Today's Review

[George Hatch]

Tony,

All I can tell you is that in every USPAP update class I teach, I see a sizable percentage of appraisers who apparently have been living under a rock, and I'll bet you a buck most every other USPAP instructor is seeing the same. There are those people who's sole exposure to appraisal practice and appraisal standards is limited to the negative feedback they get from underwriters and however much the mail-order CE courses address the subject.

I regularly see these guys roll into my class, sit in the back row, don their 1000 meter stare and wait for their punishment session to begin. I must confess to deriving a certain amount of entertainment value in seeing the blank stare replaced with a I-just-woke-up look by the end of the first 5 minutes, by which time I've written "Complete" , "Limited" and "Departure Rule" on the whiteboard only to cross them out. That's when they start looking for something to take notes with and asking for samples of boilerplate to substitute for their other boilerplate - and that's when I know it's time to back up and start over from the beginning.

There's this one guy who's work I occasionally run into who uses a total of 5 different "appraiser certifications" in every report. He uses 3 different sets of boilerplate, most of which is outmoded and has been for years, he includes the old 439 form with the new URAR, he uses the multi-purpose addendum, a FIRREA Addendum, a USPAP Addendum (aka Departure Reule Addendum) and boilerplate from some MAIs narratives, resulting in a 30-page URAR. More is obviously better for this guy, and yet his original writing and analysis is always very limited and superficial at best. Guys like this are the weakest link and it is they for whom the CE requirements are developed.

 

[Mike Kennedy]

:icon_idea: "Guys like this are the weakest link and it is they" who need their licensed revoked for Gross Incompetence, utter stupidity, wasting an Instructors valuable time and energies, and who sully the entire Industry.

 

[Tony Blackburn]

Your points are well taken George. I've seen those guys too.

And Mike...I look at it this way.....and I might take a lot of flack for this.....

These guys that do poor quality woork, sell thier values (on paper and the values in thier souls) keep us in the review business. Take em out to lunch and tell them what a good job they are doing.....

I'm not an idealist that thinks we can clean up the industry. The industry is what it is. Lack of oversight and greed fosters fraud. That's why review appraisers were created in the first place. Because we as an industry don't want to clean up our act, so banks and lenders created the "Review Appraiser" as a stopgap measure and it stuck.

I don't know of any other profession where there is so much peer review, as in the appraisal industry.

 

[Fred]

Guys like this are the weakest link and it is they for whom the CE requirements are developed.

But I have to get hauled in with the same net, like being in that kind of a room has something to do MY "continuing education."

 

[George Hatch]

Minimum requirements are about the masses, not the individual. They always penalize the upper 10% or 25%, and are always inadequate for the bottom 10% or 25%. Being penalized for being the smartest guy in the room is the price you pay for being exceptional. You shouldn't take it personally.

Maybe the CE requirements are viewed in the same way as experience requirements: there are always some people who can become proficient in less time but these have been judged as the minimums it takes to keep the masses in line.

Of course, there's always the automatic rejoinder that "well, the programs don't seem to be working for the masses, either". That's an argument that is always true to some extent, regardless of which type of activity and which types of minimums are under discussion.

 

[Mike Kennedy]

These guys that do poor quality woork, sell thier values (on paper and the values in thier souls) keep us in the review business. Take em out to lunch and tell them what a good job they are doing.....

I don't know of any other profession where there is so much peer review, as in the appraisal industry.

Tony, I suggest the first comment is part of the problem - clearly not the solution. The second one appears to be unsupported by estimates of Review Volume vs....Appraisal Volume compounded by Reviewers who "look the other way" and Lenders who "crave" incompetence at the lowest cost circumventing Federal and/or State Law, Mortgage Banking Regulations, and Financial Institution Regulations. How many "bailouts" does the Financial Industry need paid for by the sweat and taxes of all of us? Wasn't ONE enough?????

Choice: .......30 Reviews per month at half / 3/4 fee.....or those same assignments as Full Appraisals at full fee.....which you, and other Ethical Appraisers can do while maintaining the American Consumers' confidence and your Clients' loyalty and trust? Suggest you do the numbers $$.

Easy Choice.:icon_idea:

 

[Tony Blackburn]

All of your comments in your first paragraph are well taken. I see those as issues in our biz too....With the exception of "Bailouts" The Bailout you refer to (I assume) that appraisers we blamed for was predominatly in the commercial arena.

As far as the choice goes, I would rather do reviews. I personally enjoy them more than appraisals. I generally don't have to deal with mortgage brokers. I make more money on reviews than appraisals and the fees, for the SOW, are comensursate to better than full appraisals.

other Ethical Appraisers can do while maintaining the American Consumers' confidence and your Clients' loyalty and trust? Suggest you do the numbers $$.

There are and will continue to be, in to forseeable future, plenty of UN ethical appraisers, as well as the incompetent ones to keep us reviewers plenty busy. American Consumers are not educated enough to know what a good quality appraisal does to protect them and thier finanes. The American Consumer wants the lowest price and whatever gets the job done, regardless of the consequensces. Loyalty and trust? There is little of that in the mortgage broker community, which orders most of the retail appraisals in my market. We have a saying..."You are only as good as your last job". The majority of mortgage brokers will go to the lowest cost appraiser than can produce the highest value in the shortest amount of time.

 

[Mike Kennedy]

Loyalty and trust? There is little of that in the mortgage broker

:icon_idea: :icon_idea: Diversify.

 

[Fred]

David,
Here are excerpts from a report that I had to review preparing for trial. The appraiser who testified in front of me was asked to comment on this report, but I wasn’t.

Yes, any reason you can see in these excerpts to shake one’s confidence turned out to be well founded. Three of the report’s six land sales were not land sales (although I will never understand what someone could be thinking, doing the cost approach on a sandwich leasehold anyhow).

The real kicker is that at the time I read this report, it’s author had been my last USPAP CE instructor.

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Title Page
Summary Appraisal
Self Contained Report

Cover
The report is being prepared for use in connection with litigation.

Intended User
The appraisal report is prepared for the sole exclusive use of the appraiser’s client.

ALC
The value conclusion represents a 100% interest in the property.

Property Rights Appraised
The interest appraised represent the fee simple estate “as is” unencumbered by any other interest except leases currently in place. The site is currently restricted by a land lease and various other business leases. This appraisal, vales the improvements only, although values for land and improvements will be developed.

Summary Page
Property Rights: Fee Simple

Appraisal Reporting and Development Process
To develop the opinion of value, we have performed a Summary Appraisal as defined by the USPAP. This means that no departures from Standard 1 were invoked. In this Summary Appraisal, the appraiser used all appropriate approaches to value.

The appraisal report of the subject property has been presented in a Summary Appraisal Report, which is intended to comply with the reporting requirements set forth under SR 2-2(b) of the USPAP. That is, this report incorporates, to the fullest extent possible, practical explanations of the data, reasoning and analysis, which were used to develop the opinion.

Physically Possible
It is the appraiser’s opinion that the physically possible uses for the site include a wide range of legally permissible uses that would be physically possible.

 

[xm72mhd]

I have been lead to believe that there was some sort of qualifying process one must negotiate to become an USPAP instructor. Is the process insignificant?

Perhaps the process mirrors the preparation required for licensure and certification.