What does it Mean to Protect the Public Trust

[George Hatch]

BTW, I diverted nothing. I answered your question from #197 directly in #198. You're the one who isn't responding to the questions I'm asking. Lemme ask again:

If a lender takes in an appraisal that they can plainly see is substandard, then which party is responsible for their end of that decision?

 

[djd09]

Where Is DW?

i like to answer this question...waiving more appraisals

 

[Mejappz]

Yes. (assuming that the media report is both accurate and relevant to this particular market segment)

What do I win? Because if what you're complaining about is the fact that appraisers are getting away with not adhering to the requirements of their assignments that failure is on the individual appraiser for making those errors and omissions, and on the lenders for consistently accepting and using those reports despite knowing they're sloppy. It's not on the content of those standards, nor on TAF for promulgating those standards..

The existence of a speed limit doesn't automatically and by its mere existence prevent any driver -let alone all drivers - from exceeding that speed limit. The failure is at the adherence (by the individual) and/or enforcement (by the user and the govt) of those requirements, not in the composition or enactment of those requirements. For the appraisals you're complaining about it would be more fair to allege that your state isn't adequately enforcing their rules and regs on their licensees. Render unto Caesar that which is Caesar's and all.

Duh

Well then, we have a serious problem, don't we? Since COVID, I have either reviewed or seen close to 100 appraisals. Not a single one not one had the market increasing. I'm being dead serious here, not one. Every market of mine has seen appreciation levels of 15-25% annually. Checking stable when the evidence clearly shows the opposite is happening can have severe ramifications on the valuation of the property, especially in a market with few comparable sales. Lenders make different types of loans depending on market conditions.

Suppose you have to go back 6-12 months(or more) for comps in a market experiencing that level of appreciation. In that case, you will severely undervalue the subject property because you are supposed to bring those comps up to the valuation date. If, on the one hand, the appraiser knows the market is increasing and deliberately states that it is not well, they have violated the ethics rule. If, on the other hand, the appraiser does not know how to complete a market analysis (which is the meat and potatoes of any assignment), they have violated the competency rule. Either way, appraisers who do this work show neither ethics nor competency. Just wait until the opposite happens and the market crashes. It's one reason USPAP should be eliminated from secondary market work. Let the GSEs and FHA handle it. It's their certifications, their forms, and their rules.

By the way, I don't blame appraisers as much as I blame TAF and their horrid Qualifying education for this mess. You can also throw in the just as bad "Continuing Education," which is another way to fleece appraisers of money. And yes, I know what you'll say before saying it, "TAF sets the minimum standards blah, blah, blah. They own all of it, time to take responsibility and stop shifting blame around.

 

[djd09]

Well then, we have a serious problem, don't we? Since COVID, I have either reviewed or seen close to 100 appraisals. Not a single one not one had the market increasing. I'm being dead serious here, not one. Every market of mine has seen appreciation levels of 15-25% annually. Checking stable when the evidence clearly shows the opposite is happening can have severe ramifications on the valuation of the property, especially in a market with few comparable sales. Lenders make different types of loans depending on market conditions.

Suppose you have to go back 6-12 months(or more) for comps in a market experiencing that level of appreciation. In that case, you will severely undervalue the subject property because you are supposed to bring those comps up to the valuation date. If, on the one hand, the appraiser knows the market is increasing and deliberately states that it is not well, they have violated the ethics rule. If, on the other hand, the appraiser does not know how to complete a market analysis (which is the meat and potatoes of any assignment), they have violated the competency rule. Either way, appraisers who do this work show neither ethics nor competency. Just wait until the opposite happens and the market crashes. It's one reason USPAP should be eliminated from secondary market work. Let the GSEs and FHA handle it. It's their certifications, their forms, and their rules.

By the way, I don't blame appraisers as much as I blame TAF and their horrid Qualifying education for this mess. You can also throw in the just as bad "Continuing Education," which is another way to fleece appraisers of money. And yes, I know what you'll say before saying it, "TAF sets the minimum standards blah, blah, blah. They own all of it, time to take responsibility and stop shifting blame around.

no worries...your state approved punishment will be tied to a chair and watch lowballed on loop...woke jokes

 

[Terrel L. Shields]

Jobs that deal with the public have certain "rules" to abide to for public confidence.

Then we have failed.

We add transparency to the transaction

Isn't that what we were supposed to do pre-USPAP? I mean what appraisal society did not have an ethic standard pre-licensing?

No, it's not a trick question;

Opinion is just that. FNMA et al want to make appraisal a quantifiable practice which every single appraiser on the planet would draw exactly the same conclusions. no room for opinion.

that failure is on the individual appraiser for making those errors and omissions

And if they didn't think they made an error? USPAP COMPLIANCE is an opinion of the reviewer or user. It is no more FACT than any other OPINION. There are enough soft pieces to the puzzle that opinions overlap. Take an number of hundreds of posts on this forum in 20 years where people disagreed with someones interpretation of USPAP. We need go no further than this thread and any thread in the USPAP etal section, or the Improving the Profession section to find a host of conflicted opinion. They cannot all be "right." So we have people openly bragging they can find an error or violation of USPAP in a report SOMEWHERE WITHOUT EXCEPTION. So - as you know - I've argued that compliance is impossible or at least improbable. Someone else has a different opinion. And you do not have to go head to head with another appraiser in court to see that. And I was in one court where 4 appraisers were present and a fifth had filed a report but could not attend due to his daughter's wedding out of state. His report prevailed in court. Was it "better" than ours? Probably not but if fell between the two other sides so the judge selected it as the 'best'. How else could he have done it when A-he has no idea what USPAP says; B-he has no idea what the SOP of appraisers are nor anything about the body of knowledge we were supposed to be aware of; C - There was limited sales and no clear unadjusted nearby sale to hang your hat on. I would argue we all did the best we could even though the spread between high and low was 30%...yet, someone had to be wrong, right? You cannot expect identical results between appraisers. So who gets to arbitrate who is "right" and who is "wrong"?

As for boards, any number of boards have been reversed in court. So if the boards cannot even get USPAP right, why can anyone believe that USPAP isn't flawed big time? USPAP is unfixable. It is not an ethical document to look up to. It is a standard by which appraisers can and are punished without recourse by reviewers no better appraisers than those they castigate.

 

[Terrel L. Shields]

Not a single one not one had the market increasing. I'm being dead serious here, not one.

So without context are we referring to a year's data? Or a week? Perhaps the market was "steady" that week. Without an anchor, without a benchmark, what is "steady" and further what does it really mean? Is it steadily rising? Steadily falling? unchanging? What market is ever "unchanging" if nothing more than a seasonal change.

 

[Dublin ohio]

By the way, I don't blame appraisers as much as I blame TAF and their horrid Qualifying education for this mess. You can also throw in the just as bad "Continuing Education," which is another way to fleece appraisers of money. And yes, I know what you'll say before saying it, "TAF sets the minimum standards blah, blah, blah. They own all of it, time to take responsibility and stop shifting blame around

So if that's the case. How is it you are so good and the rest are that bad?

 

[Terrel L. Shields]

How is it you are so good and the rest are that bad?

see above

It is a standard by which appraisers can and are punished without recourse by reviewers no better appraisers than those they castigate.

 

[Fernando]

Well then, we have a serious problem, don't we? Since COVID, I have either reviewed or seen close to 100 appraisals. Not a single one not one had the market increasing. I'm being dead serious here, not one. Every market of mine has seen appreciation levels of 15-25% annually. Checking stable when the evidence clearly shows the opposite is happening can have severe ramifications on the valuation of the property, especially in a market with few comparable sales. Lenders make different types of loans depending on market conditions.

Suppose you have to go back 6-12 months(or more) for comps in a market experiencing that level of appreciation. In that case, you will severely undervalue the subject property because you are supposed to bring those comps up to the valuation date. If, on the one hand, the appraiser knows the market is increasing and deliberately states that it is not well, they have violated the ethics rule. If, on the other hand, the appraiser does not know how to complete a market analysis (which is the meat and potatoes of any assignment), they have violated the competency rule. Either way, appraisers who do this work show neither ethics nor competency. Just wait until the opposite happens and the market crashes. It's one reason USPAP should be eliminated from secondary market work. Let the GSEs and FHA handle it. It's their certifications, their forms, and their rules.

By the way, I don't blame appraisers as much as I blame TAF and their horrid Qualifying education for this mess. You can also throw in the just as bad "Continuing Education," which is another way to fleece appraisers of money. And yes, I know what you'll say before saying it, "TAF sets the minimum standards blah, blah, blah. They own all of it, time to take responsibility and stop shifting blame around.

I appreciate your insight. In my market prices didn't appreciate dramatically until 2021. In 2020 with Covid, market was mixed with difficulty of buyers seeing and sellers showing their properties. I saw this shortcoming and took advantage of it in getting a good deal. In 2021, when people were coming out and buying again that's when I see significant price increases.
We have "learned" to call market stable because lenders like stable markets. Unless we are very sure market is increasing, then we check box saying market is increasing.

 

[George Hatch]

Well then, we have a serious problem, don't we? Since COVID, I have either reviewed or seen close to 100 appraisals. Not a single one not one had the market increasing. I'm being dead serious here, not one. Every market of mine has seen appreciation levels of 15-25% annually. Checking stable when the evidence clearly shows the opposite is happening can have severe ramifications on the valuation of the property, especially in a market with few comparable sales. Lenders make different types of loans depending on market conditions.

Suppose you have to go back 6-12 months(or more) for comps in a market experiencing that level of appreciation. In that case, you will severely undervalue the subject property because you are supposed to bring those comps up to the valuation date. If, on the one hand, the appraiser knows the market is increasing and deliberately states that it is not well, they have violated the ethics rule. If, on the other hand, the appraiser does not know how to complete a market analysis (which is the meat and potatoes of any assignment), they have violated the competency rule. Either way, appraisers who do this work show neither ethics nor competency. Just wait until the opposite happens and the market crashes. It's one reason USPAP should be eliminated from secondary market work. Let the GSEs and FHA handle it. It's their certifications, their forms, and their rules.

By the way, I don't blame appraisers as much as I blame TAF and their horrid Qualifying education for this mess. You can also throw in the just as bad "Continuing Education," which is another way to fleece appraisers of money. And yes, I know what you'll say before saying it, "TAF sets the minimum standards blah, blah, blah. They own all of it, time to take responsibility and stop shifting blame around.

Why would you blame the appraisal standards for what amounts to Appraisal 101 errors and omissions? Topics, I might add, that licensees were tested on *by their state* prior to receiving their licenses? And adherence to which requirements are a condition of holding those licenses.

Do you actually believe the reason appraisers are not applying *upward* adjustments to sale prices (to increase them) or making errors with zoning or lot sizes or picking comps outside the area is because they were never trained how to do it, never tested on those topics, and are somehow incapable of doing it? Or did they just simply not do it? Do you really intend to run the old "TAF made me do it" excuse? Or can we just attribute to the individuals those actions the individuals are committing? And to their users apparently not caring enough about those adjustments to force those appraisers to make corrections and to stop making those errors.


And since you seem to think the GSEs and FHA are here to save the day, there's nothing preventing them from enforcing their policies, either. Certainly nothing you could attribute to either the content or origins of USPAP. So what's your excuse for them and why should we expect them to do any better than they've been doing? How are they any less complicit in the situation than any of the lenders?

TAF is responsible for what they do with standards and qualifications. They don't regulate appraiser conduct or limit user appraisal policies or enforcement in any way. As a concept, appraisal standards precede USPAP and will continue to exist long after USPAP is retired by whatever comes next. And you'll still be unhappy with it.

Most if not all occupational licenses have CE requirements. Guess how those came to be? By the hand of govt, not the professions. So you can go free-bleed about that somewhere else, too.

Aside from whining about the one employee's income at TAF and USPAP updates, 100% of everything you're complaining about in those appraisals is the result of the lack of enforcement, not the result of the SFR appraisers never being trained on how to appraise a tract home.