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Working RE Magazine in the mail to you

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David Brauner

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May 16, 2002
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General Public
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California
Hi all,

This is David Brauner (former editor of the Communicator). My new magazine, Working RE, is in the mail to you right now. I hope you find it useful.

It contains a thoughtful debate between two respected appraisers on the Georgia proposal to sunset the ASC and move more control to the states (you'll recognize the authors). A very useful “how to” on PDFs, a piece that takes you inside the new USPAP instructor course and much more.

I’m asking that you please sign up or “register” for it at my site www.workingre.com, which will help me reduce the postage category and keep a better handle on circulation. As always, please send along your feedback/story ideas and submissions.

Thanks to every reader and to every advertiser for your support! My goal is to have it become the publication of record for this industry. Let me know how I did!

David
www.workingre.com
 

Francois K. Gregoire

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Florida
David,

Looking forward to the delivery of the magazine. The online edition of the Point - Counterpoint turned out well.

George, if you see this take a look.

The link will not work without free registration, but try THIS
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
I just read the dialog in Working RE by George Hatch and Francois K. Gregoire. It is at this address: http://www.orep.org/value_added/safe/Point...ounterpoint.asp
Having read the dialog, I am totally confused and would like some clarification from one or both of the authors. I see contradictory logic in this dialog. They start off it appears by embracing state’s rights and appear to advocate a return to that system with each state running its own ship, then make the case of the failure of many states to act and or engage in very bad policy. How can you have every state doing their own version of USPAP and have uniformity? Where would our economy be without the Uniform Commercial Legal Code? It was my understanding that the purpose of the whole setup was to protect the national banking system and national economy. I am a state rights person, but it seems to me to be irrational to try to achieve uniformity by having 56 separate kingdoms doing it differently and at the same time expecting them to interpret USPAP and enforce it uniformly.

If USPAP is interpreted and applied the same in all states, then what sense does it make to have reciprocity? A national license makes more sense to me. But how can you have a national license with 56 different sets of supplemental state rules and interpretations? That results in a total lack of uniformity.

“Francois Gregoire - States have the right to set the standards of practice within their borders. We might not like it and we may disagree. But how, exactly, is the public harmed by an individual state adopting certain requirements for practice?”
“George Hatch – Much of the difficulty in implementing temporary practice and reciprocity in the various states is attributable to the states themselves, over the express objections of FIRREA and the ASC. Removing the ASC from the regulatory loop will not address any of these problems and will likely make them worse.”

As I said in the beginning, I be confused.
 

Francois K. Gregoire

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Hi Austin,

Going back and taking a look, I can see how some of the comments might not be clear. If memory serves, it was prompted from a discussion here in Wayne's World that started from comments made about the 'Georgia Initiative'.

Reading the Point - Counterpoint might be better after reading the full text of Charles Clark's remarks to the NAR Appraisal Committee. David has that posted on his site also.

The comment made by me about state standards of practice is confusing. It was not meant to refer to USPAP, but to standards for licensing. I did not mean to infer States should or could adopt their own Standards of Appraisal Practice. If that's what I meant, I should have used those words. Sorry for not being clear.

What I was trying to express is that States have the right to adopt the Standards (minimum qualifications) for licensure/certification within their boundaries. Of course, these must be at least equal to the minimum standards promulgated by the Appraiser Qualifications Board of the Appraisal Foundation.

States, however, could, and do, have additional requirements. For instance, some states have education requirements or experience standards in excess of the minimum AQB Criteria. Some states, like Florida, require a knowledge of the Florida Regulatory Scheme and Florida Real Estate Appraisal License Law. Some states test on this additional criteria.

Since states generally enact appraisal laws as an excercise of their police power, the responsibility of the regulatory agency is to protect the public. Having 'State Specific' licensing standards could be viewed as efforts to fulfill that charge.

Does this help?
 

George Hatch

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Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Austin,

Frank's position in the article is in support of the "Georgia Proposal" which would abolish the Appraisal Subcommitte and remove the Appraisal Qualifications Board (AQB) of The Appraisal Foundation from its role in establishing licensing qualifications criteria; and basically allow the states to set their own qualifications for licensing. My position is to retain, but strengthen the existing system of federal oversight and enforcement over the state boards. As Frank said above, this article is somewhat an extension of the debate that started on this forum a couple weeks ago.

The source of your confusion may lie in the fact that although Frank and I are presenting two different views, we aren't doing so in a truly adversarial, the-ends-justify-the-means, scorched earth manner. For my part, there is no point in denying that there are problems with the existing system or that some of the complaints highlighted in the proposal may have at least some merit. For example, the perception held by some of the states that they lack enough input into how the the appraisal standards and qualifications are set.

I have a great deal of respect for Frank and his efforts on behalf of the appraisal industry, a respect that I'm sure most of the participants on this forum share. We are both advocates for a licensing system that will accomplish its designated task. Where we differ in our opinions is on the proper breadth of those goals and how best to achieve them.

There is a survey on the website that poses the question to the readers. I'm hoping that the readers will read the article and participate in the survey. It would be interesting to see where other appraisers stand on this issue.


George Hatch
 

David C. Johnson

Senior Member
Joined
Jan 15, 2002
<span style='color:darkblue'>I read the "debate." My thanks to George and Frank for participating, and to David Brauner for hosting and posting it on his new website. I took some notes including from hyperlinks on the site, and have some comments based on them. I also have a suggestion of my own for some significant improvement which will be mentioned in this post, but more fully developed in future posts on AppraisersForum or elsewhere.

Charles Clark is Georgia's Real Estate Commissioner and is therefore also head of the state's appraisal board (I surmise). I reread a presentation he made regarding Georgia's recommendations for changes in the regulation of appraisers and appraising. While Georgia's initiative calling for the review of the efficacy of the current system is to be commended and may prove to be a positive, Mr. Clark simply did not have the luxury of being completely candid with the facts in order to successfully sell his point of view. The following statement is badly flawed:

"...All states now have regulatory bodies established consistent
with the requirements of Title XI, and those bodies are acting
to remedy or remove incompetent practitioners and to remove
the unscrupulous."

Had he said: "...and some, or even most of those bodies are acting to remedy or remove incompetent practitioners and to remove the unscrupulous," I would not have a problem with it -- but he would have. The addition of these accurately qualifying words would have been a fatal admission. It would have ruined his argument for the virtues of turning over all appraiser regulatory functions in the nation completely and individually to each states' politically appointed appraisal board members, and also for eliminating the Appraisal Subcommittee (ASC) and the Appraiser Qualifications Board (AQB). While there are others, the reason some of our state boards are not performing as intended is because some of the appointees themselves qualify as being "incompetent practitioners and the unscrupulous." This is a significant flaw in his analysis, and one that would be exacerbated by the elimination of, rather than the strengthening of a federal authority. There is little doubt that changes are needed; it is just that -- regardless of how well intentioned he and Georgia may be -- the changes actually required are nearly the opposite of what he has recommended, just as George has discussed.

Also, Title 11 and its subsequent regulatory structure were intended to apply specifically to federally related transactions, where the states obviously lack jurisdiction. But more significantly, each state's primary function is to look after itself, as opposed to the welfare of other states and the country as a whole. This, Georgia's proposal, is just such an example. Georgia's current board believes its suggestions are best for Georgia (and/or best for the current board members and staff), while being relatively unconcerned about other states where they must be aware their proposal could be a disaster (a national disaster). They must also be aware that their proposal could be bad for the profession as a whole -- but again, this is not their problem and is not their concern. Georgia's current board is right about a need for an amendment to Title 11, they're just suggesting the wrong changes where the best interests of the country and the profession are concerned. The multiple-kindom approach is not the way to go.

The ASC made a good move with the USPAP Instructor Certification. That was necessary and well advised. A Title 11 amendment should specifically and explicitly include the granting of this authority and more. As has been said before, an additional step must be to implement USPAP Enforcer Certification (i.e., the ASC USPAP certification of state appraisal board members, and prosecutors, and sometimes, investigators). This is because appraisers must always opt for adhering to the manner regulations are enforced as opposed to how they are taught. And has also been said before, the associated mandatory testing involved eliminates the successful appointment of an entire class of grossly inappropriate appointments which otherwise will continue in force in many states around the country. In engineering circles, such is known as an "elegant solution." It is such a solution.

However, the ASC itself needs significant reform -- specifically in its membership composition. The appraisal profession was intended to function as the taxpayer's regulator of the lending profession -- not the other way around. The Financial Institutions Reform, Recovery & Enforcement Act (FIRREA) is just what it sounds like. It was an enormous Act of Congress to correct and police the nation's errant financial institutions -- while they were being bailed out at one-half of a trillion dollars at taxpayer expense for foolish excesses and misjudgments on the part of some. ("Foolish" now only applies to the country and the taxpayer since hordes of those most responsible personally profited enormously while those they mentored, who are now in active control, took careful notes in anticipation of their turn to follow). FIRREA was in direct response to the outrage of Lending Debacle 1 in the late 80s, and its Title 11 provisions regarding the appraisal profession were intended to help postpone or eliminating Lending Debacle 2 tenatively scheduled for later this decade. However, as planned, the mentored of the lending profession now largely control their own regulators again, including perhaps the ASC which is conveniently force-funded by the police force they have helped to undermine -- the nation's real estate appraisers. This is nothing new since our country's regulators rarely if ever function as intended to protect the welfare of the citizens and the country, but rather function to enhance the regulated at the expense of the citizens and the country in return for promises and rewards for services rendered. Money talks. Loudly and convincingly. I believe the implementation of my suggestion (actually the suggestion and plea and demand of many for many years even when the stakes were not nearly so dire) found at the conclusion of this post, will greatly improve this situation. First, some quick thoughts on a couple of other current appraisal regulatory issues:

1. Online Learning for CE Requirements
Obviously an Excellent Idea
(no reasonable, honest argument exists against it)

2. Proposal for College Degrees or Equivalent for New Entries
Obviously an Excellent Idea
(no reasonable, honest argument exists against it)

Collective and individual human activities in a free enterprise capitalist system are motivated and modulated by greed and fear. The carrot and the stick. Our society depends on this combination for a healthy survival. The two compliment and counterbalance each other. The greed component of the mix has been allowed to greatly trump over the fear component for some time. Equilibrium must be reestablished or the system fails. For example, the stock market will not return to anywhere near previous levels for many decades until some minimum number of offenders are stripped of wealth and go to prison to reestablish the fear factor in others who are tempted to follow their lead, but instead will now be motivated to modulate their own behavior. Should offenders go unpunished, the greed quotient will further flourish unchecked on the part others in similar positions who will be greatly tempted and emboldened by what they see. Potential investors and reinvestors -- institutional and private -- existing in this country and around the world can see too. They will not participate in our markets because they are not fools. They have alternatives. Thus, the system fails in chaos. So do we.

The US Congress and the Office of the Presidency, regardless of new found vision or the soundest of current intentions, are greatly impaired in their abilities to respond responsibly because they are on the take -- with most or all of it being entirely legal. The single most imperative Key Ingredient for fixing problems in real estate appraising and lending, as well as all remaining problems in government and commerce including gross corporate excesses, our sabotaged stock market, and our compromised national security, among others, is Campaign Bribery Reform. If there is a root of all evil, this is it. More later.

Just my opinions,

David C. Johnson, Appraiser & Scientist</span>
 

David C. Johnson

Senior Member
Joined
Jan 15, 2002
Note:

I have significantly rewritten the preceding editorial of mine since its posting yesterday.

Thanks for reading.

dcj
 
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