We Must Start Policing Our Own!

[Bob Ipock]

Confidentiality:

An appraiser must protect the confidential nature of the appraiser-client relationship.

An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.

An appraiser must be aware of, and comply with, all confidentiality and privacy laws and regulations applicable in an assignment*.

An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law; and a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation. It is unethical for a member of a duly authorized professional peer review committee to disclose confidential information presented to the committee.

 

[Farm Gal]

Bob:
I don't have to look it up, I have it almost memorized!

I read it outloud in the class!!! There was just a difference of opinion as to the validity of the 'conflicting' information/directives. Given that I was one of the younger attendees, female to boot, NOT a member of the sponsoring organization :roll: :roll: The individual with whom I was finally verbally sparring kept restating his position as the Head of Education .... well who do YOU think the attendees believed. :?: :evil:

My interpretation has ALWAYS been that the statement you refer to and I mentally shorthand as "not knowingly permit another appraiser" superceeds any client confidentiality issues. In addition the 'confidentiality issues' appear to me to be directly spoken to in several other mini-quotes in this very thread!

The problem is we have a document which can apparently argueably be interpreted by several individuals to 'read' quite differently on this matter.

I have spent several years re-reading it, and for myself I chose liberty or Death... If they wanna take my license away for doing what I earnestly to be the directive of the document, AND a deep need of the profession, then should I lose my ticket to practice I will GLADLY go find some other field of endeavor!

I honestly wish the ASB would address this in a FAQ!

Petition anyone? come to think of it I think I will post a poll! which can be forwarded to the ASB(?)

 

[Mike Garrett RAA]

Your mind is intact!. In my state, you are in violation of the statues IF you do not report fraudulant reports.

An interesting aside...today while searching for some comparables for an assignment, I came across a sale that looked very familiar. Pulled out my log and sure enough I just appraised the property in March. It was listed for $154,000, the contract was a VA at $149,000. I found three comps in the immediate neighborhood, current sales, that supported a value of $135,000. This house had a poor floor plan, a bilevel with partly finished lower level. The owner put a huge wood deck in front taking up half the yard.

I looked at the sales price.....$149,000 with a conventional loan. Wanna bet the appraiser failed to use the three sales in the immediate neighborhood and went to another neighborhood with higher sales prices. How do I know this? The REALTOR tried to get me to use three sales that he found which would support his contract...I refused. Would love to see that appraisal!

 

[Bob Ipock]

I would be in favor of specific language that REQUIRES appraisers to notify state board of incompetent, misleading or fraudulent appraisal reports that we have specific knowledge of.

Nothing makes me more angry than appraisers who talk about all the bad work they see, all the bad appraisal reports they have copies of....and yet do nothing but TALK about it. If an appraisal is not bad enough to file a complaint on....then don't be bad mouthing the appraiser. If it rises to the level of needing to be turned in to the state....just do it.

I have an appraiser friend who talks about the BIG STACK OF BAD APPRAISALS that he has in his office. He talks about them and talks about the appraisers...but that is all he does. What good does that do?

I fear that many "bad actors" out there continue to do bad work because they are VERY COMPFORTABLE and have been doing it for years with no problems.


The sooner that THE STATE BOARDS wake up an see the quantities of bad work...the sooner they wil be forced to do something about it.

Bob

 

[Francois K. Gregoire]

Bob and Others,

Although it's impossible to speak of other states, in Florida, it seems as though nearly 60% of the cases in which Probable Cause is found and an Administrative Complaint is filed, originate with a complaint made by an appraiser. Usually these are the result of reviews. Although many are anonymous, most are not.

Florida at one time had a 'snitch' law governing all licensed and regulated professionals. It resulted from abuses by contractors and roofers after Hurricane Andrew. The law stated the failure to inform regulators of a known violation of license law was a violation in itself. Due to problems and conflicts with Professional Standards Boards of Professional Associations (many bind their members to confidentiality) real estate brokers, salesmen and appraisers are specifically exempted from the statute.

 

[Mike Garrett RAA]

Just because someone does a residential appraisal differently then I do is not cause to "rat on them". But when you see obivious fraud, a lack of respect for the profession, or someone prostituting themselves for the sake of a $300 appraisal fee...then they are "fair game".

Of serious concern here in Colorado is the lack of enforcement. There is only one investigator for the entire state. It also appears they are pretty anal about what they find as violations. Like failing to have your license stamped with the "right size" of "copy" or failure to include the # sign in your license number, ie. CR#00001789.

There are certainly bigger fish to fry. 8O

 

[Leon Stewart]

Don't worry Leon, those appraisers that you will not turn in will someday take away your $5,000.00 a month client. Just a matter of time.


Bob

Since I don't do Reviews, and don't have any official need to have a copy of anyone's Appraisal Report i'm not in the business of reporting anyone to anybody for anything. Those duties are not included on my Fee Schedule.

leon

 

[Leon Stewart]

It's not all about what is or is not a violation of USPAP, but it is about the person that makes a unalateral decision on his own evaluation that he/she is an authority of USPAP. There have been discussions on USPAP on many occasions over the years that have results in many changes, and some confusion still remain on some parts of these USPAP Regulation(s).

A better procedure would be to require a Reviewer's Findings to be reviewed by some independent person prior to sending anything to the State Governing Board. Under this present System you have people doing review work that have limited experience as Appraisers, and are definitely not skilled enough to evaluate anyone else's Appraisal Report, but they are doing it.

In some cases you have non-appraisers doing desk reviews, so I guess they could send Reports they consider inadequate or in violation of USPAP to the State also. Even though they have never prepared or is licensed to complete an Appraisal Report. What about BPO's and AVM's which don't require a Licensed Appraiser. Who do you report them to? Will they just creep in under the Radar and consume the entire Appraisal Profession? When that happens there wont be a need for a Licensed Appraiser or a State Board.

leon

 

[George Hatch]

Leon,

A person does not have to be an expert in USPAP to know when an appraiser is lying to them or not disclosing relevant information about a subject property. We aren't talking about turning in masses of appraisal reports just because we might disagree with the final conclusion of value or because they are in some way questionable. We aren't talking about minor little nuances or technicalities. We are talking about sending in the worst of the worst; the appraisal reports that are clearly harming our industry, our clients and the public at large. You know, the types of violations that border on or even cross over into criminal conduct territory.

If an appraiser really doesn't understand USPAP enough to recognize that a fraudulent and misleading appraisal report is a violation, they probably shouldn't be doing reviews in the first place (they probably shouldn't be doing appraisals, either). If someone doesn't want to get involved in helping to clean things up because it's not part of their engagement or because there isn't enough money in it for them, that's fine. That's a business decision on their part. Of course, if we aren't willing to get involved even passively then we shouldn't complain about appraisers or how the current trends in our industry are heading downhill.

IMO, the "USPAP-is-confusing" argument is a non-starter when it comes to appraisal reports that are clearly misleading. Besides, sending in a 'bad' appraisal report is not the same thing as taking that appraiser's license away. The state boards make that decision, not the complainants. One of the reasons for requiring USPAP updates to make sure that everyone at least has enough access to the material to understand the basics. No one is born knowng the material. It really helps to read through it at least once and at least try to understand it.

George Hatch

 

[Leon Stewart]

Leon,

"We aren't talking about minor little nuances or technicalities. We are talking about sending in the worst of the worst; the appraisal reports that are clearly harming our industry, our clients and the public at large. You know, the types of violations that border on or even cross over into criminal conduct territory."

George you are confirming the major problem with the whole matter in that everybody is talking about reporting different degrees of errors or mistatements. You also indicate that the Client (Lender) is being harmed. If so why isn't he given the responsibility to report the Reviewer's findings to the State Board? It's a helter-skelter process that is left up to one person's determination.

If an appraiser really doesn't understand USPAP enough to recognize that a fraudulent and misleading appraisal report is a violation, they probably shouldn't be doing reviews in the first place (they probably shouldn't be doing appraisals, either).

Inexperienced Appraisers or non-appraisers shouldn't be doing Reviews or evaluating Licensed Appraisers Reports, but in many Lending Organizations they have Processors doing Desk Reviews. That's been going on as long as I can remember.

Of course, if we aren't willing to get involved even passively then we shouldn't complain about appraisers or how the current trends in our industry are heading downhill.


The idea of the Appraisal Profession going downhill because of bad appraisal reports is a misnomer. The downturn in the Appraisal Profession is related to "Lender Greed" by them increasing their profits by moving to short form electronic value estimates at 10% of the cost of a typical Appraisal Fee. The errors or fraud related to Appraisals are primarily directed by the Lending Industry. with the exception of some type of well organized criminal structure, there is no need for an Appraiser to falsify an Appraisal for a $ 300 or $ 400 fee, but the Lender in their effort to maintain this inflated property value scheme that they have established will pressure the Appraiser to get the value that the Lender needs to close the Loan. That particular type of fraud could be eliminated overnight by just removing the Lender from the Appraisal Process, and make sure the Lender has no contact with the Appraiser before or after he/she completes their Report.

leon

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