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Sam Rayburn Speech

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Red Blumenstock

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Florida
I thought this was worth sharing, particularly in view of the current action of Senator Sarbanes.

Sam Rayburn, the immediate past president of AARO (Association of Appraiser Regulatory Officials) and current Executive Director of the Kentucky Real Estate Appraisers Board delivered a speech at the National Convention of AARO last October in Washington, D.C., that is very worth while noting. The following are selected excerpts from that speech:

"After 11 years of practice, I believe that we cannot put enough band-aids on Title XI to correct all the deficiencies. In my opinion, Congress needs to restructure Title XI from top to bottom. Here are the changes I believe are necessary to restore credibility and accountability to the Appraisers Certification program:

All State Regulatory Boards should be funded through Title XI. … Far too many states could and would do a better job of getting rid of bad appraisers if they only had the resources to do so.

Title XI should contain specific language to ensure that the independence and objectivity of real property appraisers is protected and that appraisers be free from intimidation, coercion, and undue pressure.

. . .It is absolutely absurd that State Boards have no say in the education or experience criteria, or how the Standards are written, but are left with the responsibility of enforcement.
Today, everyone associated with the Appraisers certification program . . . must recognize that it is not working. The lending and real estate industries have far more influence on the appraisal profession than appraisers.

. . .Everyone claims they want an honest appraisal but they also want the option of selecting the appraiser and the freedom to keep the pressure on to make the deals work. . . . Lenders have added a new twist to the old law of supply and demand: if appraisers don't supply the number they need, they demand another appraiser.

Whether the system can be improved or whether it needs to be replaced entirely, is being debated currently. Congress, seeing the growing number of foreclosures . . . is examining whether the financial integrity of lending institutions is really being protected.

The Uniform Standards of Professional Appraisal Practice is probably the most poorly written and the most misunderstood document on the face of this earth. Once written, in simple and concise English, USPAP does not need to be changed any more than once every five years.. . . Appraisers cannot comprehend USPAP if it is continually amended, and by that I mean not only words being changed but the meaning of the words as well. For USPAP to be meaningful and understood by appraisers and users of appraisal services we must construct a meaningful document, and once adopted -- give it a rest.

Today, there are far too many appraisers entering the system who lack sufficient education and training. . . . No one has a right to be an appraiser' it's a privilege, and it's a privilege that should be earned."

It appears that others are on the same page as us.

Red Blumenstock
 
Joined
Jan 16, 2002
Professional Status
General Public
State
North Carolina
I have grave concerns about Mr. Blackburns motivations.

Mr. Blackburn uses the expression "bad appraiser" suggesting that we need to get rid of these creaturees and then chastises our only standard USPAP. By what standard is he judging appraisers? His state endorses investigator appraisers providing opinions (they call it fact reporting) of other appraisers without having to comply with USPAP. By my definitions, taken from USPAP, Mr. Blackburn would be a "bad appraiser" for allowing appraisers under him to act unethically.

On 29 September 1990, Mr. Blackburn wrote as Executive Director of the Kentucky Real Estate Appraisers Board " No investigator for a state regulatory agency should perform an appraisal or a review under Standard Three and argue their review is superior or better than the appraisal in question. A disciplinary hearing should not consist of one appraiser's opinion (the investigator) against anothers. A disciplinary hearing should not consist of the investigators presenting facts to the Board. It is the Boards responsibility, not the investigator's to decide if the respondent properly developed the appraisal under Standard Rule 1 and properly reported under Standard Rule 2."

My question to Mr. Blackburn is - If no facts or opinions are presented at a disciplinary hearing by an expert in the field of appraising, how is the Board to make a decision?

Nope, Mr. Blackburn is not on the same page as appraisers who wish to comply with USPAP, he is squarely on the side of having regulators not having any regulations.

Regards

Tom Hildebrandt GAA
 
Joined
Jan 16, 2002
Don't get me wrong (previous post above). I'm all in favor of good, logical, common sense regs, that are enforced. What we have now is
complete chaos and nonsense that is obviously not working. Our industry that is regulated by the wrong people (users of appraisals). Take a look at the membership lists of the AF, who's kidding who here ? Would the AMA allow providers of health insurance make rules for ethics of doctors ? Does the trucking industry allow the shippers of goods to make their rules ? Does the FAA allow flight schools, aircraft mechanics, and Boeing to make their rules ? Name one trade or profession that allows this kind of insanity.
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Joe:

Thank you. Excellent observation. I also agree with Tom. If Sam is indicating enforcement agencies ignore STD3 he is part of the problem. Motivations aside, I agree with most of what he is saying accept for the educational issue. I do not believe most States capable of the task. Especially ones ignoring the current laws.


Steve Vertin.
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
The real problem in our industry isn't education or enforement or how an ivestigation is conducted. Our problems are similar to what's going on in the accounting industry. To whit: We, as appraisers, are beholden to the lenders for work, they in turn are beholden to the Realtors, L/O etc, who are compensated directly on a commission basis. There is a huge disconnect going on here. I'm sure if you were to ask anyone involved in the "risk" side of the business if they wanted an unbiased estimate of value, their answer would be a resounding "Yes". The problem is they don't order the appraisal. This will only get worse until it comes to a head, then the crying and wailing and finger pointing will start all over again. I hope I'm out of this corrupt business when it happens.
 

John SRA

Junior Member
Joined
Jan 19, 2002
Red,

I have met Mr. Blackburn, and I have a deep respect for him. He has made many contributions to our profession. However, I respectfully disagree with his view on the role of USPAP. He sees USPAP only from an enforcement perspective. USPAP existed before FIRREA. It was not written for Title XI. The primary aim of USPAP is not to facilitate enforcement, but to set the standard for professional practice.

Like many in enforcement, Mr. Blackburn would like more detail in USPAP (e.g. specific guidance on applying adjustments, etc.) in order to make enforcement easier. In short, he wants USPAP to be a "how to" book. USPAP is a set of standards - it is not, and should not be, a text book.

USPAP was (and is) written by appraisers. Further, as is pointed out very well in the new instructor certification course, USPAP is written around the appraisal process and it presupposes knowledge of the process. One who does not understand the appraisal process cannot understand USPAP. Mr. Blackburn seeks a version of USPAP that a "layman" could enforce. Again, this is not the role of USPAP.

Those who speak of the many changes to USPAP often offer contradict themselves. They say that they don’t want changes, but then provide their personal list of those things that need to be changed. Amusing.

Have a great weekend

JC
 

Red Blumenstock

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Florida
JC,

I don't disagree with some of the negative comments about Mr. Rayburn's speech, but I do respect what I know of him. I'm not sure he is as far off as some peropl seem to think.

You said, "The primary aim of USPAP is not to facilitate enforcement, but to set the standard for professional practice" and a little later, you comment on what the Instructor Certification course has to say. Here I beg to differ with you. I attended the Instructor Certification Course, in Atlanta, which was taught by Danny Wiley and Larry Ofner, both members of the ASB. One of the very first statements made and often emphasized was that fostering public trust was one of the primary, if not the primary, motivation behind the adoption of the USPAP.

I tend to agree with Mr. Rayburn, that an instrument which needs to be changed every year or have the definitions changed so often is not a well written document that serves either the professional appraiser or the public. The frequency of the changes and the severity of some of them is one of the causes of confusion, not only among appraisers, but also among those who act as Instructors and attempt to explain something that they are not so sure of themselves.

I do not profess to know the answer. I do know that I hear many horror stories of what is being taught in USPAP classes. Perhaps the new Instructor Certification is intended to help and may go part way toward solving the problem, but I'm not so sure that it will, given the type of testing and instruction that is being offered.

In any event, I am sorry to hear the negative diatribe that is cast at Mr. Rayburn. I do think he makes some very salient points. He is entitled to his opinion as are we all.

Red Blumenstock
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Joe,
You ask if the AMA would allow health insurers make ethical rules for doctors. I believe about 9 years ago there was a Health Care Task Force that made a comprehensive national health care plan without the aid of a single doctor. The plan did not make it through Congress.

Red,
You refer to an instrument that needs to be changed every year. I cannot say that it needed any changes.

Also, Sam Rayburn? He used to be Speaker of the House, right? (lol)
 

John SRA

Junior Member
Joined
Jan 19, 2002
I regret that you took my posting as a “negative diatribe” against Mr. Rayburn. As I stated, I have the utmost respect for him. He is clear and professional in stating his positions, and he has made many contributions to the betterment of the appraisal profession. If I had the same background as he, I might share his philosophy.

However, I am an appraiser. As such, I look at USPAP with an appraiser’s perspective, not that of a banker or bureaucrat. I believe that many of the current problems with state boards and enforcement are rooted in a misunderstanding of USPAP’s role.

You are correct that the primary aim of USPAP is to promote and maintain public trust in the appraisal profession. However, I do not equate public trust with enforcement. Public trust arises from overall professionalism, which stems from ethical and competent practice.

For the most part, I find that the regulators who clamor that USPAP is difficult to understand are not appraisers. As I stated before, USPAP is written with the assumption that the reader understands the appraisal process. If you are an appraiser, then USPAP should be relatively easy to understand. However, if you have no appraisal education, then you do not have the requisite knowledge to understand it.

Many regulators are looking for USPAP to serve a role for which it was never intended. USPAP sets the minimum standard for professional practice, but it does not provide instruction in appraisal methodology. It is the latter that state regulators want in order assist in their enforcement activities. To enhance enforcement within the current system all that really needs to be done is to populate state boards with competent, fair-minded professionals who know and understand appraising. Instead, many state boards are populated with non-appraisers (or worse, poor appraisers).

Would one expect someone who was not an accountant to understand the generally accepted accounting practices? Yet, we expect people with little or no training to understand USPAP – absurd. It astounds me that those who enforce are not required to show some minimum level of knowledge and competency before they are allowed to sit in judgment of others.

Understanding does require some effort. In a recent USPAP class I taught I asked the students how many found USPAP confusing. About half the students raised their hands. I then asked that group how many of them had actually read ANY of USPAP since their last mandated class. Not one of them had read any of it. I can see how one can understand it if he/she has not even read it.

Like Tom, I strongly disagree with any state board that claims that it is unnecessary to follow Standard 3. In fact, I see a great potential for a major lawsuit on this issue. In the interest of basic fairness, how can a state board require appraisers to comply, but exempt themselves? The biggest argument I have heard from state boards on this issue is monetary concerns. This is simply not acceptable. If you are performing a thorough investigation, then the additional work required to document compliance with Standard 3 is minimal. Second, state boards certainly would not accept an appraiser saying he did shoddy work because of the fee. Fundamentally, there is no difference in such a statement and the claim being made by many states.

The issue of public trust extends to enforcement bodies, and I think compliance with SR 3 is a must. We must be able to trust that enforcement is done in an ethical and competent manner, in accordance with an accepted standard.

In closing, this is not a personal attack on an individual. It is simply my observations about USPAP and its proper role. I deeply respect Mr. Blackburn and his opinions. I simply disagree with some of them.

Best wishes for a good holiday weekend

JC
 
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