Three days of hearings on my same complaints again. I have questions?

[The Warrior Monk]

I'll address some of the issues because they are cut and dry given the information presented. The rest either don't have enough information, are to complex, or should be addressed by an attorney.

5. The state attacked my geographic competency in the area I covered because it was a large rural area that I specialized in. Regardless of the number of data bases I have and the way I collect and keep data. it is a voliation of USPAP.

There is no requirement of geographic competency in USPAP, only competency.

6. That you are limited in the number of appraisal you do. That if the expert only does 200 to 300 reports a year and has superior license and schooling. You should do a substantial less number of appraisals then the four or five hundred you may have done for the simple fact that it should take you longer to complete the report because of your education and license level.

Such generalizations simply cannot be made because every appraisal report has its own SOW.

7. That you can not have a signature line that says: Miller Land & Livestock, Co. AP. Lic # xxxx-zzz. That the words Appraiser License must be spelled out.

Chances are that this is specifically prohibited in your state licensing law. Individuals receive real estate appraisal credential, not corporation.

8. That a reviewer can state that the form was incorrect that I used, because he felt that the subject was a single family attached duplex. That because the legal description did not have the words condo in it. It should not be done on a condo form. We proved that the subject had a 0 lot line conversion in place, was being change from a rental development in to condo ownership, had been listed and sold as a condo twice before I did the appraisal on it. That I should not have used condo comparables but single family home or multi unit homes. We presented these documents into evidence and the record. That this reviewer failed to research the data on the subject and in my appraisal. The reviewer presented nothing to support his claims it was single family attached.

Theoretically, any form for can be used for any assignment. Practically, there may be issues with preprinted verbiage conflicting with narrative, in addition to expectations by clients who use such forms.

9. It is against USPAP and the LAW to use MLS photos in an appraisal report. This was presented by one of the reviewers. The same one that used the wrong USPAP Standard for review.

USPAP has no such prohibition. There may be a legal issue, depending on the manner in which the contract with MLS is structured.

10. The reviewer sited you must site the source of your market value even if you use the preprinted Fannie Mae/Freddie Mac forms. You must site a source if not, you have violated USPAP.

This is not true. In fact, it was addressed in one of the USPAP Q&As.

11. One reviewer stated you must used comparable in the township if there are a large number of sale, regardless if they are like the subject in design or not. Case in point there was 30 plus sale in this area of ranch type homes with the similar GLA as the subject. However the subject was an A Frame and I went 6 miles and up to find A Frame comparables. I had a total of 5 A-Frames as comparables. He stated I should have use ranch type homes. Because for the simple fact there were no A-Frame sales nearer in the small rural town. This violated USPAP by going a greater distance to find them.

USPAP (nor Fannie, BTW) has any distance guidelines. It is my opinion that the appraiser should use the data necessary to provide a credible value conclusion. My opinion would be to use analyze all the data...that doesn't mean include all data in a grid, but maybe some in a grid and some discussed in narrative.

12. One of the reviewers said it is against the LAW and a violation of USPAP if you do not use the Cost Approach in your reports. It is also against the LAW and USPAP if at a later date you add the Cost Approach at the request of the lender and charge for the work, because it should have been include from the start.

This is BS. USPAP only requires an approach when it is necessary. Some well-respected and published appraisers (including those in the AI Journal) don't believe that a Cost Approach is ever necessary in a market value appraisal.

14. The invoice is again part of the work file and should be included as to what rates you charge your clients in a request for your work file. Again the number of hours I worked entered into the picture as well.

There is no requirement for the invoice be included in a workfile, or that a fee even be charged.

 

[kimcha]

Ray,

As I have read of your plight over the last few years, and especialy with this last posting, I can't help but note that we appraisers are a very long way down the road to ruination due to the absolute confusion inherent in the USPAP document.

I believe we appraisers, and all regulators, can justify and at the same time, refute almost anything we want, using USPAP, as it is such a foggy, unclear, and fluid document.

I honestly believe that each and every knowledgeable appraiser in the US hopes and prays to fly just under the state regulatory radar of their particular state, and we hope that no one files a complaint.

If and when someone files a complaint, the state feels they need to prosecute and make one guilty until that individual can prove themselves otherwise. That's not what our country was built on. How in the world does one prove himself innocent, when the laws (USPAP) are so unclear, and ever changing, and everyone can have a different interpretation of the USPAP document.

From my readings of your posts, it is obvious your state regulatory agency will find you guilty, as they have way too much time and money vested into your case. They have to justify their time and money spent. They will continue to beat you down, and then when they see what may be a disaster for them, or they just cannot commit any more money to your case, they will grab at straws and offer you a plea deal. You plead guilty to some minor offences, and they will only fine you so much money. In our society, they now call that justice. I call it a travesty of the law.

I wish you well my friend.

 

[Midwest Guy]

FREQUENTLY ASKED QUESTIONS



132. Citing the Source of the Value Definition and Fannie Mae Form 1004



Question:
USPAP requires an appraisal report to include a citation of the source of the value definition used for the appraisal. Is this information adequately addressed on the new Fannie Mae Form 1004?



Response:
Yes. On the new Fannie Mae Form 1004, the value definition is pre-printed on the form, and there are several references indicating that Fannie Mae is the source for the form. No additional citation is required.

Per 2006 USPAP:


(v)
state the type and definition of value and cite the source of the definition;

Comment: Stating the definition of value also requires any comments needed to clearly indicate to the intended users how the definition is being applied.

Each of my reports say see definition of Market Value as defined by Fannie Mae in the attached Limiting Conditions.
[SNIP]

 

[Midwest Guy]

110. Cost Approach and Fannie Mae Form 1004

Question:
The new Fannie Mae Form 1004 indicates that Fannie Mae does not require completion of the cost approach. Is it acceptable to simply omit the cost approach when using this appraisal report form?


Response:
The appraisal report form on which an appraisal is reported does not dictate the scope of work performed.

The appraiser must identify the appraisal problem and determine the proper scope of work.

If the cost approach is required for credible assignment results, then it must be developed and the results must be included in the appraisal report. If the cost approach is not required for credible assignment results, the appraiser may elect not to complete the cost approach. If it is omitted, the report must explain the omission.

Whether or not the cost approach is necessary is a decision that must be made by the appraiser based on the intended use, intended user, and other assignment elements.

Three days of Hearings
12. One of the reviewers said it is against the LAW and a violation of USPAP if you do not use the Cost Approach in your reports. It is also against the LAW and USPAP if at a later date you add the Cost Approach at the request of the lender and charge for the work, because it should have been include from the start.
What do you think.

 

[PropertyEconomics]

That was the last hearing. This week was the new hearing, those results will not be in for several months now. The lawyers have got to file thier closings, the judge order the state to file four briefs on points of law, then we have to resond to the states closings and filings, then the judge will make his decision, then it is presented to the board and they make thier decision, part of their decision they can over turn the findings of the Court and render their own opinion and decision. At that point I can move to District Court with the case if need be.

In the mean time I have the full intention of filing compaints on all the reviewers from the first hearing to this hearing with the state appraisal board and the ABQ. I have also been working on a number of reviews that I have done that will also be going to the state as complaints.

Ray .. why did you not move this to the district level LONG AGO?

 

[Midwest Guy]

I cannot find an invoice in this list!

FREQUENTLY ASKED QUESTIONS



47. CONTENTS OF A WORKFILE



Question:
What information must be retained in an appraiser’s workfile?

Response:
An appraiser must prepare a workfile for each appraisal, appraisal review, or appraisal consulting assignment. The Record Keeping section of the ETHICS RULE states:

The workfile must include:

the name of the client and the identity, by name or type, of any other intended users;

true copies of any written reports, documented on any type of media;

summaries of any oral reports or testimony, or a transcript of testimony, including the appraiser’s signed and dated certification; and

all other data, information, and documentation necessary to support the appraiser’s opinions and conclusions and to show compliance with this Rule and all other applicable Standards, or references to the location(s) of such other documentation.

The appraiser’s assignment workfile serves several purposes. As in many other professions, the discipline of enforcement by public agencies and peer review, together with one’s self-discipline and dedication of effort, serves to ensure performance of assignments in compliance with professional standards. In addition to facilitating enforcement, a workfile aids the appraiser in handling questions from the client or an intended user subsequent to the date of the report.

An appraiser’s assignment workfile preserves evidence of the appraiser’s compliance with USPAP and other information as may be required to support the appraiser’s opinions, conclusions, and, in the case of an appraisal consulting assignment, recommendations.

Three days of Hearings

14. The invoice is again part of the work file and should be included as to what rates you charge your clients in a request for your work file. Again the number of hours I worked entered into the picture as well.
What do you think.

 

[Ray Miller]

Ray .. why did you not move this to the district level LONG AGO?

There are set rules and procedures that you are required to follow in Wisconsin Statues before you can bring a case like this before the District Court. This hearing before the ALJ is the last step. The next step will be to District Court.

In the mean time a year ago after the first hearing we won on the summary suspension, I filed a claim with the Wisconsin Claims Board for $20M in damages. That has not been heard yet. They have not notified me a hearing date on this claim.

 

[Caligirl]

9. It is against USPAP and the LAW to use MLS photos in an appraisal report.

Show us where...

Re: setting a precedent, any and all appraisal reports in the entire state should be reviewed for use of MLS photos and prosecuted to the same extent. Just wondering.

One of the reviewers said it is against the LAW and a violation of USPAP if you do not use the Cost Approach in your reports.

Show us where... both in USPAP and the LAW...

Setting precedent for mandatory inclusion of the CA in every single appraisal completed in the State of WI? Just wondering...

 

[Restrain]

Sounds like you just hacked some people off. I've said it before and I'll say it again. Why are you even appraising in WI? Sometimes the cost of the fight is just not worth it. And in your case, it looks like very big bucks.

 

[stefan olafson]

Ray, I place the following in each appraisal I complete:

1. Client and any other intended users: The client is zzz Mortgage, Address, City, State and Zip and HUD/FHA if applicable. The intended users are the mortgage company, and HUD/FHA.

2. Intended use of the appraiser’s opinions and conclusions: The Intended Use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated Scope of Work, purpose of the appraisal, reporting requirements of this appraisal report form and the Definition of Market Value. No additional intended users are identified by the appraiser.

3. Type and definition of value: Market Value as defined on page 13 of this appraisal report. The source for the definition of value was published by federal regulatory agencies pursuant to Title XI of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 between July 5, 1990 and August 24, 2990, by the Federal Reserve System (FRS), National Credit Union Administration (NCUA), Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS), and the Office of Comptroller of the Currency (OCC). This definition is also referenced in regulations jointly published by the OCC, OTS, RFS, and FDIC on June 7th 1994, and in the interagency Appraisal and Evaluation Guidelines, dated October 27, 1994.

4. Effective date of the appraiser’s opinions and conclusions: The effective date is the date of inspection, 5/12/2008, the date of the report is 5/16/2008.

5. Subject of the assignment and its relevant characteristics: The subject of this assignment is a rural residential property approximately 11 years old that has been adequately maintained. The property is a typical ranch style home similar to most homes of a similar age. The property is a two bedroom, one and one half bath home with a full basement that is mostly finished. The basement was built and lived in by previous owners in 1970, the above ground improvements were added in 1997.

6. Assignment Conditions: The property was inspected on the interior and exterior on May 12, 2008. The improvements at the time of inspection sit in a farmstead included in a 39.73 acre parcel under the same ownership. The farmyard contains the improvements included in this appraisal as well is a set of farm buildings that are considered to have no value, photos are included within the report to illustrate the poor condition of these outbuildings. Public records were researched for the subject property as well as the comparable sales chosen. The entirety of Mahnomen County and eastern Polk County was included in the neighborhood because of the lack of market activity and the low population level. The age of the improvements is based on county records. All four comparable sales and the one pending sale chosen were inspected from the street as well as researched at the county assessors office. The appraisal report includes my analysis, opinions, and conclusions, the square footage of the subject improvements was taken from actual physical measurements, the square footage of the comparable sales unless otherwise noted, was taken from county assessors records. Personal property was not included within the estimate of value.

7. All typical approaches to value were considered in the completion of this assignment. The sales comparison approach was completed. The cost approach was not included as a support for the sales comparison approach. The sales comparison approach using actual closed sales which are adjusted based on market influences is the most appropriate method to use to value this type of property. The improvements are neither new or unique, the cost approach is difficult to complete properly when the improvements are older, depreciation is difficult to estimate properly and divide between physical, functional and external conditions.

8. There are no extraordinary assumptions or hypothetical conditions in this appraisal report. If used, they might have affected the assignment results . Assumptions and conditions are located elsewhere.

9. The highest and best use is defined as: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are; legally permissible, physically possible, financially feasible, and maximally profitable. The highest and best use of the subject property as if vacant and available for development is as a single family dwelling site. The highest and best use as improved, the current use, is as a single family dwelling.


10. Exposure time may be defined as follows: the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based on an analysis of past events assuming a competitive and open market. (SMT 6) Exposure Time: Estimated exposure time is between 180 and 240 days



AND I'M STILL NOT COMPLIANT WITH USPAP ACCORDING TO THE LORDS IN CHARGE IN ND!!!!!!