Virgina REAB and Portal Petition

[Marcia Langley]

I am no fan of these conversion programs so I am not defending them with this question, but what would make them non-compliant to USPAP? I do not understand where this notion is coming from. As long as the appraiser takes the time to learn which forms he/she would have to use that will actually convert, and then after the conversion process is complete does the due diligence reviewing the end result and editing any and alll parts that need edited before printing (for the file), saving and sending, where does the non-compliance part step in. I think we are focusing on the wrong thing here, the issue is why do they demand usage of "their software"? Is it just to data mine, or are their "other reasons"?

TJ,

I think for the purposes of this thread we have first assumed that these systems have at least the potential of being converted into a version that is not in compliance with USPAP.

That assumption is sort of necessary in order to assess the ramifications of the use of these systems to the appraiser, the client, the state boards, the consumer, and the public trust. If we made the assumption that no potential for USPAP noncompliance existed, this particular strain of conversation would not be very interesting.

The question I have been exploring is whether the appraiser has delivered the report that he thought he did and whether the version he expects to be held accountable for is the same one that the board et al would hold him accountable for. There are certainly many important avenues of inquiry regarding these systems including signature control and data mining.

But the burning issue for the Virginia state board is how to fulfill their mandate for placing accountability for USPAP compliance on their licensees and how that relates to the overall goal of protecting the public trust.

 

[TJSum]

Thank you Mr. Clark, Mr. Dodd and Mr. Turner for trying to fix this issue in your State !!!

Per your post Marcia, what exactly is the concern for these conversions that would make them non-compliant? Several posters keep mentioning this, but none have explained what makes them non-compliant. Is it the fact that the appraiser may have one version in their work file which is different than the actual appraisal report the lender receives? Or is the concern that the conversion may not convert the entire report?

Maybe other appraisers who have used this system are not posting out of fear of retribution from their clients, or they may be afraid to reveal they could be going against USPAP by using these conversion programs. If it is clarified, maybe others will join in with their experiences with less fear.

 

[Marcia Langley]

Per your post Marcia, what exactly is the concern for these conversions that would make them non-compliant?

TJ,

My concerns are strictly hypothetical and generic based on reports from others that reports the appraiser believes he has sent are different than reports that the clients receive. If any of those differences were the omission or distortion of an element of USPAP compliance, then it would be important to know for sure where the responsibility of the appraiser stops.

I also think it important that this be a broad industry wide understanding, or at least statewide, rather than one individual's understanding, one appraisal at a time.

State boards investigate one appraisal at a time. But they also set policy and one controversial case could end up setting policy for the board. I just think it is important for appraisers to have fair warning of the risks involved with using systems they have no control over and/or are required to use as an assignment condition.

Appraisers can't forsee the risks without some sort of directive from the policy makers.

In any given case, a borrower or a lender, or a third party transmission company could be pressing a complaint to the state board against an appraiser and have seemingly supportable evidence that the appraiser was not in compliance with USPAP.

These third party vendors and the banks who hire them will clearly have great motivation to lay off as much risk onto the appraiser as possible.

Remember, E&O covers errors and omissions, only (not fraud). If the problem with the appraisal is errors and omissions the complainants will be going after the E&O.

If the crucial error was in a garbled figure that distorted the conclusion or in a missing summary as required in Standard 2, the appraiser could be at risk.

In the days when suits against appraisers were rare, this may have seemed like a distant possibility. In today's environment, it is a distinct reality.

 

[Oregon Doug]

...
As to restraint of trade, all states have the right to approve or disapprove any business from doing business within a state if the violate state laws or regulations. One of the things the Virginia board is doing, based on what I saw and heard at the last board meeting, is looking at whether or not mortgage lenders are approved in Virginia or not or are a Federally Regulated Financial Institution doing business in Virginia. Requiring state or federal approval IMNSHO is not restraint of trade.
...

That's partially true. The state has standards for becomming an appraiser, and once a person (not a company) meets those standards, he is issued a license and is permitted to practice appraisal (the same for doctors, lawyers, barbers...). That's not restraint of trade.

But once a license to practice has been issued, the state can not tell that licensed appraiser who he can or can not work for. That is restraint of trade.

Oregon Doug

 

[DWiley]

Marcia,

I have talked with many, many appraisers about the issues raised in this thread. It has been truly astounding to me how many appraisers have been uploading reports without looking at what they upload.

Whether it is PDF, AIReady, Lighthouse, or good ol' paper, the appraiser should NEVER transmit it to a client before looking at it.

Just this morning I was looking through a PDF file that I created and noticed that the last sentence in the reconciliation section was gone. These kinds of things can happen with ANY software that converts a native file to some other format.

DW

 

[Ken B]

Marcia,

I have talked with many, many appraisers about the issues raised in this thread. It has been truly astounding to me how many appraisers have been uploading reports without looking at what they upload.

Whether it is PDF, AIReady, Lighthouse, or good ol' paper, the appraiser should NEVER transmit it to a client before looking at it.

Just this morning I was looking through a PDF file that I created and noticed that the last sentence in the reconciliation section was gone. These kinds of things can happen with ANY software that converts a native file to some other format.

DW

Changes between an original file and a PDF file are not limited to form software. When I print a MSWord narrative report as a PDF file, it is not unusual for the PDF file to have minor, but annoying, format differences compared to the Word file which require correction.

It's an irritating problem which requires attention to detail and a thorough review of the PDF file before it is emailed or saved as part of the workfile.

Unless, of course, I didn't care if the electronically delivered PDF file looked sloppy and perhaps slightly different from my Word file.

Technically, although I may think the Word file is my "official" appraisal report, the product I deliver to the client is the real appraisal report. I guess I better know what I am sending my client, don't you think?

 

[Don Clark]

But once a license to practice has been issued, the state can not tell that licensed appraiser who he can or can not work for. That is restraint of trade.

Oregon Doug

That's true. But, a state can tell a company what they have to do to conduct business within a state. And, if they require an appraiser to do something that is against board policy I believe they can bar a company from doing business within a state. look at North carolina. They have a state law that requires that a mortgage lender be licensed to do business in the state. They also require payment to an appraiser within a certain time limit. If the lender does not follow the law their approval can be revoked. If the lender is a federally charted institution, any complaint against them is referred to the OCC. I know. I had a lender refusing to pay me. I filed a formal complaint with the state. the state referred it to the OCC as the lender was federally chartered. The letter from the OCC to the lender said pay the appraiser or lose your ability to do FRT's. The lender almost broke their neck getting a check to me.

Also, the state can require that I not use a system that changes my report before it gets to the client.

 

[Marcia Langley]

quote=DWiley;1615220
Marcia,

I have talked with many, many appraisers about the issues raised in this thread. It has been truly astounding to me how many appraisers have been uploading reports without looking at what they upload.

That is what I'm beginning to realize.

Whether it is PDF, AIReady, Lighthouse, or good ol' paper, the appraiser should NEVER transmit it to a client before looking at it.

Amen.

Just this morning I was looking through a PDF file that I created and noticed that the last sentence in the reconciliation section was gone. These kinds of things can happen with ANY software that converts a native file to some other format.

Good point.

=========

And I agree that a one time computer glitch should be amicably corrected between parties with a good faith effort at correction.

But intentional systemic changes are another thing. If appraisers aren't already confident that they can demonstrate they are satisfying their responsibilities they need to be reviewing the systems they use. If they are in doubt or don't feel they have the information they need in order to be sure, they should consider declining to use whatever system is in question.

"The client made me use a system I didn't understand" will not be much of a defense.

 

[McPheeters]

Changes between an original file and a PDF file are not limited to form software. When I print a MSWord narrative report as a PDF file, it is not unusual for the PDF file to have minor, but annoying, format differences compared to the Word file which require correction.

It's an irritating problem which requires attention to detail and a thorough review of the PDF file before it is emailed or saved as part of the workfile.

Unless, of course, I didn't care if the electronically delivered PDF file looked sloppy and perhaps slightly different from my Word file.

Technically, although I may think the Word file is my "official" appraisal report, the product I deliver to the client is the real appraisal report. I guess I better know what I am sending my client, don't you think?[/quote]

My red is the gist of it. All appraisers need to look at what these conversion programs are doing to your report before you hit send. If the program does not offer a preview, or does not allow you to print a hardcopy, dont send it! Keep in mind you own what you send.......

 

[McPheeters]

That is what I'm beginning to realize.




Amen.



Good point.

=========

And I agree that a one time computer glitch should be amicably corrected between parties with a good faith effort at correction.

But intentional systemic changes are another thing. If appraisers aren't already confident that they can demonstrate they are satisfying their responsibilities they need to be reviewing the systems they use. If they are in doubt or don't feel they have the information they need in order to be sure, they should consider declining to use whatever system is in question.

"The client made me use a system I didn't understand" will not be much of a defense.

My red. Especially if there is a preview screen involved .....as in AI Ready; or a warning screen from the appraisal software vendor, as in Ala Mode.