Originally posted on AppraisersBlogs 04/04/2018Front and Center
Remember those dreaded book reports in grade school? Remember the oral presentations in front of the class? We did not think much of it then, but this was the beginning of public speaking. Fast Forward to today: Our appraisal reports are similar to those dreaded book reports except there is no oral presentation, no public speaking. No way to BS your way through it because you only read the Cliff Notes, not the actual book itself.
We have come a long way and today we write reports that speak to the reader. No Cliff Notes, no text to highlight, but reports created by us based on our observations and research of the market. The standard forms do a simple basic function that are nowhere near adequate to tell our story, so appraisers expand to addendums, charts, graphs, photographs, etc. Appraisers tell the story of the property and the neighborhood.
When USPAP was revised a few years ago requiring appraisers to disclose prior service, the software venders all came out with a USPAP Identification page. I, like many others, chose not to use this form and simply place my disclosure of prior service elsewhere in the report. After all, our reports were long enough. Last week, The Appraisal Foundation issued a Q & A on this very topic. I actually took the time read this one as there were discussions on this very topic recently in some forums and there was definitely a division of opinions.
Well, I must thank the Appraisal Foundation for clarifying what is expected and required. Not because I discovered I may not be in compliance by not having my disclosure as a signed certification, but I discovered a missed opportunity; a missed opportunity to tell another story. A Story that has absolutely nothing to do with the value of the property; the story of my fee!
Many states require the appraiser to disclose the fee paid within the report. I now use the USPAP Identification page for the prior service disclosure. I also utilize this page as my fee disclosure. You see the center portion of this page clearly states:
“Comments on Appraisal and Report Identification”
Note any USPAP related issues requiring disclosure and any State mandated requirements”
Well my State requires I disclose the fee I was paid for the completion of the appraisal. Not only is my fee disclosed in this section, it is highlighted in BOLD type and is a larger font size. This page is now the very first page in my report!
My fee is Front and Center on the very first page. The story of my fee has told to the consumer, not buried on page 26.
TJ Elliot, Certified Residential Appraiser
Zillow, The First “Agent Management Company” (AMC) for the Real Estate Agent
Brokers and Agents, welcome to the appraisal world. Zillow is the first “Agent Management Company” (AMC) for your side of the Real Estate Industry. Yes you read that correctly. Zillow’s actions have many similarities to Appraisal Management Companies, so it is fair to say, they are the first “Agent Management Company”
“Zillow is hurting the people you are licensed to protect”
Doesn’t that sound very familiar to what appraisers have been saying about Appraisal Management Companies? On the website www.stopzillow.com, Greg Hague, a Real Estate Attorney, Broker and Huffington Post writer, describes Zillow’s actions as “deceptive, defective, and a glorified lead gen scam.”
According the website, Zillow’s “Instant Offers” helps sophisticated investors buy homes from unknowledgeable consumers at thousands below market. In contrast, Appraisal Management Companies have been selling appraisals to unknowledgeable consumers, hundreds above market.
According to the website, Zestimates have misled consumers for years regarding their homes value. Zillow continues the program as they profit from the sale of leads back to the agent. In contrast, Appraisal Management Companies have misled lenders on the value of their services. They continue as they profit from taking a percentage of the appraisers fee.
And the kicker in all of this, the website is a petition for the National Association of Realtors to take a stand and force Zillow to stop. It has over 33,000 signatures. In contrast, Appraisers have been asking the Appraisal Institute and National Association of Realtors to take a stand and put a stop to Appraisal Management Companies abuses.
And now we have silence from the two largest National Trade Organizations…..
In the article Zillow Doesn’t Even Own the Photos it Threatened to Sue a Popular Blogger Over by Nilay Patel, posted on theverge.com on 06/27/2017, Zillow attempts to brow beat an independent blogger for copyright infringement for photos they do not even own. In contrast, The FTC, encouraged by AMC’s, filed action against the Louisiana Real Estate Appraisal Board for enforcing The Dodd-Frank Federal Law.
There is a quote on the website www.stopzillow.com by Margaret Mead,
“Never doubt that a small group of thoughtful
committed citizens can change the world;
indeed, it’s the only thing that ever has.”
Join your state coalitions. Make a difference in your future.
Please share this with your Brokers and Agents.
Weeks ago VaCAP sent out an open letter to the AMCs. This letter was republished by many coalitions, and
appraiser groups across the country; liked and shared on Facebook and broadcast
on several industry blogs. VaCAP received an overwhelmingly positive response
from the letter. We even heard from several Realtors applauding our efforts!
Activity is still ongoing with comments. Click here to see the letter.
heard you loud and clear......The letter can now be signed
by individual appraiser on AppraisersBlogs. We will gather signatures
and submit the signed letter to the FDIC, CFPB, Comptroller of the Currency and
the Federal Reserve BoardNote: To protect the
appraiser identity from retaliation, only the initial of your last name and
state will show on line. The copies sent to the FDIC, CFPB, Comptroller of the
Currency and the Federal Reserve Board will have the your full name.
authorizes anyone to use the letter. Several appraisers have asked to send our letter in
response to AMCs soliciting them for fee and turn time. Please feel free to
customize the letter as you see fit.
To sign the letter, click
Thank you for
Copyright © 2016 Virginia Coalition of Appraiser
42314Richmond, VA 23242(804) 741-4968 All Rights Reserved.
An appraiser who will remain anonymous tells us …………
“within the last week, I have had two issue of concerns with “UAD” compliance and ACI Sky Delivery ( I can hardly write that; as, it is a significant source of stress when I have to deal with it). I have tried to submit reports, with issues that prevented the upload (no surprise with “Sky”). The first involved the 1004MC form. The comparables that were available for the subject were extremely minimal – something like 4-6. The last period only included 1 comparable (no valid data). The trend indicated “increasing”. However, in our area, the trend is really demonstrative of “stable” at this time. The trend on page 1 of the U.R.A.R. indicated “stable”. There was explanation on the 1004MC form as to why the trends did not match. The representatives of the company associated with the order indicated that they had to “match”. I related that they did not, based on minimal data for comparables specifically, with an explanation as to why they didn’t necessarily match. As, page one represents the subject’s area market, and 1004MC is representative of comparable specific data. They insisted that I just use general market data for the 1004MC, so that they would match. In order to be compliant for USPAP and not be misleading, I included two 1004MC forms, with an explanation of why two were associated. However, they insisted that I remove the comparable specific form. In the end, I did not and they finally processed it. This brings up concerns, as noted, in that “conforming” to these processing software systems will, in a lot of cases, be misrepresentative, and ultimately we are appraising to the review/processing systems and not necessarily a true representation.
The second scenario was with an REO property. The “as is” value + the estimated cost for the repairs was not equal to or greater than the “as repaired” value. Well, no kidding. This is often the case, depending on what the repairs are, etc. It would not go through the system on this basis. Ultimately, I did not change the report. However, it is an ongoing concern with regard to what is happening by these software review processing systems and the insistence that we conform to “make it work”.
This appraiser goes on to say “ACI Sky is a delivery system for AMC’s. I work with several who use this system. It provides the companies ‘pre-screening/review’ for reports being submitted. The point here is that anyone that encounters this system will have the same responses. I have had other companies indicate that page 1 of the URAR and the 1004MC have to match. But, again, this is not always the case in reality.
I am not concerned with being compliant with USPAP, because I either do not comply with what they are requesting, or at least make a disclaimer in my report regarding the factors associated.
I am concerned with how many appraisers out there may be giving in to the system? More and more AMC’s are utilizing the ACI Sky delivery system; and, there are other systems that cause similar upload issues. These systems cause immense frustrations, as they prevent uploads multiple times, and don’t always give the same error each time. As one of my colleagues related, dealing with these systems mke you want to throw your computer across the room”.
……so appraisers, the question is are you having similar difficulties with ACI sky ? If so, please comment and we will contact them and advise them of these issues.
ACI is “a leading innovator and provider of software solutions in the valuation industry for thirty years, has brought advancement and technical achievements to mortgage servicing that led to the complete automation of many paper-intensive reporting processes” and are coincidentally NOW owned by First American / Corelogic.
An AMC sent an appraiser the following email this morning:
".....customary and reasonable fees are compliant under Virginia presumption that rates are based on recent rates paid to a representative sample of providers of appraisal services in the geographic market based on the fee schedules of these providers. Please complete the attached form and submit to: “
Wow are they confused about customary and reasonable fees! This is a severe twist on Virginia Regulations for customary and reasonable fee compensation to appraisers. Virginia Law mirrors the language in the TILA. They are essentially the same. The verbiage in the email sent to appraisers by this AMC is just WRONG!
The Virginia Real Estate Appraiser board attempted to make things easy for AMCs. On February 23, 2016 the Virginia Real Estate Appraiser Board adopted the United States Department of Veterans Affairs’ Roanoke Regional Loan Center Appraisal and Inspection Fees Schedule as a presumption of compliance. This was a gift to the AMC’s, but I guess some just don’t want to accept it..
The Virginia Real Estate Appraiser Board created a Guidance Document for AMCs and appraisers to help understand the law. VaCAP sent a copy of the Guidance Document via email and US Mail to the address of record for each AMC licensed to operate in Virginia. As AMCs did not like this clear guidance, they began to twist things around, or just ignore the parts of the legislation they did not like.
As many were still confused, or trying to avoid paying appraisers a customary and reasonable fee, the Virginia Real Estate Appraiser Board published additional guidance on DPOR’s website. They in turn sent this additional clarification along with a copy of the original Guidance Document to each AMC and appraiser licensed to operate in Virginia.
The Virginia Real Estate Appraiser Board has gone out of its way to help the AMCs. ... It boggles the mind why some refuse to accept it!
And here we are today….. The final rules have commentary associated with them explaining each and every provision of the Dodd-Frank Act including customary and reasonable compensation to fee appraisers. Even if you don’t like the rules, we all must follow them.
Click Here to see exactly where this AMC falls short!Please tell us what you think.