TAF's Industry Advisory Council

[George Hatch]

As I read both of your posts what I get out of them are (as usual) the standard objections to the licensing requirements placed on appraisers via FIRREA. I think your primary objections are the "compelled by regulation to comply" aspect more than an objection to the idea of appraisers asserting certain very basic minimum standards.

The fact that users of appraisals aren't always compelled to use licensed appraisers is acknowledged by virtually everyone. I would think it something that Roger (in particular) would encourage, given his belief in open competition in the market.

There's always room for another set of appraisal standards, and to be honest I don't think it makes all that much difference who is in charge of those standards. The primary benefit of any standard of practice is the degree to which it more or less levels the playing field for the appraisers and users of appraisals who refer to it.

I mean, had one or the other of the predecessors to the Appraisal Institute or the ASA or the ASFRMA of even Fannie/Freddie been given the nod by Congress we still would have had all the basic requirements and concepts for ethics and competency. We still would have had a management rule and a confidentiality rule that is more or less the same as is found in USPAP.

If another standard did come to dominate the market, I'm sure it would have quasi-religious zealots like myself out there stumping for it. I'm equally sure there would be some members of the loyal opposition, like you guys, constantly nipping at its heels.

Likewise, the degree to which those standards are enforced would be the primary measure of success that most observers would apply. Enforcement is always the weak link, whether the standards in question relate to appraisal practice, traffic safety, civil conduct in society, religious piety, or even your average game of Monopoly.

That being the case, I think it just as likely that Roger's "Best Practices Standard" would still face the same measures of performance that gets applied to USPAP, and would still likely get a similar grade, even if it was technically superior. The dance would be the same, only the costumes on the dancers would be different.

 

[Pamela Crowley (Florida)]

"Residential and Commercial Real Estate Appraisal" in my opinion, should be just that and it alone should be regulated. But with that regulation should come the explicit requirement that no lender, no bank, no one who ever got a dime of bail out money, should be allowed to use anything but a certified or licensed real estate appraiser. No BPOs, no CMAs, no AVMs. none. nada.

And that is not going to happen because too many AMCs and AVMs are making too much money that rightfully should be spent on a human examination of a property. We are rapidly approaching the stage where everything that can be automated and integrated is. And done so at very little cost. We appraisers are being displaced by computer technologies which today are about 50% accurate. In the future, they will get better and better at vetting a property. Eventually, there will be no place for a "real" human appraiser except in a court of law and likely only then to explain the appraisal model...

Thank you, Terrel.

No law, rule, regulation will work without enforcement. If ALL participants were absolutely held 100% responsible for their part of every transaction they were involved in, all would be much more careful.

Societies need laws, rules, regulations to function and thrive. This MUST include law enforcement and personal responsibility for ones actions. The breakdown of a society can be measured by the lack of law enforcement and the convoluted messes that result in more unenforced / unenforceable convoluted laws being added to the exisiting ones that are never enforced already. Greedy special interests pile on to make new laws that will put more money into their own pockets and/or to cover up their activities.

An appraisal license is barely worth it anymore. The compensation is NOT commensurate for the liabilities. Too many of the Advisory Council members of TAF, ASC, AQB are the reason for the decimation of the Real Estate Appraisal industry.

I sent in a question about the comp check issue years ago. What they just recently did in their Q & A ignored what I wrote and addressed it so that the comp checks will still go on as before.

Disgusting.

 

[Carnivore]

I guess it pays to cough up the $2500 and get on the council huh?

Maybe we all form a group, pick a rep like Mike G, Lee or Geroge and pay the $2,500 to join plus the persons expenses.

It's clear to me that outside the AI and NAIFI appraisers as individuals have no voice. Inside those orginizations, like AI, asscoiates dont have a lot of say.

The ideal organization is the NAR -Appraisal Division. http://www.realtor.org/Appraisal Biggest Bang for the Buck!

Other then that individual appraisers have little to no voice and almost zero influence.

 

[Bill_FL]

I was on the ASB from from inception to adoption of the SOW Project. I can tell you definitively that the removal of departure was not driven by lenders. Most lenders supported the concept, but they did not ask for it.

I have expressed crticism of TAF actions to many on this Forum. However, one of the great strengths of the Foundation is that it actively seeks input from ALL.

During my time on the ASB my views were often influenced by people like George (and many others here) who took the time to provide input on proposals. That input was invaluable and highly appreciated.

I can also say that some of the loudest critics in this little community never sent one letter or email. If one wants his/her views known, one has to participate.

I would never say that politics and agenda don't play a role. No group is free from such things. However, having served on the inside, I can say that there are far more agenda and conspiracy theories espoused here than have ever even been thought of at the TAF.

Danny, I supported the move to the SOW - I like the idea. It is as I have said here many times (probably why I get negative rep points) that it allows appraisers the flexibility to provide a product that is actually wanted by our clients in a clear and concise manner. I wish the rule would change to require a specific SOW section of the appraisal. Put it out there, what did you do and not do in this report.

I have provided input in the past. One of the first times I did, there was action taken and that is when I realized TAF wold actually listen to an individual. That was on the words "accept a fee" in the ethics (provision back then?). I questioned if I did it for free was it ok? Those words were gone in the next year's revision.

As far as departure - like I said, not a big conspiracy guy here. Just stuff I was hearing. I was told that regulators told lenders the words - crud I have put it out of my head, now I cant remember - but something to the effect that a Limited appraisal might not be as reliable as a Complete appraisal - that wording or phrasing was causing issues with regulators. So the lending lobby wanted it removed from USPAP.

Whether or not its true - who knows. The end result is a version of USPAP that I think is one of the more useable and workable versions we have had. Much less confusion. Tell them what you are going to do, do it, then tell them what you did.

 

[DTB]

As a lifelong Chicagoan adept at reading between the lines, The IAC also assists the Foundation in identifying and cultivating potential corporate funding sources to help support the work of the ASB and AQB, is the sentence that matters in George's eloquent post.

Your $2,500 membership gets you in the room but not at THE table. It don't get any simpler than that.

If you don't think the bolded sentence means a quid pro quo for the heavy hitters, I can't help you.

 

[DWiley]

If you don't think the bolded sentence means a quid pro quo for the heavy hitters, I can't help you.

Since you are so experienced in such things, perhaps you could provide an example or two of that quid pro quo.

Maybe you are talking about the big forms vendor that wanted the ASB to say that emailing reports violated confidentiality so appraisers would be forced to use systems like that vendor had developed for report delivery. No, I suppose that cannot be it because the ASB told them that was nonsense.

Maybe you are talking about the professional organization that wanted the ASB to say that STANDARD 3 did not apply when they asked members to review the work of other members for disciplinary reasons. No, wait, the ASB told them that USPAP contained no such exception.

I got it. You must be talking about those lenders who wanted the ASB to say that transferring reports was perfectly fine. Except, the ASB said just the opposite.

No matter how much money anyone pays to be on a council or how much money they help raise for TAF, the decisions of the ASB and AQB still come down to the individual judgment and the individual votes of the board members. They are almost all appraisers, and I assure you they are all just as independent as those in this little community.

If anyone wants to see how it really works all you have to do is attend the meetings. They are open to the public and the schedule is posted on the TAF web site. Of course, there is also the option to just continue lobbing innuendo without supporting facts.

 

[Carnivore]

Maybe you are talking about the professional organization that wanted the ASB to say that STANDARD 3 did not apply when they asked members to review the work of other members for disciplinary reasons. No, wait, the ASB told them that USPAP contained no such exception.

Danny,

Is this considered an appraisal assignment if AI leadership/Committee ask a panel of peers to peer review another members report? If your answer is yes, then this is why Standard three applies?

ap

 

[DTB]

Since you are so experienced in such things, perhaps you could provide an example or two of that quid pro quo.

Maybe you are talking about the big forms vendor that wanted the ASB to say that emailing reports violated confidentiality so appraisers would be forced to use systems like that vendor had developed for report delivery. No, I suppose that cannot be it because the ASB told them that was nonsense.

Maybe you are talking about the professional organization that wanted the ASB to say that STANDARD 3 did not apply when they asked members to review the work of other members for disciplinary reasons. No, wait, the ASB told them that USPAP contained no such exception.

I got it. You must be talking about those lenders who wanted the ASB to say that transferring reports was perfectly fine. Except, the ASB said just the opposite.

No matter how much money anyone pays to be on a council or how much money they help raise for TAF, the decisions of the ASB and AQB still come down to the individual judgment and the individual votes of the board members. They are almost all appraisers, and I assure you they are all just as independent as those in this little community.

If anyone wants to see how it really works all you have to do is attend the meetings. They are open to the public and the schedule is posted on the TAF web site. Of course, there is also the option to just continue lobbing innuendo without supporting facts.

No lobbing of innuendo here, just a view of the entire industry. I am more of a big picture guy.

1. What's the public trust level of appraisals currently?
2. What's the appraisers' general opinion of the industry currently?
3. Who made out like bandits?

Enough answers for me to draw a conclusion, others may not agree.

 

[George Hatch]

You can't attribute any of those problems to the content of appraisal standards. The closest you can get is the enforcement of those standards, which is not a function of either the AQB or the ASB.

If fewer appraisers had gotten involved with the unabated proliferation of trainee-based fee shops we wouldn't have these 3 problems to the degree they exist today. Like it or not, the business practices employed by many in the appraisal business has contributed to the current environment. Again, that has nothing to do with the content of USPAP.

 

[Francois K. Gregoire]

If anyone wants to see how it really works all you have to do is attend the meetings. They are open to the public and the schedule is posted on the TAF web site. Of course, there is also the option to just continue lobbing innuendo without supporting facts.

Danny,

As you know, I don't subscribe to the conspiracy theories. Additionally, I have firsthand experience with both the ASB and AQB by writing comments on exposure drafts and making comments during meetings. Members of both boards have also heard from me in person, by telephone and by email on a variety of subjects. None have refused to acknowledge a suggestion and some of my ideas have been implemented.

Although I have had serious disagreements with some members and several of the positions taken by both the ASB and the AQB, based on my observations and interactions with board members, I believe their commitment to the profession and interest in promoting the public trust is sincere. My private conversations are often much more civil than the confrontations in public meetings. These ASB, AQB and Board of Trustee members are honorable folks.

Although public meetings of the ASB and AQB are held periodically, many of their conversations and actions are conducted and concluded in private. There are sessions during public meetings, particularly with the AQB, that are not public. As a citizen of a state with a comprehensive approach to open government and public meetings, I believe much of the suspicion could be handled by eliminating these meetings behind closed doors. This suggestion has been made many times, but has not been met with favorable reaction.

Given their important responsibility, the Foundation and all of its boards and councils should operate under the same open government rules state agencies must follow when implementing their decisions, standards, requirements and actions. It would go a long way towards eliminating the suspicion (some, not all) of their motives.

By the way, Danny, thanks for participating in this discussion.