that the CEO of the AMC is respondsible for ordering this report ? ? ? ? :evil:
Am I the only on having this problem. What are you putting in your report?

I have advised them I need the LO name in writing to put in the work file. They have sent the CEO's name. So since I know this is not correct, I will be adding a comment. If your using something better please share.

In accordance with Illinois Public Act 92-0189, AMC Co has provided the name of . . .

Thx
 

slacker

Junior Member
Joined
Feb 20, 2002


Section 10-15. Identifying client. In addition to any
other requirements for disclosure of a client on an appraisal
report, a licensee under this Act shall also identify on the
appraisal report the individual by name who ordered or
originated the appraisal assignment.

Thx

Lee,
<span style='color:blue'>
The "individual" could be "ABC Mortgage". In a big operation, the loan officer might be assigned after the apprasisal order goes out. Most of the orders I see are originated by an administrative assitant and not by a LO.

I wouldn't worry too much about creating unnecessary CYA if a name isn't provided.</span>
 
Joined
Jan 16, 2002
Professional Status
General Public
State
North Carolina
Slacker

What you say is true, a reasonable posiiton is that you have done what a reasonable person would have done,, no harm no foul and CYA rules apply.

The problem is when you have an overly zealous board with an unprincipled prosecutor who will prosecute on even minor violations of a bard rule to achieve the desired goal of punishing someone that they dislike.

Illinois is apparently one of several boards throughout the country who have in the past demonstrated such a characteristic.

Regards

Tom Hildebrandt GAA
 

Lee SW IL

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Slacker

How can an "individual" be a mortgage co?
I'm not trying to be a smart axx but, an "individual" is a single person.

If the appraisal is ordered, then a loan officer is assigned the account, who originally contacted the client? If client contacted the mortgage co, your saying the appraisal would be ordered before any of the information is taken from the client?

Im sorry, but I cannot understand the confusion with this.
 

Lee SW IL

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
They way it has been explained to me through NAIFA and Mike Brown of OBRE is that when an investigation of an appraisal report for fraud, ect. Since mortgage companies come and go, and loan officers bounce from mortgage co to mortgage co. Illinois now wants to see if there is an association of bad appraisals with a specific the loan officer.

I like it, no good loan officer would have a problem with their name on a report. The loan officer, gets the commision of the loan, and should also be investigaged if there are several bad loans made.
 

Joe Moore

Junior Member
Joined
Jan 30, 2002
Professional Status
Appraisal Management Company
State
Pennsylvania
I've discussed this specific issue with the board and have been told that an AMC employee's name is acceptable if a loan officer's name is not provided.


Joe
 
Joined
Jan 16, 2002
Professional Status
General Public
State
North Carolina
Lee, Joe et al

Other than it makes the appraiser do the work of the state investigators so their life can be easier, and it gives the appraiser another little rule to break, I guess there is no harm in requiring the appraiser to put in the name of a specific individual.

From a USPAP point of view, the ASB early on recognized that an organization may not want to have a specific individual identified as the client for liability or other legal reasons. USPAP allows identification of the client by a corporate name, or even maintaining the privacy of a specific client by not identifying the specific client in the report so long as the report reflects that that was the clients request and that the workfile maintains the identity.

I can not stress strongly enough that these boards that wish to vigorously prosecute when and where they chose, these boards want to levy very specific rules where the appraiser has the burden to comply, but practicaly no rules regarding the boards performance requirements.

Regards

Tom Hildebrandt GAA
 

Pat Butler

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
When I get an AMC order I just put the name of the rep from the AMC as the person who ordered it. This law just came out and if they intended that the loan officer's name be the name used, then they had their opportunity to write that into law.

The way I read it, it just says "person" and does not specifically mention the loan officer or end user. In reality, the loan officer may place the order with someone at his company in processing who places the order with an AMC who places the order with you. Another stupid law.
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Yep, a lot of these new rules are pretty dump. Especially, those in the 1455.25 section. You can thank our OBRE directly. However, there is still time to write JCAR on the matter. JCAR is the Join Committee on Administrative Rules in Illinois. JCAR has to approve the language before it becomes official. These rules are still in the emergency enactment stage. That means they have the power of law now but before they are actually approved, into law, JCAR must give the OK. JCAR's final meeting on this matter is this coming Tuesday (November 19). You guys need to write or forever hold your peace unless you want to join in a possible law suit. By the way, anyone on this form is welcome to write JCAR. Their fax number is below.

More importantly, we need to write our new Governor and get these people out of OBRE. Many do not have the judicial temperament as Tom pointed out. They want to be able to bludgeon appraisers without to much work. Why should they work when they can simply change the rules and sit on their duffs all day? It is scary, it really is. These new rules are chalk full of passing the buck and increased liability to appraisers. I am wondering how long appraisers in Illinois will take it.

FAIR wrote two letters to JCAR. We also sent copies to the heads of most appraisal organizations. In our first letter we attacked many of the rules. We were told by JCAR to focus in on one issue. We chose 1455.250 (f). Read the entire letter, 1455.250 (f) is defined within it. If you read the entire letter you will be up to speed on the issues and will not have to read the first letter.


Fee Appraisers Involved In Regulations (FAIR)
1129 North Marion
Oak Park, Illinois 60302
Phone 1-800-536-6963
Fax 1-708-524-8936



November 3, 2002

Vicki Thomas
Executive Director of JCAR
Fax: #(217) 785-8998

Dear Ms. Thomas:

We are addressing our letter to JCAR. This assures it will be part of the public record but JCAR is more then welcome to pass our concerns to OBRE. As recommended, we have dropped this matter to one issue. The issue we are most concerned with is 1455.250 (f). We would like to thank OBRE for taking the time to respond. We appreciate their effort to answer our concerns. Given their response we will elaborate on our position. In order to compare our position to OBRE's we have put their response, comments and rules concerning this issue in italic and our responses in times roman fonts. This is for ease of JCAR's reading and reduces the need to flip between letters. Further we have attached a copy of the original letter from OBRE, addressed to me, for accuracy. The OBRE states in the attached letter:

"Your first issue is with 1455.250 (f) which seeks to place responsibility for co-signing an appraisal report with both signatories. You object to this process where the original signatory has perpetrated a fraud on the co-signor. Your position is that the co-signor should not be responsible for any irregularities, mistakes or fraudulent conduct on the part of the appraiser that actually prepared the report.

The rule that has been proposed is designed to defeat just such a scenario as you are proposing. If a co-signee were able to escape liability for the contents of an appraisal report by simply repeating the mantra that he or she was unaware that the mistakes existed, then what would be the purpose of having a co-signee?. The co-signee would be meaningless.

You state that former USPAP Standard Rule 2-5 was removed because of its possible abuse by regulators. There is simply no support for that statement. SR 2-5, as a separate rule was removed in 2000; however, it was transferred to the Comments section of SR 2-3.

You attribute to us a "cut them all down and let God sort it out thinking" as a reason for why JCAR should not approve this proposed rule. Quite the contrary, OBRE is merely trying to clarify that a co-signor must remain responsible for the contents of the report. Otherwise, an unscrupulous appraiser need only enlist a young, inexperienced appraiser to sign fraudulent reports. OBRE has encountered precisely this scenario in a number of cases where the appraisal was fraudulently prepared by an appraiser who was able to prepare the appraisal, receive payment for the appraisal and totally escape administrative liability for the appraisal simply because they only signed the letter of transmittal."


We are not talking about irregularities or mistakes in an appraisal that are easily caught by competent professionals as OBRE alluded to in the last sentence of the first paragraph. We are not talking about an under supervised, under trained, staff appraiser let loose and a lazy reviewer signing every report without reading it. We are talking about fraud, deceit, errors by others in which one or both of the appraisers had no reasonable knowledge of the act nor did they have control of the act. To hold any professional to standards beyond his or her control is irrational.

The exact scenario OBRE is proposing to defeat given the manner in which they intend to defeat it, is illegal. We urge JCAR to examine Ranquist -v- Stackler, The People -v- Appelbaum, Citrano -v- The Department of Registration and Education, Lindsey -v- Edgar, Romero -v- Selcke, Trigg -v- Sanders and finally Kaplan -v- The Department of Registration and Education.

The OBRE's rules have nothing to do with putting the "profession on notice should these circumstances occur." The OBRE knows the only way they can force one part of 1455.250 (f) on the appraisal industry is by changing the law. Further, we urge JCAR to consider on October 21, 2002, OBRE lost a lawsuit to the Illinois Associations of Mortgage Brokers (IAMB) in the United States Court of Appeals, Case #02-1018. We have a copy of the suit if JCAR wishes it for review. A spokesman for IAMB told us OBRE was trying to force illegal rules on the industry. We believe they are now applying these tactics to appraisers.

Part of 1455.250 (f) states "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." This is the part we most adamantly oppose. The reason we oppose this portion is not only the scenario provided in our original letter. This rule could be interpreted to say, if an appraiser is provided a survey and the survey is wrong, the appraiser is responsible because it was used in the content of the report. If data taken from MLS is wrong, the appraisers are responsible because it was used in the content of the report and the appraiser accepts full responsibility for the contents of the appraisal. If FEMA's floodplain map is wrong, the appraisers is responsible because it was used in the content of the report. There are hundreds of examples because appraisers use hundreds of sources for secondary data. As do many others in the real estate industry. This rule would make it impossible for appraisers to comply with any degree of certainty.

The concept we are presenting is not new. It simply holds individuals responsible for their actions and puts blame for inaccuracies on the source. The courts in our country sort out this "mantra" from facts daily. The OBRE is set up as a judicial body. Why should they be excluded from weighing the evidence? The case OBRE presented of an older reviewer tricking a young trainee is misleading. OBRE approves and disapproves course work for appraisers in Illinois. Trainees are required to take a course in the USPAP. They should fully understand the process after the course work is completed. If they do not, then OBRE needs to look into what is being taught at the classroom level and correct the problem at the source not enact rules after the fact. Furthermore, the older reviewer scenario is easily detected through the judicial process and prosecution can be done to the older reviewer through Std 2-3 within the existing USPAP. Given the OBRE example, there is no need for this new language.

We disagree with the comment Std 2-5 was replaced by Comments within Std 2-3. If Std 2-3 replaced Std 2-5 there would be no reason for the rule change OBRE is requesting. The truth is 2-3 is nothing like 2-5. We have included the 1998 Std 2-5 and the 2002 Std 2-3 as an attachment to this letter for JCAR's review. As JCAR can see the comments made in Std 2-3 are related within the context of the signed certification which clearly states, "I certify to the best of my knowledge and believe the statements of facts contained in this report are true and correct." Fraud and deceit by definition are beyond the victims knowledge and beliefs. OBRE's language in 1455.250 (f) says nothing of the sort. It says appraisers are responsible for the content. It says nothing about what the signors believed, the circumstances at the time of signing or the credibility of the source of data. None of these factors enter into OBRE's language.

The OBRE poses the question "what would be the purpose of having a co-signee?". This conjures an image of one appraisers signing a loan for the other. An appraisal is not a mortgage. The purpose of a more experienced appraiser signing a report is not fraud insurance or to extract a price if something unforeseen takes place. It is to lend experience to the inexperienced. To show the appraisal was reviewed by an experienced appraiser who understands principles and procedures just as a mentor or trainer is used in other professions. A better question might be, under OBRE's new rules, what would be the purpose of hiring employees? No matter how well trained the employee or their years of experience, a review appraiser is obligated to retrace their working steps. Why would anyone hire, if they are forced to repeat the work? Further, we believe the appraisal employment market is already reacting to the restrictive nature of Std 2-3, without the sterner language currently requested by OBRE.

On July 19, 2002, in Denver, Colorado, the AQB opened the continuing public hearing on its Exposure Draft of the 2003 USPAP. An issue causing most concern was the inefficiency of getting new appraisers into the profession. The problem was training. After many potential appraisers have completed their educational requirements, they cannot find someone to train them. California (the system in which Illinois's changes resembles) reports less than 5 percent of these trainees actually getting into the appraisal business. This is not as a result of lack of business, because California appraisers, like most others across the country, are having a banner year. In a poll provided on the Appraisers Forum (one of the largest Internet appraisers exchange in the country) nearly 80 percent of the respondent appraisers indicate one of the reason they are not training new appraisers is liability and or responsibility within the process. This is currently occurring under the less restrictive language of Std 2-3. We believe the more restrictive language of 1455.250 (f), which promotes vicarious liability (by OBRE's own admission), will only serve to increase this problem in Illinois. The issue of responsibility is already over regulated as is shown in California. Finally, if this rule is enacted, as the supply of appraisers dwindles due to lack of training, the price for appraisal services will increase. These cost will be passed on to the citizens of Illinois.

We realize a formal economic impact study is not required by state law; however, has the OBRE conduced any economic impact hearings of these rules to make a written determination on whether the rules will have an adverse economic impact on the people of Illinois? As the proponent of the proposed rules should OBRE not at least describe the sources and facilities affected by the rule and its economic impact on them?

According to Illinois statue: (5 ILCS 80/1) Sec. 1., known as the Regulatory Sunset Act. (Source: P.A. 90-580, eff. 5-21-98.) (5 ILCS 80/2) "The General Assembly finds that State government actions have produced a substantial increase in numbers of agencies, growth of programs and proliferation of rules and regulations and that the whole process developed without sufficient legislative oversight, regulatory accountability or a system of checks and balances. The General Assembly further finds that by establishing a system for the termination or continuation of such agencies and programs, it will be in a better position to evaluate the need for the continued existence of present and future regulatory bodies. (b) It is the intent of the General Assembly: (1) That no profession, occupation, business, industry or trade shall be subject to the State's regulatory power unless the exercise of such power is necessary to protect the public health, safety or welfare from significant and discernible harm or damage. The exercise of the State's police power shall be done only to the extent necessary for that purpose. (2) That the State shall not regulate a profession, occupation, industry, business or trade in a manner which will unreasonably and adversely affect the competitive market". This act specifically mentions the real estate appraisal profession.

We believe the rule changes reported in 1445.250 (f) are not necessary to protect the public health, safety or welfare from significant and discernible harm or damage. Further, we believe the way 1445.250 (f) is worded will unreasonably and adversely affect the competitive market and drive the price of appraisal services considerably higher.

In the OBRE letter it also states the reason for 1445.250 (f) is OBRE has encountered a number of cases where the appraisal was fraudulently prepared by an appraiser who was able to prepare the appraisal, receive payment for the appraisal and totally escape administrative liability for the appraisal simply because they only signed the letter of transmittal.

We ask how this is possible? It is clearly written in the 2002 edition of USPAP, Std 2-3 line 1085, 1086 and 1087 "A signed certification is an integral part of the appraisal report. An appraiser who signs any part of the appraisal report, including a letter of transmittal, must also sign this certification." Please refer to the attached for a copy of the actual text. Again, the reasoning provided by OBRE supporting this rule makes little sense. It is already part of USPAP.

In closing, the original rule changes initiated by OBRE were so overwhelming and contained such bizarre language pairing it down to its existing form was exhausting to the appraisal organizations. The original OBRE's proposition drew thousands of national readers and literally hundreds of comments on websites throughout the country. There were several articles written in national appraisal publications. The overwhelming majority of comments were very negative towards OBRE's work. FAIR's members belong to many of the appraisal organizations alluded to by the OBRE in the second to last paragraph of their letter. Many of these groups are not happy with the current language. They were simply worn down by the process.

We are not here simply throwing stones at OBRE. We suggest the language in 1445.250 (f) read "An appraiser who signs any part of the appraisal report, including letter of transmittal, accepts full responsibility, under the context of the appraisal certification, for the contents of the appraisal report and any violations of the Act, this Part or USPAP contained within the appraisal report." If OBRE wants to interpret this to mean total liability more power to them. Let the appeal process within the courts of Illinois settle the issue.

Respectfully Submitted, FAIR


Stephen J. Vertin, MAI
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks