What does it Mean to Protect the Public Trust

[Mejappz]

Users get what they pay for, know what they are getting, and don't need protection.

I’ve been saying that for quite a while.

The people who always come to bail out the crooks are who USPAP should be protecting.

The only people TAF protects is TAF itself. They are deeply embedded in the DC swamp. The whole “public trust” shtick has made a small group wealthy. The entire document has failed miserably, and if it weren’t because it is ‘Authorized by Congress,” it would have gone out of business long ago.

 

[Mejappz]

Now I can get on board with that... Problem is - unless said folks are performing appraisal practice, they're not even bound to said document, so it doesn't really apply to them, right? It's just such an esoteric concept. IMO - they could have accomplished exactly the same thing had they said, "If you have a credential, don't lie, cheat or steal. And if you're not competent - get competent,"

But then how would they(TAF) amass a small fortune?

 

[Elliott]

I think of 'public policy' as a subset of economics. For example, if you are on a public utility board you would make decisions consistent with providing safe, affordable power to consumers. When they make decisions which result in less energy, more costly energy, then they are not fulfilling their responsibilities. Fannie seems bent on a set of policies that may potentially endanger the safety and security of the mortgages they are backing. Appraisers should be knowledgeable about their role in providing accurate, credible reports to the public and lenders, without advocacy to any particular stakeholder.

From Cambridge University:

"Overview​

All of us are affected by government policies, and governments place particular emphasis on economic policies. This course covers some of the most important questions about the aims and tools of economic policy. It will equip students to evaluate the economic arguments made about public policy choices.

All of us as citizens are affected by government policies, and governments place particular emphasis on economic policies. These are therefore prominent in political debate and in the news. Yet few people have the knowledge to be able to evaluate claims and counter-claims. This course covers some of the most important questions about the aims and tools of economic policy, ranging from competition policy and regulation to industrial policy, from public spending choices to incorporating behavioural psychology 'nudges' in policy decisions. It covers the role of the state versus the market, and the government's responsibility for sustainability. It will equip students to evaluate the economic arguments made about public policy choices."

 

[Terrel L. Shields]

FAQ 9

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The trouble is that the general public does NOT believe appraisers act nor provide credible results even when we do. Further, they seem to applaud the very ones who are providing "made as instructed" appraisals. This perverse relationship defies defense because we cannot prove anything - "Well, we closed it anyway at the contract price" - then we appraisers promptly use that sale as a comp on the next report. If inflated then, it is still an inflated sale as a comp but we have no way of knowing 3 of 4 times that the appraisal did not support the value. We can only guess. And failure to rubberstamp a pre-concieved value in the head of a seller or buyer...well that only gets you recrimination.

I valued an estate (minerals) DOD 2015 - based on mineral prices then although not until 2 years later the heir found out they needed a value for step up basis. Market fell in 2016. So 2015 prices were higher than 2017..much higher. Heir is happy. Step up basis meant virtually no taxes. So the heir then is trying to sell - did not want a current value when ordered the appraisal. Complained she could not sell the properties for that much now...duh. You've taken 2 years of income from the property and it's worth less today because gas went from $4/MCF to $2. What did you expect?

I think what I am saying is the general public thinks of this as a "quant" issue. We are merely providing a mathematical service and not a real opinion. Further I feel like the GSEs really want it to be a math issue, and not an opinion. That's apparently the reason behind these do-not-use words that their own documents are full of. How anyone can claim "average" or "good" "desirable" is anything but a reasoned opinion based upon the appraisers judgment, I donno. I don't see how that is 'racist'. But FNMA seems bent upon making the appraiser PROVE an adjustment not to merely SUPPORT it.

When they make decisions which result in less energy, more costly energy, then they are not fulfilling their responsibilities. Fannie seems bent on a set of policies that may potentially endanger the safety and security of the mortgages they are backing.

Maximize private profits and public risk. Uncle Sugar will bail you out while all the time blaming appraisers. We cannot win.

 

[Amy Perkins]

We all know the phrase - it's the first sentence of the Preamble to USPAP. I've long been told that it is appraisers' responsibility to uphold the public trust. That's not what the document says, though... it says the purpose of USPAP is to promote public trust. Slight difference IMO... nonetheless, I've even been known to preach the mantra that appraisers uphold public trust by providing credible appraisal services. After much thought, however, I'm not sure we do. Who is 'public' anyway? Users of our services? Public in general? Well, public in general barely know what an appraisal is - much less what USPAP is, so it can't be them. What about users of our services? Is that 'the public'? In my mind it has to be - which means we are (in theory), through adherence to USPAP, maintaining the trust of the fat cats who have stock in/or own banks, CU's, etc., and the overlords at F/F/FHA/VA. But..... it should be obvious to even the casual observer that even they don't trust us. It is no longer sufficient to make a statement or an opinion in relation to our expertise - that statement or opinion (regardless of how obvious it may be - will be questioned and documentation will be required to verify said statement(s). So, then, our services - even when rendered in a manner that is meaningful and not misleading (by some) - are not trusted. Which begs the question: Why is that? Why don't the users of our services trust our opinions and conclusions? IMO - because many of us either aren't capable of, or fail to, provide services in a manner that is meaningful and not misleading. Can that perception be changed? I'm afraid not at this point in the game.

All loans are based on sales, which rely on public trust to not rip people off, or rip off banks, who hold our deposits, or real estate investment trusts that hold this debt and the people who invest in them. Our insurance companies that we pay premium to is rated on the public trust of honest appraisals. It affects nearly everyone, one way or another. An act of Congress made Dodd Frank so we wouldn't be in 2007-2008 again. However, the time has come where a small group of people think what Congress passed doesn't seem to matter. Fannie Mae partnering once again with AMCs, AVM, Valuation Modernization is now the buzz word. How much power do few people need, enough to corrupt loans? What about their close relationship with Bank of America and Corelogic? Is it right to allow the same people that sold those bad loans at countrywide to defraud and take property ownership from the American people? Why so we can be a nation of renters? The new loan package by Bank of America will bankrupt everyone and it can happen so much faster without our appraisals; means all your A paper will turns to B paper. Since the appraisals are controlled by only a few AMCs and scab appraisers, our insurance will skyrocket. When they all foreclose on the loans, guess who is going to buy them up?

 

[alebrewer]

Appraisers should be knowledgeable about their role in providing accurate, credible reports to the public and lenders, without advocacy to any particular stakeholder.

No doubt. But when you're providing (hopefully) credible and competent services, is your goal to promote and protect public trust? I know mine isn't... as you say - that seems to me more of a mandate for those who (in the words of another poster) drive the direction of the industry... folks who aren't obligated to adhere to USPAP, because they're not actually providing appraisal services. Seems a bit backwards to me.

 

[alebrewer]

The trouble is that the general public does NOT believe appraisers act nor provide credible results even when we do. Further, they seem to applaud the very ones who are providing "made as instructed" appraisals.

Exactly! The public (and again I dislike that term) only believes an appraiser when said appraiser agrees with them. In which case, they don't 'trust' the appraiser at all... they're just looking for confirmation of their own opinions. If the appraiser disagrees with said opinions - the appraiser is the one who lacks competency. This is true of RE agents, homeowners, AND lenders.

 

[George Hatch]

IMO the FAQ is redundant. If you read the sentence out loud from the source material upon which that FAQ is derived it's meaning and the reasoning for its meaning is obvious and apparent. No further elaboration necessary except when people pull the one clause out of the context in which it is used.

If the FAQ clears anything up for a reader beyond the 1st sentence in USPAP then that's great, but I'm sure if someone pondered the sentence within its full context in the first place they wouldn't have learned anything new from the FAQ.

 

[alebrewer]

Our insurance companies that we pay premium to is rated on the public trust of honest appraisals.

Interesting take - I like it! But...are our premiums really tied to our competency, or are they tied to our ability to avoid prosecution?.... which, I guess, is a competency in and of itself.

 

[ucbruin]

"The trouble is that the general public does NOT believe appraisers act nor provide credible results even when we do."

This phase makes it sound that appraisers don't provide credible results....

In general, why do you believe that the general public doesn't trust appraisers....

"EVEN WHEN WE DO"....
Sounds funny....