Jonathan Miller

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    • #8784 Reply


      November 23, 2018

      Rumormill: AI National Is Going To Try And Take All Chapter Funds AGAIN

      It’s been two years since senior executives at The Appraisal Institute headquarters in Chicago, referred to as AI National, attempted to seize local chapter funds. I was just told by a trusted source that AI National will move forward on the “taking” plan.

      From AI National’s perspective, another attempt to steal chapter funds makes perfect sense because:

      – They only “suspended” the first attempt and subsequently referred to chapter funds as “their” money in discourse with chapter leaders.
      – They have not publicly addressed membership outrage of this attempt (no plausible reason has ever been given).
      – They have done NOTHING with their residential appraisal panel – it was just a PR stunt.
      – They have continued to drift into irrelevancy in Washington, DC regulatory circles.
      – They named a 2x president their new CEO who was a key part of their decade-long drift into irrelevancy after sitting exactly a year on a sham election process but to be paid $400K. They bumped up his pay from the toxic former CEO who left in the middle of the night.

      It’s why I entered the conversation in 2016, providing regular takedowns of this fraud.

      Coester Chronicles: I Hope CoesterVMS Doesn’t Owe You Any Money!

      There has been a lot of discussions circulating this week after VACAP broke the news that the Coester VMS has run out of funds to pay for the appraisals they ordered. A law firm acting on the behalf of FVCBank, a CoesterVMS client, has sent a letter by email to appraisers providing the point of contact for those looking to collect their fees. I would assume that this bank seized their assets. I don’t know whether they represent any other banks in this situation.

      From AppraisersForum, Andy Arledge of Freedom Appraise, one of a number of new A La Mode competitors, commented:

      Here in Appraiserville’s ‘Coester Chronicles’, Appraisalblogs, Appraisersforum, and other sites have been warning appraisers for more than a year that this day may come. The word around the industry back then was that Coester owed millions in appraisal fees. If true, I can only assume appraisers are owed millions more now.

      Hopefully, this will all come out in the wash but sadly, appraisers shouldn’t count on obtaining their long-owed Coester fees.

      The intense lessons to be learned are:

      1) AMC’s often demand proof of an appraisal firm’s business viability to receive work, yet it is clear that this demand should cut both ways. Recent news about Coester and Clarocity make that clear.

      2) Unlike in the past, residential appraisers now have resources including on the ground blogs, Facebook groups and individual appraisers providing transparency and advocacy that are both readily available and free. Start reading all these sources regularly – get involved – these resources are motivated by a sense of right and wrong (because there isn’t any income to be found in their efforts).

      AMC Clarocity Cash Flow Shortages Funded by iLOOKABOUT

      As the headline says, Clarocity (CLY) Reaches New 1-Year Low at $0.01 on November 19th. Trading was haulted by Canadian regulators on November 15th.

      And this press release:

      iLOOKABOUT Enters Into Non-Binding Term Sheet for the Purchase of Assets of Clarocity Corporation

      Here’s one take.

      Appraisers should be very concerned about getting paid for their services until more is understood about this financial jiu-jitsu.

      16%: Hybrid Fees Show Perceived Value of Valuation Expertise By Mortgage Lenders and AMCs

      Here’s the math:

      An appraiser shared an email survey concerning hybrid appraisals. The survey reveals the fees they are thinking of charging. These fees aren’t that different from what I’ve heard elsewhere.

      It’s actually quite telling on how the AMC/Mortgage Lending industry sees the appraiser’s role in providing a reasonable benchmark on their collateral to make more informed lending decisions.

      Here’s the scenario – take the $78 national desktop report fee and divide it by the $500 average appraisal fee as quoted by Realtor Magazine. Now think in terms of the inspection versus valuation.

      $78 Valuation / $500 full appraisal = 16%. Don’t get me wrong. Appraisers are willing to work for $78 on desktop valuations but many have little choice in the submarkets they cover. It also shows how the valuation expertise is viewed as a commodity and not a skill that takes years to obtain.

      The fact the mortgage industry thinks a $78 expense is a reliable expenditure for a reliable valuation suggests we will be looking at a significant mortgage bubble in the future.

      To all you 16-percenters out there – start taking stock of what you are really worth.

      Regulators Are Pushing Hard for Requiring No Appraisals For Most U.S. Mortgages Part I

      Next week I dive deeper into the anti-quality valuation sentiment outlined in the Treasury outline.

      The federal government is pushing to eliminate the need for appraisals under $400,000. I threw together a quick analysis of how they are effectively saying that no appraisal is needed for nearly all mortgage applications nationwide. It’s kind of amazing. I’ll devote more time to this issue next week after the tryptophan wears off (ok, ok that’s a myth).

      A deeper dive is coming next week.

      Jonathan Miller
      REIC Forum Moderator

    • #8783 Reply


      November 16, 2018

      Appraiserfest Recap

      Just one more look back at a stunning success…Appraiserfest.

      Take Non-Appraisal Seminars

      Up your game – differentiate yourself from your competition.

      We all attend appraisal seminars or take online courses to fulfill our CE requirements, but I implore you to consider other types of seminars if it provides value to your practice. Fifteen years ago I took an all-day class for fun to gain insights on presenting data. It was taught by Edward Tufte and if he is ever in your vicinity, I highly, no, enthusiastically recommend the course. The topic was relevant at the time and is relevant today. It was a spectacular class and the materials are the best out there. I applied what I learned to my market reports which came along later. Well, Friday I’m going to Brooklyn to take it again. I can’t wait.


      Jonathan Miller
      REIC Forum Moderator

    • #8782 Reply


      November 9, 2018

      Appraiserfest Has Your Back (And Your Teeth)

      After an amazing Appraiserfest conference in San Antonio, I had to have an emergency root canal. So for protection, I wore my Appraiserfest t-shirt and all went well. Proof positive that the Appraiserfest movement has your back (and teeth).

      What The Appraiserfest 2018 Conference Happening Meant

      I can’t speak for each attendee at the San Antonio happening but I can say what it meant to me:

      – A big thanks to Phil Crawford, Mark Skapinetz and Lori Noble for making the dream happen!
      – There was LOVE everywhere – I can’t tell you how many people I spoke to teared up when they talked about the event
      – This was the first “non-trade group” appraiser-centric event in history
      – About 80% of attendees (my rough poll) had NEVER attended an appraisal conference before
      – A documentary crew interviewed a number of appraisers about their experiences during the financial crisis

      – It was “appraisers-only” so everyone was relaxed and open for discussion
      – It was not a “complain-fest” and was orientated towards the future
      – The event was entertaining and upbeat at all times – like a rock concert
      – There was almost no “whining” (and we’re good at that) since the purpose of this event was to inspire appraisers to look at other business opportunities right in front of them
      – Appraisers who were military veterans were honored in a moving ceremony

      – Attendees were inspired to share their successes such as operational tips and new sources of business
      – Appraisers were lauded for their valuable skills instead of being “beat down” by the entire mortgage world as a cog in the mortgage machine
      – AMCs were not regularly dissed during the sessions despite their damage to the quality of valuations, partly because lenders are just as much at fault and we can’t solve the AMC problem ourselves
      – Most appraisers said they continued to be pressured to “hit” numbers by lenders and AMCs
      – The appraisers that attended were taking responsibility for the future of their careers
      – The mortgage valuation arena is going to lose more of the brain trust of residential valuation if they don’t rethink waivers and hybrids
      – It was widely discussed that hybrid products increased turnaround times and reduced valuation quality so there was general confusion as to why AMCs were aggressively pushing them (it is just another source of business revenue, otherwise no advantage)


      – Our largest industry trade group focuses on fear and “how not to get sued” – none of that at Appraiserfest
      – Many attendees won’t be able to get the image of Mark and Phil in bubble suits out of their mind (they’re not sorry about that)

      – I always had Frank Black’s song “Czar” as my fantasy intro music and gave my song request to Phil before he even finished asking the question

      – I finally got my own “G5”

      Cheaper = Less Reliable

      I saw this on Mark Skapinetz’s 100% RE Appraisers Facebook private group and I hope he doesn’t mind. This image says it all.

      Remember that many financial institutions embrace this misinformed think because of the federal backstop.

      Banking Propaganda About Appraisal Services Ignores Keeping The Public Trust

      This is a super dumb interview, seriously.

      Jonathan Miller
      REIC Forum Moderator

    • #8781 Reply


      October 19, 2018

      Appraisersblogs Pushes Out Our Content For An Industry Under Siege

      The appraisal blog aggregator “Appraisersblogs” regularly takes content from my Appraiserville section of Housing Notes without asking but always links back. Normally I get annoyed with that, but in this case, I am very grateful because it pushes out my thoughts to an ever wider appraisal-related audience as they do for my appraiser colleagues who also write. Since we have been abandoned by The Appraisal Institute and are in the way of “progress” by financial institutions (who only seem concerned about raising lending volumes because they will always have the federal backstop), the more insights shared in public outside of our industry is for the better. Thanks, Appraisersblogs.

      Response (Part I): AI National Damaging Appraisers Livelihoods

      Over the past month, I have been writing about SB-70, a California Law that allows appraisers to get a pass and do evaluations on the cheap and not have to verify anything in their appraisals. After all, what MAI or SRA doesn’t want to do an appraisal on the cheap so they can compete with dog-walkers, pool-cleaners, and TV-repairmen? It is what every residential appraiser wants to do because obviously, they can do it better than a septic tank-cleaner or ditch-digger who does evaluations on the side. Appraisersblog posted my thoughts on this from an earlier Appraisersville post I wrote and, the comments began to fly.

      Passions ran high on the blog after Charles Baker, SRA, AI-RRS, and SCCAI Chapter President 2018 criticized me for essentially being uninformed about the law. Here’s a snippet of the “compliment followed by an insult” observation on his part:

      Jonathan – While I applaud your passion on this and many other issues affecting our profession, your breathless excitations merely affirm your personal animus towards the Appraisal Institute. A dispassionate reasoned reader can easily see through these headline grabbing histrionics.

      One of the problems with a small select group of these individuals is that they don’t seem to understand that they represent both residential appraisers and commercial real estate appraisers. As a trade group they have never shared (at least during Grubbe’s reign as CEO through today) any insights about what drives their policies). Their leadership and those who are on the path to leadership have to work within a corporate cult. They need to comply, or they will never be on the inside. And people like Charles, who I am sure is a nice person and good appraiser (he also said so), get so far embedded into the corrosive culture that they begin to believe what they are saying. The rest of us have no idea what is behind their thinking, and membership has long enjoyed zero input. The problem with this type of management is that it teaches those within the inner circle to have a certain amount of disdain towards their dues-paying members – i.e. that membership is comprised of a bunch morons who don’t get it and who can be bypassed so the “inners” can keep taking all those first class flights with their spouses to far away boondoggles.

      I have a broader theory on the impetus for pushing so irrationally hard for evaluations that causes their leadership to misstate and mislead out of context, and it has nothing to do with residential appraising. It has everything to do with commercial appraising. After this bizarre law in California and the repeated efforts to bypass appraiser boards in many other states like Florida, Montana, Virginia, North Carolina, Texas, North Dakota, Wisconsin and I’m sure many others, this is about generating income for leadership’s appraisal practices. For example in financial reporting, commercial appraisers are losing out to accountants and others in reporting for various reasons for large corporations. I assume that USPAP stops them from doing what they see as lucrative reports. With leadership in a bubble, they have no idea how the masses feel and clearly don’t care. They want that business for themselves.

      The logic Charles (in this post), Scott Dibiasio, Bill Garber and others bring to the table has never been agreed to by the masses. Why? Because they really aren’t telling us why. In a one on one conversation, none of these characters have ever been able to convey credible rationale for their efforts, because they aren’t defensible but they scratch their heads and wonder why most appraisers outside their bubble are so damn pissed.

      But I digress.

      Here are some key points of this SB-70 tragedy that the Appraisal Institute heaped on hard-working appraisers:

      AI Leadership in CA hides what they are doing: Charles does a lot of fogging in his responses. Remember that presidents of the California chapters send people to Sacramento to lobby for SB-70 without informing their own membership on what they are lobbying for, so I’ve been told by insiders. Why? That reflects a culture that views membership opinions with disdain. In his response you can see he comes from the perspective of “Well I’m from the Appraisal Institute, that’s why” which is not a reason. The greatest illustration of this, which Charles couldn’t step back and see when he says:

      Members of the Appraisal Institute CA GRC sent out invitations to every other appraisal organization in California to meet with us in the fall of 2017 in Irvine at a very lovely hotel. We even offered to pay for lunch. The aim was to solicit feedback from other stakeholders. We called and emailed weeks in advance and not a single person showed up.

      The reason no one showed up, aside from too much salt in the beef stew special, was that the Appraisal Institute is no longer a leader in our industry. They have built a reputation of arrogance in their behavior. I was at TAFAC when we voted to throw them out after wasting everyone’s time with a constant parade of temper tantrums and in the end, they would not agree to the goal of the organization.

      What is a level playing field?

      As you well know, there are thousands of unlicensed valuation professionals performing valuation-related work today . . . to a different standard, or perhaps to no standard whatsoever. State licensed appraisers in California are unable to compete on a level playing field given, among other things, the requirement to produce restricted-use reports for one intended user only. No one could possibly argue that the public in California is better protected by ceding this work to unlicensed practitioners in New York or India.

      This is an absolute abomination of logic and I am aghast at how dumb this is. Why do you want a level playing field? The public trust is served by a licensing mechanism. Just give up your license and do the work you so badly want at all costs and not destroy the public trust for what an appraiser actually is.

      As a licensed practicing appraiser, you are likely better at valuation than a TV repairman doing an evaluation. But when you demand to remove your license restraints to do this work, OF COURSE, you will do a better job but it destroys the impression of your worth when you are doing a real valuation. Ironically, the value of an appraiser is already damaged by this because Charles and his colleagues can’t do the branding math.

      Here is an example in reverse. In the North Dakota request for a statewide waiver of appraisers because they are too hard to find in rural areas. But so are doctors! How about waiving medical licenses for medical practitioners to serve the public!

      There is no enforcement when you do evaluations. So dumbing down appraiser licensing does NOT protect the public trust.

      That’s all I have time for today, but my goodness, there is a lot more to talk about with SB-70 in next week’s Housing Notes. Lots.

      Jonathan Miller
      REIC Forum Moderator

    • #8780 Reply


      October 12, 2018

      CoreLogic’s A La Mode is Pulling A Facebook Privacy Play

      One of the tactics of Facebook has long been to “cross the line and apologize” rather than “ask permission.” Now that “A la mode has been acquired, by CoreLogic” the company with a 50% market share of the industry seems to be employing this tactic.

      We have been A La Mode users for a decade. Heck, I even appeared on their homepage and in their marketing materials to attest to our firm’s belief in the product. But that was before Dave Biggers sold the company and our belief in the product was replaced with suspicion.

      Rightly so. In a routine update to our software, we saw that A La Mode inserted a checkbox in our preferences without advanced notice – the software allows you to see other appraisers’ data attached to a specific comp record. You populate the address and all the information is inserted using other appraiser’s data. And guess what, the other appraisers can see yours!

      And it gets better. You can subscribe for a fee and get all your competitors data (assuming they subscribe) and you sign away all your rights to it.

      This seems to acknowledge that we own our information because we have to sign away our rights, something appraisers have believed since forever but lenders and AMCs haven’t been on board and simply take it and use it (think FNC).

      Industry feedback

      Here is the best of the random appraiser feedback I read on this new development (made anonymous).

      NO, NOT SMART AT ALL! Appraisers cannot make a decision on behalf of ALL clients they’ve done work for. They are asking for big, really big problems if a client clearly didn’t want the analysis or any portion of the analysis given to anyone. This is another attempt from Corelogic to obtain data they have no rights to. Although, in multiple appraiser shops many of the owners and or managers have already accepted this agreement on behalf of all the appraisers utilizing the software which now puts the associates performing the appraisal(s) in jeopardy. No matter how big a shop you work with or for, you (the individual appraiser) are legally responsible for what you produce and safeguard. Corelogic cannot take the data you analyzed and produced a product for your client and create a derivative product to pass around to other appraisers or potential third parties.

      Here is one other issue with this “Smart Exchange” product. At a minimum (without consideration of Corelogics roll in the process) this is what happens. “Joe appraiser is doing an appraisal and Smart Exchange indicates that a “Peer” appraiser has utilized a comparable or even may have appraised a comparable which Joe appraiser wishes to use in his report. “Peer” appraiser rates this property at a C-3, but Joe appraiser thinks its thinks it’s a solid C-4. But because the fear of UCDP compliance issues and fear of having to answer a rebuttal request, Joe changes his rating to match that of the “Peer” appraiser. This in no way passes the USPAP smell test for confidentiality or impartiality. Plus Joe appraiser utilized the “Peer” appraisers photo which could have been the wrong property anyway.

      How stupid do you have to be anyway. You pay through the nose for software, subscriptions, appraisal portal fees, insurance, gas, paper, computers, phones and whatever else you need to provide a great product, and in the end you would give it all away so that some big data grabbing company (which you bought the appraisal software from) can sell as “Confirmed” data to eventually put you out of business or at a minimum reduce the appraisal assignment pool to you and many up and coming appraiser. Why would you want to take that chance, makes no sense to me. Maybe not this year or even five years down the road. But eventually appraisers and the public will suffer greatly when all loans will be standardized to one valuation product. Okay, a few of you are going to argue that the physical appraisal assignment will never go away completely. Your right, custom homes or unique construction we will always have arround. But take a look in your market area and tell me how many new Tract home subdivisions (this is even those custom home tracts) are popping up all over. Simply put; Corelogic DID NOT WORK for that data, they are not providing it to you as a compliment to their software or they would have offered to sell it to you. They are TAKING IT from you…..They have no legal rights to it, so don’t give it away.

      Appraisers need to THINK (hate to say most are not) about this. If the Lender/Clients data along with the product we produced was not to be closely guarded. Then there would be no laws or regulations about how we handle this information and Corelogic wouldn’t be asking in such a extremely exclusive statement which they want you to agree to on behalf of your clients. Others may say, Yeah but what about those other third parties which we subscribe to that give us information about properties which were appraised by others within that subscription service. Well that pretty simple also. The information provided by those other third party subscriptions are not providing information that can’t be obtained from public records. It all about your data you analyzed to produce a product. Primarily at this time, your quality and condition ratings or any ratings and analysis which may show up and can’t be obtained from public records.

      Not so sure what’s so hard to understand about our responsibility.

      See below and pay particular attention to “Assignment Results”. Assignment results include how you evaluated and produced your comparable data to come up with the appraised value.

      USPAP Confidentiality excerpt:

      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: (1) confidential information; or (2) assignment results to anyone other than:
      • the client;
      • parties specifically authorized by the client;
      • state appraiser regulatory agencies;
      • third parties as may be authorized by due process of law; or
      • a duly authorized professional peer review committee except when such disclosure to a committee would
      violate applicable law or regulation.

      An appraiser must take reasonable steps to safeguard access to confidential information and assignment results
      by unauthorized individuals, whether such information or results are in physical or electronic form.

      An appraiser must ensure that employees, co-workers, sub-contractors, or others who may have access to
      confidential information or assignment results, are aware of the prohibitions on disclosure of such information
      or results.

      A member of a duly authorized professional peer review committee must not disclose confidential information
      presented to the committee.

      Comment: When all confidential elements of confidential information and assignment results are removed
      through redaction or the process of aggregation, client authorization is not required for the disclosure of the
      remaining information, as modified


      Coester Chronicles Continued: Skap Counters Big Time (David v. Goliath Edition)

      Mandatory reading for appraisers.

      More Skap v. Coester

      Appraiserfest is almost here!

      Signup now!

      Jonathan Miller
      REIC Forum Moderator

    • #8779 Reply


      October 5, 2018

      Appraiserfest 2018 is almost here!

      November 1, 2, 3 in San Antonio.

      Sign-up here with the last coupon offered for the event.

      When you’re apparently the “Go To” appraiser for the wrong reasons

      I’m not being political here by using this massive New York Times investigative piece on POTUS tax history, but there were some pretty specific points made towards a commercial appraiser in NYC that I wanted to bring up.

      The references to this person reminded me of the housing bubble era when certain firms who mastered the art of working with mortgage brokers, were known as ‘deal enablers.’ All of the appraisers of that era that I knew either saw their companies collapse or lost their credentials.

      From the NYT investigative piece…

      A crucial step was finding a property appraiser attuned to their needs. As anyone who has ever bought or sold a home knows, appraisers can arrive at sharply different valuations depending on their methods and assumptions. And like stock analysts, property appraisers have been known to massage those methods and assumptions in ways that coincide with their clients’ interests.

      The Trumps used Robert Von Ancken, a favorite of New York City’s big real estate families. Over a 45-year career, Mr. Von Ancken has appraised many of the city’s landmarks, including Rockefeller Center, the World Trade Center, the Chrysler Building and the Empire State Building. Donald Trump recruited him after Fred Trump Jr. died and the family needed friendly appraisals to help shield the estate from taxes.

      Mr. Von Ancken appraised the 25 apartment complexes and other properties in the Trumps’ GRATs and concluded that their total value was $93.9 million, tax records show.

      To assess the accuracy of those valuations, The Times examined the prices paid for comparable apartment buildings that sold within a year of Mr. Von Ancken’s appraisals. A pattern quickly emerged. Again and again, buildings in the same neighborhood as Trump buildings sold for two to four times as much per square foot as Mr. Von Ancken’s appraisals, even when the buildings were decades older, had fewer amenities and smaller apartments, and were deemed less valuable by city property tax appraisers.

      The Appraisal Institute Succeeded Pushing SB-70 Into CA Law Without Informing Their Own Membership

      Their long-term goal for all their anonymous lobbying to dismantle all appraisal licensing is to revert to a previous time before FIRREA when membership in trade groups mattered a lot more. Unfortunately, they are heavily damaging the livelihoods of appraisers in the process. Be sure to shake hands with Scott DiBiasio, Bill Garber, Jim Amorin and the rest of AI executive leadership at your next AI meeting.

      The background on this insanely damaging law to appraisers can be found in the August 3, 2018 issue of Appraiserville.

      I’ve been keeping tabs on SB70 and saw that it was signed into to law this week.

      Here is what I wrote back in August about SB70:

      Here’s the biggie:

      (C) States that there may be assumptions that the appraiser has not verified that may significantly impact the appraised value of the subject of the report.
      The whole purpose of USPAP is to provide credibility in reporting to protect the public trust. With the wording of this bill, any appraiser could take any point of view and not back it up with verifiable data. For example, an appraiser could take a seller’s word on potential uses of their property and the appraiser can simply restate them and not provide any support to verify the claims.


      This bill allows the creation of a worthless document that demeans the value of an actual diligent appraisal.

      This will open up fraud and overvaluation on a scale not yet seen before. It renders our profession equal to a fortune teller (no offense to fortune tellers). This bill shows a blatant disregard for the public trust from the real estate’s largest trade group.

      But there is more:

      This bill, if it becomes law on January 1, 2019, is only good until January 1, 2020!!! It is only valid for one year which clearly shows how desperately AI National needs to claim a win after years of losses in fighting for evaluations against their own membership’s wishes. They are throwing ethics aside! All bets are off now! Just get a win!

      This bill destroys the validity of what an appraisal actually is because good appraisers can now perform like bad appraisers without concern. There is no accountability and no verification required if this bill is passed.

      Plus, this bill changes the use of the report from the single client concept to a universal use as long as all the names are listed. How does this square up with their own code of ethics?

      There is one glaring oversight by the AI lackeys in Sacramento that signed-off on this bill in secret that shows their own greediness to advance up the AI National hierarchy: There are about 10,000 credentialed appraisers in California. I don’t know how many AI designated members are in California, but I’m assuming it is substantially less than that. If this bill becomes law, can anyone imagine the explosion of fraud by people desperate to take shortcuts, ESPECIALLY AS THE MARKET STARTS TO COOL? Remember, AI leadership in California signed off on a bill that makes verification unnecessary. I’m sure a majority of AI membership in California are decent and competent appraisers. But now they have to compete with the bad eggs or those that will quickly become bad because they can say and do anything without verification. Not only AI members get to do these simple reports, but anyone with a license and a pulse does as well.

      And you can bet that AI National will press for renewal or permanence in 2019 without telling their CA membership. I was told from a very credible source that the strategy all along was to not tell the membership what was going on and sneak in the bill in the second year of a 2-year review process. Congrats AI National, you got a win and hope you can sleep at night. Oh, and shame on all of your leadership.

      Texas Appraiser Licensing & Certification Board Withdraws Proposed Rule To Allow Appraisers To Drop Licensing Requirements to Perform Evaluations

      AI National’s Scott DiBiasio has been pushing the idea of allowing appraisers to drop their credential requirements to perform evaluations on commercial assignments in a number of states. We have witnessed these deceptive efforts in Florida. The Texas Board has been pressured as well but they voted against it:

      MOVED, that staff is authorized, on behalf of this Board, to withdraw new rule 22 TAC
      §155.3, Work Relating to Commercial Real Estate Transactions, as published in the Texas

      Here is some anonymous feedback from an appraiser in Texas:

      In an interesting related story just received. An informed source indicated that independent appraisers would never get the mark to market work since it will all go to the nationals with deep pockets since the users are looking for the assurance that there will be somebody to sue if the deal goes south.

      Coincidentally, xxx saw an RFP the other day that specified – national firms only.

      This story likely will/may relate to evaluations too. All the business will go to the nationals who set up divisions to produce these types of reports while independents sit on the sidelines waiting for the call with trepidation and reluctance since we all know the job needs to be done thoroughly. But, we’ll never get the call anyway since users will hire nationals they can sue.

      Jonathan Miller
      REIC Forum Moderator

    • #8778 Reply


      September 28, 2018

      38% Increase Into The Profession in Three Years

      The following stats from The Appraisal Foundation shows a rising number of people entering the appraisal profession. The projected number for 2018 represents a 38% increase over 2015.

      The propaganda being fed to regulators and the users of appraisal services is misrepresenting the state of the profession. To my loyal Appraiserville readers, please let me know when you hear a speaker convey the declining trend story in a public forum so we can inform them.

      Indirect Appraiser Pressure of The Daily Kind

      An appraiser shared this email from a mortgage underwriter:

      “I saw you called a few days ago and I apologize as I have been very busy. If you can just email back notes as to why your not changing value or you can input notes into the appraisal. This can give the borrower a better understanding why the appraisal is low. If your updating value; that is find too.”

      My response to the appraiser:

      “Good grief. The Appraisal already explains why the value is the value in the report to your client – the bank. The lender is the one to explain to the borrower if they choose to. It’s not on you. Consider charging a consulting fee to make that explanation.

      This is what I call the-clueless-19-year-old-chewing-gum-on-the-phone-syndrome.”

      The appraiser who sent this to me saw the deeper meaning referring to all the typos and lack of response:

      “We are a society and culture in adult age with no more education and teaching than a text messaging two year old.

      Now dear Appraiserville readers…imagine being delivered this crap multiple times a day. How can appraisers not be jaded and serve up a lot of righteous indignation when having these conversations? Who stands up for appraisers who go through this?

      Fannie Mae plans appraisal waivers for high-needs rural loans

      Here’s the logic. To avoid requiring the borrower from making costly repairs, but still reduce the risk of loan performance, Fannie plans to waive the appraisal but order a home inspection.

      Translation: Defining the cost of repairs is more important than understanding the value of the loan collateral.

      Good grief. This makes no risk management sense unless the taxpayer was willing to pay for this in the future if something goes wrong. Fannie is so worried about a few extra days (or weeks) with a rural appraisal in the loan process in the context of a 30-year loan period that it overpowers the need to assure the value is supported.

      Fannie Mae plans appraisal waivers for high-needs rural loans [NMN]

      Appraiserfest in San Antonio is a Happening AND its happening on November 1,2,3!

      Can’t wait!!!

      Jonathan Miller
      REIC Forum Moderator

    • #8777 Reply


      September 21, 2018

      Reflecting On The Financial Crisis a Decade Later

      Over the past several weeks, there has been a slew of thought-provoking pieces on the financial crisis of ten years ago. There are so many varying views on what happened and what caused it. It was such a systemic event that ten years later, there are strong opinions on the cause and the lessons learned and not learned. I’ve always looked at it from a valuation/mortgage/credit standpoint since that has been my business orientation. I saw the events roll out from my perspective, but I only saw a sliver of what the crisis represented.

      Mortgage brokers I knew that thrived back then, are either gone or generic loan reps at large institutions, never to be heard from again. Appraisers I knew who succeeded on the massive volume thrown to them by star mortgage brokers collapsed and lost their licenses or their businesses. Those appraisers never lost their self-respect because they didn’t have any, to begin with.

      I was a confusing and stressful time as I wondered what math class I missed in high school and what ethics class I missed in college as our business suffered and my competitors made deals with mortgage brokers from the back of limos. In 2005, I was sure I would be out of business by 2008. Fortunately, it worked out in the long run but the period from 2005 to 2008 felt like an eternity.

      Late in the crisis, I provided numerous consultations to the office of NYC Attorney (then Andrew Cuomo) to understand the problems appraisers faced from enormous economic pressure by mortgage brokers to hit the “number” but being disappointed when Cuomo opened the AMC pandora’s box with HVCC. A deputy told me they pushed the envelope as far as their authority reached, but it enabled AMCs, the institutional middleman that has mostly served to destroy quality valuation practices in the U.S. Cuomo’s office wanted names of the perpetrators and I basically said it was systemic and there were no names to give because it would be almost all the names in the mortgage broker industry. After all, why did a mortgage broker get to pick the appraiser they used when the mortgage broker only got paid if the deal closed. At one point I was literally on the phone with Cuomo’s office and at the same time got an email from a mortgage broker in Florida who was looking for an appraisal to be completed in New York that needed to be at least $1,200,000 so the borrower could draw down money to buy a boat. At that moment I could have forwarded that email to the AG, but because nearly all mortgage brokers spoke like that, it confirmed to me that it was systemic and not a few rotten eggs. If only that mortgage broker knew how close she came to losing her license.

      Although the Lehman moment didn’t cause the financial crisis, it was a symbol of the beginning of true consumer awareness of the problem. Sales contracts collapsed 75% in my market from September to December. However, I saw the rumblings begin in the prior summer when the two Bear Stearns mortgage hedge funds and American Home Mortgage collapsed. I experienced this first hand when the head of those funds join a company that was going to acquire our company. I disconnected from the relationship shortly after that.

      My wife and sister, who are my business partners, sat down and reinvented our business, jettisoning appraisal management companies and most retail mortgage work, inverting our practice away from mortgage rate dependent work. In many ways, the experience was a gift, because our firm became more profitable and we focused on good clients. We avoided clients represented by a 19-year-old chewing gum demanding to know where our report was ordered 24 hours ago.

      RAC Member Ernie Durbin Goes Mano a Mano With Phil Crawford

      My good friends Ernie and Phil show us a Cincy-style discussion on appraiser issues of the day at the 2018 RAC conference last week in Plano Texas.

      Calling Zestimates into Question and Identifying Their User Addicts

      The New York Times did a great piece on Zestimates and the addicts that check them daily. I chime in about your horoscope – BTW I’m a Libra so I’m clearly “well balanced.” Then Ryan Lundquist shows how much the Zestimate weights the current average sales price with an actual example. It’s amazing.

      John Brenan of The Appraisal Foundation Pens A Thoughtful Piece on “Why Appraisers Matter”

      Read the piece in Realtor Magazine.

      the number one caveat for consumers is that these estimates are not a substitute for formal appraisals

      Appraisal Institute is Working Hard to Fog The Rural Appraisal Narrative

      The following CSBS article essentially written by the Appraisal Institute which is being distributed by lenders – continues to misrepresent the idea that the number of appraisers is falling and no new appraisers are coming into the profession.

      Notice how CSBS tracks the number of appraisers from the peak of the housing bubble? If this organization’s or the Appraisal Institute’s intentions were honest, they would show the trend before the housing bubble as well. In this piece, they show that credentialed appraisers have fallen 21% in 10 years which is far less than Appraisal Institute membership. There are actually more appraisers now per mortgage origination than back then. Why? Because despite record low rates, mortgage origination volume has fallen since 2008.

      That my friends is the missing context here. In other words, the CSBS/AI research piece is at best propaganda and at worst, a lie.

      Here is the Appraisal Institute’s (I mean CSBS’s) summary of observations (with my comments appended):

      – Some rural and underserved areas do not have enough
      appraisers. That’s been the case for one hundred years and only became problematic when AMCs became dominant and typically pay less than half the market rate.
      – The National Registry of Real Estate Appraisers does not
      accurately reflect local shortages of appraisers. And it doesn’t show surpluses, nor does it reflect non-free market business practices of the AMC industry that AI National so dearly loves.
      – The Title XI waiver process is unclear, lengthy, and
      underutilized. This is a bizarrely desperate and a made up reason that sounds impressive but says nothing.
      – Congress acknowledged with the passage of the “Economic
      Growth, Regulatory Relief, and Consumer Protection Act”
      that obtaining appraisals for certain rural transactions are
      an issue and that an avenue for relief is needed.This a wildly misleading statement of what this act actually is. According to ABA: to qualify lenders must show that three
      appraisers were not available within 5 days beyond a reasonable time frame (determined by the
      bank) for an appraisal.

      Appraiser licensing and credentialing processes create
      barriers to entry.Name one! We’d have a lot more doctors if we didn’t require an education and experience.

      Can these reasons be any more self-serving and dumb?

      Appraisers Taking Exams Jumps 14% YTD 2017 to 2018

      This is fresh from the Appraisal Foundation:

      Over the same period last year, there has been an increase of 9% people taking the Licensed Residential exam; an increase of 41% taking the Certified Residential exam; and a decrease of 10% people taking the Certified General exam. The overall total equals a 14% increase in the number of people taking an exam in 2018 vs. 2017.

      Here is a chart that tracks the age range of test takers from 2013 to 2017. The 26-35 subset (purple) is the highest for each year showing that youth is indeed entering the profession.

      More Examples of FIRREA-Breaking Laws That Require an MAI-Designation

      A few weeks ago I posted several legacy laws in California that were pre-FIRREA and are still on the books. I share these because these laws and others like it allow AI National to be run like a dictatorship without accountability to its membership. If a member criticizes the organization, then that member can be suspended or kicked out, having a severe impact on their livelihood. Therefore I am on a mission to share these laws. Here are three more to investigate:

      1. City of Santa Fe, New Mexico

      Purchase of City-Owned Property

      Requests to purchase parcels or portions of City-owned property are first reviewed by all relevant City departments to determine whether the property is planned for future uses by the City. If the City verifies that the property can be sold, the request is forwarded to the City Council for conceptual approval of the sale. If the sale is approved in concept, the applicant must provide a current survey of the property along with an appraisal prepared by an MAI-certified appraiser. Upon receipt of these items, the purchase request is forwarded to the City Council for final approval. Purchases are often subject to reservations for existing utilities or easements.

      2. City of Salt Lake City, Utah

      Offsets to Impact Fees (18.98.070)

      E. The value of land dedicated or donated shall be based on the appraised land value of the parent parcel on the date of transfer of ownership to the city, as determined by an MAI certified appraiser who was selected from a list of city approved appraisers provided by the director and paid for by the applicant, who used generally accepted appraisal techniques.

      3. City of Indianapolis, Indiana (h) (Note: Updated May 9, 2016, but contains very outdated references for designations!)

      Consolidated Zoning/Subdivision Ordinance

      Market Value: For purposes of flood control regulation, the market value of the structure itself, not including the associated land, landscaping or detached accessory structures. The market value must be determined by a method approved by FEMA and the Bureau of License and Permit Services. If an appraisal is used, the appraiser must have at least one of the following designations: 1. Member of the American Institute of Real Estate Appraisers (MAI); 2. Residential member of the American Institute of Real Estate Appraisers (RM); 3. Senior real estate analyst of the Society of Real Estate Appraisers (SREA); 4. Senior residential appraiser of the Society of Real Estate Appraisers (SREA); 5. Senior real property appraiser of the Society of Real Estate Appraisers (SRPA); 6. Senior member of the American Society of Appraisers (ASA); 7. Accredited rural appraiser of the American Society of Farm Managers and Rural Appraisers (ARA); or 8. Accredited appraiser of the Manufactured Housing Appraiser Society.

      More to come.

      Jonathan Miller
      REIC Forum Moderator

    • #8048 Reply


      September 7, 2018

      As the industry changes, it is more important than ever for appraisers to have a longer term plan…from my friend Nathan Pyle.

      (For earlier appraisal industry commentary, visit my old clunky REIC site.)

      Prophet, Not Profit

      Ryan Lundquist at the must-read Sacramento Appraisal Blog served up this ditty. Be sure to read the post comments.

      To conclude, there are no actual prophets. Only shills that claim to be.

      A New MAI Acronym Making the Rounds For Good Reason

      When I was taking an appraisal class in NYC by the Appraisal Institute back in the day, the 2 MAIs teaching the class sort of bragged that the “MAI” designation stood for:

      “More Annual Income” but someone in the audience quipped: “Made as Instructed”

      Those two definitions still remain in the appraiser-verse.

      With the pre-determined anointment of 2x president Jim Amorin after 12 months of a bogus replacement search by the senior executive team to get their guy in to fill the vacated CEO position of the MAI (gasp), a new definition has appeared:

      “More Amorin Influence”

      Sadly, this move probably symbolizes the point of no return for the Appraisal Institute and there is at least anecdotal evidence that many members are looking to renew one more year and then think about leaving the organization.

      Confusion about acronyms

      As quoted by an MAI in Florida

      MAI is not an acronym (i.e. it is not Member of Appraisal Institute). The MAI designation represents the designee is affiliated with the Appraisal Institute. The Appraisal Institute is a global organization for real estate appraisers.

      I suspect most of the membership is unaware of this differentiation.

      During my career, I have been told on several occasions that after the merger between American Institute of Real Estate Appraisers (AIREA) and the Society of Real Estate Appraisers (Society) in 1991, the newly formed Appraisal Institute somehow lost the ability to define “MAI” as “Member, Appraisal Institute.” I haven’t been able to cite this but I do find it strange that most older members seem to think that’s what it stands for when the Appraisal Institute web site makes no mention of it.

      UPDATE Friday 9/7/18

      This AI National position was just shared with me from a regular reader of Appraiserville:

      The acronyms no longer worked after the merger between the American Institute and the Society back in 1991. Previously MAI meant “Member Appraisal Institute” and the SRA meant “Senior Residential Appraiser.” The board at that time decided that in the new organization those words were no longer relevant. However, they did not want to change the letters as the letters are widely recognized around the world.

      The designations therefore are collective service marks, similar to IBM. (IBM faced a similar problem when the words behind the letters lost relevancy but the company did not want to give up the widely recognized IBM name.)

      It doesn’t correlate with what I’ve been told, but at least AI National seems to have an official position. They might want to weave this into their website somewhere so their own membership knows this.

      Here Is Why The MAI Designation Keeps Members From Criticizing The Executive Leadership

      In a direct violation of FIRREA, there are local laws that require the MAI designation. With the advent of appraiser licensing, private organizations do not outweigh a licensed appraiser if all qualifications are equal. Membership has been reluctant to criticize the Appraisal Institute’s behavior because they can suspend or cancel your designation. If that economic leverage over membership did not exist, the organization would collapse. And that is a shame when it could be a leader in these uncertain valuation-related times.

      Here are two examples in California:

      – The City and County of San Francisco []

      “Qualified Appraiser” shall mean a person who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective, holds a certified general license issued by the California Bureau of Real Estate Appraisers and the designation of MAI from the Appraisal Institute, and has five or more years of recent experience appraising real estate of the same type and in the same city, county, or wider area, as applicable, as the subject Real Property.

      – Port of Los Angeles (RFP for Appraisals dated 12/29/16) []

      Proposed Appraiser must have a current MAI or SRPA designation from the Appraisal Institute or ASA designation from the American Society of Appraisers.

      Biting The Hand That Fed You

      I think many appraisers aspire to sell their firm to a larger company if they don’t have a family succession plan. But beware. The appraiser will find themselves forced to adjust the new rules and culture and some may do things they shouldn’t. The following litigation reveals the inside of a deal what looks to have some mind-blowing numbers in the valuation industry and some questionable behavior.

      A well-known commercial appraiser in NYC metro, Joel Leitner, that ran a “high volume” shop, was acquired by BBG, a national firm in 2014.

      This is the 2018 lawsuit.

      The high dollars and actions are compelling. I can only assume that this firm needed NYC coverage very badly to legitimize their growth strategy, and based on the lawsuit result, it didn’t seem like enough for the appraiser after the fact.

      If you want the short story, the judge found in favor of BBG so Leitner has to pay them $187,577.50 in claims and honor the 2 year non-compete from his April 2018 termination date. Wow.

      Supreme Court of the State of New York, New York County

      Jonathan Miller
      REIC Forum Moderator

    • #8008 Reply


      August 24, 2018

      Appraisal Institute Spent One Year Searching For 2X President Jim Amorin To Name Him CEO

      As I predicted in these Housing Notes a while back, Jim Amorin is the new AI National CEO. It was inevitable that Jim Amorin would be named the replacement for former CEO Grubbe. Ironically Grubbe’s resignation was accepted by Amorin exactly one year ago today. Grubbe served a decade and I’m told created a toxic institutional culture. There was great hope by the membership that fresh faces in AI National leadership could right the ship from its declining membership, unending dishonest efforts to fight for issues that hurt the profession and their general irrelevance to consumers of appraisal services and regulators. The network of state coalitions are now in the regulatory conversation in D.C. and AI National is becoming a “stone in their shoe.”

      It looks like the all of the membership’s money spent on a third-party firm to filter the applicants may have been a sham. The CEO position pays a whopping $400,000 salary so a 25% executive recruiter fee could be $100,000 cost. There were many applicants for the position and one of them had to be a hell of a lot more qualified than a status quo choice of the handful of senior execs that are the problem.

      I got a lot of feedback from distraught MAIs when the news broke, who are resigning in the near future. Here some of my favorite quotes.

      Fewer institutions are requiring the MAI of their staff, and more of them hewing to the FIRREA law on state certification as the qualification. It’s a natural progression that dues-soaked Appraisal Institute members, including prominent MAIs in the major markets, would look at the cost of the designation versus the return on that investment, and decide to leave it behind. This is especially true in light of the fact that members are realizing that their dues are going to support National and only National (2016’s chapter-money-grab), and that National’s interests are not those of the rank and file. How many MAIs and SRAs enjoy seeing their dues going to pay for very fat salaries of non-compete positions, and for the luxurious international jet-set lifestyle of the management and executive committees? The MAI has less and less value…unless you are in that 0.00001% at the top, getting a pre-departure glass of champers in the forward cabin.

      It’s nothing short of breathtaking to watch a once-proud organization devolve into a parody of itself. I wonder how much money and time they spent on what obviously was a foregone conclusion months ago.

      Looks like the “fix” was in…..and there is the only thing to say about this:
      Bad f##king decision! I just can’t believe this.

      Just as you predicted. Self-interests have taken over all aspects of the Appraisal Institute.

      Warm up the bugle. Taps will be needed soon at the AI funeral!

      I will pay dues again in 2019, but I very likely will not for 2020…It pains me that my dues dollars will support these self-interested buffoons that have hijacked the organization. Never thought I could see the day where I would think like that – but it is here!

      Here are some thoughts…

      After the Nashville AI conference, it was incredibly obvious that the decision had already been made and they were trying to slide it in without incident. A story shared to me by two colleagues on different occasions who were told by someone who attended the Nashville Convention: When it was announced that Jim Amorin was to receive a special award for acting as the CEO for the past year, an appraiser stood up in the audience and implored leadership not to install Amorin as the new CEO because it would be the “death knell” of the organization. The audience applauded in agreement.

      When the AI National sent the notice of the new CEO in their email blast, the story was buried in the second to last article.

      Membership is being managed by a few elites at the top. Their echo-chamber is too loud for them to hear us any more.

      Brian Coester, the controversial founder of a national AMC, has been served with criminal charges

      Because Coester is a controversial figure in the appraisal management company industry and has been a frustrating topic of conversation by the residential appraisers for a while, it is worth pointing out what is in public record right now.

      The District Court for Montgomery County served a summons to Brian Coester yesterday for “Interception of Communication.” This essentially means “email hacking” in statute CJ.10.402 under Maryland law. Translated: “Hacking the personal email account of appraiser Mark Skapinetz.”

      “Spirited” Banks Treat Appraisers Like Cattle Where Clerical Staff Determines Their Livelihood

      Warning: lots of “spirited” inside jokes abound.

      No offense to the cows I’ve met in my lifetime (none are on a first name basis with me). When an institution has “spirit” it is all about the lowest bid and fastest turn time…period. Clerical staff usually makes the choice when institutions (with spirit) treat their appraisers whose spirit has been crushed, like this.

      In looking at this particular request, here’s what I find — we uploaded the request around 11:30 yesterday. The “huddle” on Appraisal Shield pushes each request out to an appraiser about once an hour — I did a couple of extra pushes on this request because I had been delayed in getting out. As of this morning, this request had been pushed out to 14 appraisers — you were #12 in the rotation. We typically like to receive 3 – 5 bids before making a choice. When the assistant accepted a bid this morning at 9:19 a.m., we had received 9 bids and she chose the one that had the cost bid and delivery time that worked for this project.

      My understanding is that the huddle is based on random rotation and I can see on other projects where you were notified much sooner in the process.

      California Coalition Sends Critique of Sham Effort By AI National to Congressman

      Why on earth would AI National do this? We will never know. This is why it is a bad idea for coalitions to co-sign ANY letters with AI National going forward. Please stop. After being kicked out of TAFAC and resigning from The Appraisal Foundation, AI National is doubling down on building relationships with the state coalitions who are now making real progress at the state and federal level. Why should coalitions align with AI National after they continue to insert duplication and misrepresent the state of our industry to regulators and politicians?

      Remember this – Bill Garber’s common refrain continues to be “we are the most over-regulated profession” in every one of his presentations. Be advised that this is absolutely false and self-serving to AI National.

      As a result of Bill Garber’s efforts, the California Coalition sent a note to the congressman who at AI National’s request, created the “Discussion Draft titled ‘To Establish a National Appraiser Licensing System and Registry for licensing and registration of real estate appraisers and appraisal management companies, and for other purposes.” [download]

      Please read CCAP’s Letter to Congressman Stivers Discussion Draft. They point out how redundant this draft actually is and how it lumps Appraisers and AMC’s’ together, a clear reflection of AI National’s strong alliance with REVAA (the AMC trade group).

      (OKPAC) disassociates from the comment letter submitted by the Appraisal Institute

      While AI NAtional got a bunch of cosigners for a letter critical of the North Dakota appraisal waiver request, they also falsely claimed that the ASC posted private information from North Dakota on their website which is patently untrue. AI National still hasn’t apologized or corrected the letter for this criticism likely designed to malign ASC as part of the longstanding strategy to malign The Appraisal Foundation in order to take their place in some capacity.

      Here is how the OK Coalition responded to the misleading AI National claims about the North Dakota data:

      Mr. Garber et al,

      Within email below Mr. Jim Park clearly and unequivocally explains action in response (which entails federal rule of law) regarding North Dakota request for waiver. Therefore, based on the information provided, the Oklahoma Professional Appraisers Coalition (OKPAC) disassociates from the comment letter submitted by the Appraisal Institute with emphasis on the following paragraph:

      “We are also concerned the North Dakota request published on the ASC website includes personally identifiable information such as names, email addresses, fees, and turnaround times. Such information was deemed to be privileged by the ASC during the consideration of the TriStar Bank temporary waiver request earlier this year. In fact, full and complete information on the TriStar Bank temporary waiver request was only obtained through a Freedom of Information Act request at the state level, as a copy of the request letter received by the ASC was sent to the state appraiser regulatory agency, per ASC regulations. This inconsistent and disparate treatment of appraiser personal information is alarming and should be immediately addressed in a consistent manner by the ASC and within the ASC regulations.”

      In further clarification of disassociation here is the following action taken by ASC:

      “The Submitter made the request, including all addenda, public by providing the request to appraisers in North Dakota and others themselves. As an added precaution, prior to posting the submission on the ASC website, ASC staff reached out to the submitter and asked if any of the information in the submission was confidential and should be redacted prior to being made public. Their answer was no.� In comparing this submission to TriStar submission and eventual waiver request, they did ask for certain information to be redacted prior to publication on the ASC website, which we did.”

      OKPAC continues to support the denial for a temporary waiver of appraiser requirements in North Dakota.


      Thomas E Allen, SCRP, RAA

      Other coalitions are going to be responding to this in the near future including ours. Just when you think AI National is changing their attitude, they pull this.

      Jonathan Miller
      REIC Forum Moderator

    • #8007 Reply


      August 17, 2018

      AI National Pitches Their Own National Registry Without Telling Anyone

      I’ve been told by many parties that this is the work of AI National. It makes sense since it requests something that no one is interested in because it is wildly redundant and is more about making them relevant again. To hard-working AI membership: This is how your annual dues are being used.

      This is the discussion draft that has been making the rounds: ESTABLISHMENT OF NATIONAL APPRAISER LICENSING SYSTEM AND REGISTRY.

      About 95% of drafts like this are never enacted into law but seriously, why push redundancy when no stakeholders in the appraisal process are clamoring for this? Why push so hard? I believe it is part of the master plan to allow AI National to take the place of either the ASC or TAF to regain relevancy, have access to the registration fees and perhaps some sort of financial reason that explains this bizarre behavior.

      The Appraisal Foundation Provides Opinion to ASC on North Dakota request for an appraisal waiver

      As I mentioned before, there are many more credentialed appraisers. The letter lays out the logic very clearly.

      ASC North Dakota Waiver Response from TAF 8-15-2018

      AMCs Slow The Mortgage Process, Not The Appraisers Themselves

      Appraisers who work for AMCs understand how significantly AMCs slow the appraisal portion of the mortgage process down. AMCs may spend days trying to find someone who will work for a below market rate. Addendum requests can come 3-5 days after the report is delivered. It all adds up to a much slower turn time yet the appraiser is held to a tight standard of a few days for their entire process. That outside looking blaming the appraisers but that’s not the issue.

      VACAP is asking appraisers nationwide to share their empirical timelines on AMC work on this time-sensitive project. Please help them right now to make this project a success. Thanks!

      AI President lays out their 2018 Goals From Their Bubble

      From Valuation Review‘s recap, Murrett spoke from his insulated cocoon. Here are his 2 main points, translated:

      ONE Push residential appraisers to do $25 evaluations for reasons AI isn’t willing to share and then fog the situation by proclaiming it is necessary to follow regulatory rules and regulations:

      “The use of evaluations isn’t the end of the world as long as appraisers are doing the evaluations,” Murrett said. “This, of course, falls in line with the regulatory rules and other regulations. We’d like to see appraisers do evaluations and not be in fear of violating USPAP requirements.”

      TWO Continue to promote the false narrative that the appraisal population is falling when exam takers rose 20% last year and that the Bureau of Labor Statistics projects the appraiser population to grow 14% over the next decade:

      “Another area of concern is the shrinking number of appraisers, whether it is the actual certification count by the Appraisal Subcommittee or the actual number of bodies which is what AI counts,” Murrett added. “The trend of incoming appraisers is still going down. We’re still an aging profession, and in the next 10 years as appraisers retire or pass away, the number of new appraisers entering the profession won’t be any larger.”

      Jonathan Miller
      REIC Forum Moderator

    • #8006 Reply


      August 10, 2018

      Ran out of time but will focus on the Florida appraisal board meeting this week: look for the new battle cry” “Sh#t Can The Straw Man.”


      The epic story of how a good appraiser got blacklisted.


      LREAB c. FTC is getting more interest by other states:


      Next week!!!!

      California SB-70 Hearing Shows AI California Working Hard To The Destroy The Appraisal Profession

      Last week I wrote about the sham of the SB-70 2 year strategy by the leadership of the 6 AI California chapters to allow the entire industry to provide reports without verification of anything for 365 days (January 1, 2019 to December 31, 2019) just to be able to claim a win.

      When you listen to this testimony, you can see lies and silliness used to support SB-70. The need for this 365-day only bill (thankfully 2019 is not a leap year) is pure make-believe. Plus the claim that a restricted report can only be for one party is false since multiple clients can be placed on it.

      Not surprisingly, the AI California membership is largely unaware this is happening.

      Here are the links to two recent policy hearings concerning SB-70:

      Senate Business and Professions Committee hearing (from 3:40 and concludes at 50:00):

      Assembly Business and Professions Committee hearing on SB-70 (24:30 and concludes at 28:00):

      Watch the video.

      Two Week Notice: It Will Be A Year Since AI National CEO Grubbe Left In Middle Of The Night

      In two weeks it will be a full year since the AI National CEO position became vacant. The fact that the organization has its pants on fire with falling membership while vacating any apparent concerns about their residential members’ livelihoods. I was told that former 2x president Jim Amorin was given an award in the recent AI National conference in Nashville for filling in for the vacant CEO position. If he wasn’t paid for this additional responsibility, at least membership saved $400,000 in CEO salary. I’m going to go out on a limb and speculate that he will be the next CEO but the senior executive strategy is to wait a while until the vacancy is largely forgotten. In order to keep the band together going forward for all those trips abroad, I would think that this position will be filled by him or the small group of leaders that remain protected from scrutiny.

      Next on the list: Whatever happened to that AI Residential Focus Group formed a year ago?

      This is not the way to run a trade group.

      Jonathan Miller
      REIC Forum Moderator

    • #8005 Reply


      August 3, 2018

      There is a lot going on in Appraiserville this week and I’m going to squeeze in what I can and then continue the narrative into next week.

      AI California Chapters Are Trying To Get A “Win” And Prove They Don’t Care About “The Public Trust”

      I’ve long heard rumors about some clandestine legislative changes that AI National is pushing for in California (and other states like Florida, etc. through the efforts of Scott Dibiasio and others) and with a little digging, I stumbled on to something quite alarming.

      There are six AI chapters in California: Central California, Northern California, Southern California, San Diego and Sacramento Sierra who typically send two representives to Sacramento as some form of a committee to push agenda for their membership.

      Unfortunately, they have been fighting for SB-70 which guts the meaning of what appraisers actually do, all in the name of getting a “win.” The leadership of these 6 chapters are generally known for being loyal to AI National so it would be only a hop, skip and a jump that AI National and Scott Dibiasio would have been directly involved or at least aware of this action, although I can’t verify that.

      What is even more alarming is that I have been told that chapter membership is likely not aware of these efforts by rogue leadership. It is not unreasonable to assume that membership in all or most of the 6 chapters would overwhelmingly vote down this effort if they were even aware of it occurring.

      Here’s the background of SB-70 that is currently in play in the California legislature.

      The bill was introduced by Senator Bates on January 9, 2017, and was designed to limit the application of USPAP to appraisers in the state. The bill was defeated last year but in California, a bill can roll over to the next session and with modifications could still be passed.

      Right now the AI of California is working to get this bill passed no matter what it does to their membership’s livelihood. The SB-70 bill is brief but devastating. It looks like California leadership is very desperate to become royalty at AI National and fly first class with their wives around the world instead of watching out for their own membership’s interest. I hope this post becomes a discussion topic at each of these chapter’s next meetings because the news is alarming. Any feedback from membership in future meetings would be appreciated.

      The following is the SB-70 bill up for modification. Here’s a more formal pdf version without the edits broken out.

      The blue text denotes additions and the red text denotes deletions.

      Here are some of my thoughts pertaining to specific issues:

      Here’s the biggie:

      (C) States that there may be assumptions that the appraiser has not verified that may significantly impact the appraised value of the subject of the report.

      The whole purpose of USPAP is to provide credibility in reporting to protect the public trust. With the wording of this bill, any appraiser could take any point of view and not back it up with verifiable data. For example, an appraiser could take a seller’s word on potential uses of their property and the appraiser can simply restate them and not provide any support to verify the claims.


      This bill allows the creation of a worthless document that demeans the value of an actual diligent appraisal.

      This will open up fraud and overvaluation on a scale not yet seen before. It renders our profession equal to a fortune teller (no offense to fortune tellers). This bill shows a blatant disregard for the public trust from the real estate’s largest trade group.

      But there is more:

      This bill, if it becomes law on January 1, 2019, is only good until January 1, 2020!!! It is only valid for one year which clearly shows how desperately AI National needs to claim a win after years of losses in fighting for evaluations against their own membership’s wishes. They are throwing ethics aside! All bets are off now! Just get a win!

      This bill destroys the validity of what an appraisal actually is because good appraisers can now perform like bad appraisers without concern. There is no accountability and no verification required if this bill is passed.

      Plus, this bill changes the use of the report from the single client concept to a universal use as long as all the names are listed. How does this square up with their own code of ethics?

      There is one glaring oversight by the AI lackeys in Sacramento that signed-off on this bill in secret that shows their own greediness to advance up the AI National hierarchy: There are about 10,000 credentialed appraisers in California. I don’t know how many AI designated members are in California, but I’m assuming it is substantially less than that. If this bill becomes law, can anyone imagine the explosion of fraud by people desperate to take shortcuts, ESPECIALLY AS THE MARKET STARTS TO COOL? Remember, AI leadership in California signed off on a bill that makes verification unnecessary. I’m sure a majority of AI membership in California are decent and competent appraisers. But now they have to compete with the bad eggs or those that will quickly become bad because they can say and do anything without verification. Not only AI members get to do these simple reports, but anyone with a license and a pulse does as well.

      This is another example of how the Appraisal Institute’s senior leadership is working hard to undermine our profession without seemingly any comprehension that they are doing it – or that there is some other higher level plan that we are not privy to.

      AI California membership – the time to speak up against your leadership is NOW.

      The State of North Dakota Along With Their Banking Lobby, Applies For a Waiver

      This just came in so I will expand on this post in the future, but here is what we know.

      The governor has submitted a request to the Appraisal Subcommittee for an appraisal waiver but the letter seems more orientated towards raising the de minimus which just occurred. By the way, isn’t it apparent that the banking lobby is a little to cozy with the Governor’s office to actually cosign this letter? The letter also makes references to the lack of rural appraisers as a long-term problem.

      It is also clear from this letter that the FDIC hates appraisers (I have seen this for most of my career) as they facilitated the eventual writing of this request.

      The key problem with this request is that the number of credentialed appraisers in North Dakota is up sharply from 2007 to 2017. Here are the numbers:

      – Licensed residential is up 62%
      – Certified general is up 50%.
      – Certified residential is up 8200% (only because there was no such category in 2007).

      Regarding the long-term narrative about a shortage of rural appraisers and removing their requirement to follow USPAP. Ask yourself these questions: would the same apply to medical licenses for doctors and dentists; passing the bar exam for lawyers; licensing and training for food service inspectors when availability is thin due to the economics of rural life? Why aren’t rural appraisers allowed to participate in supply and demand like doctors and dentists, lawyers and food service inspectors? How about the fracking companies that pay $150,000 for 6 months for an employee because labor is scarce? The problem here is this waiver will promote bad behavior no matter how well the state did in the aftermath of the housing bubble.

      Interestingly the licensed category in 2007 was exempt from AQB requirements and that didn’t go well for North Dakota.

      Be sure to read their letter.

      Here is the North Dakota waiver letter.

      Jonathan Miller
      REIC Forum Moderator

    • #8004 Reply


      July 27, 2018

      Terminator: AI National Is Still Vigorously Fighting For Evaluations Against Residential Appraiser Interests For Reasons That Can’t Be Explained

      One of my favorite lines from the original Terminator movie from the Kyle Reese character that can apply to the unknown driver of AI National’s obsession to force evaluations on residential appraisers because they can count on the designation handcuffs that keep many from speaking out and continue to damage the public trust and continue to damage the livelihoods of its own members in slow motion without bothering to reach out and explain what is behind it (gasping for air sound). Remember that it took 10-years of screaming by AI membership to get AI National to disclose their dealings with FNC with an admission inserted into their email newsletter in the middle of other generic announcements.

      Listen, and understand. That terminator is out there. It can’t be bargained with. It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear. And it absolutely will not stop, ever, until you are dead.

      The Florida Real Estate Appraiser Board is having a meeting on August 6, 2018, concerning the FREAB’s February action (by a 7-1 vote) to require appraisers to comply with USPAP when performing appraisal and evaluation assignments.

      The Appraisal Foundation will be there as well as AI National’s well-traveled evaluation-advocate-in-chief Scott DiBiasio.

      Be sure to read three attached documents, especially the written comments on pages 13-15 of the “Discussion Documents”. A shout out to my friend and appraiser colleague Frank Gregoire from Florida who is working hard behind the scenes for all residential appraisers on this issue – you can see his emails and his professional discourse (unlike me).

      Documents from Public Record:

      Discussion Documents
      AI National Discussion
      Appraisal Institute Documents for 08062018 FREAB Rules Discussion 61J1-9…

      Remember that AI National, aside from doing battle with The Appraisal Foundation, is beginning to focus on befriending the state coalitions. I have a feeling that will be impossible and they will remain alone in the wilderness continuing to damage the public trust and our livelihoods.

      The only way to stop AI National from further damaging our livelihoods AND THE PUBLIC TRUST is to demand the removal of the old guard that has been able to personally insulate themselves from removal – the arrogance of current leadership while flying first class to valuation conferences around the world is an abomination. Residential appraisers will have to do a lot of $25 evaluations to pay for 1-4 of their first class round trip tickets to China, Singapore, Portugal, Canada, Germany, Serbia, Brazil, etc.

      Jonathan Miller
      REIC Forum Moderator

    • #8003 Reply


      July 13, 2018

      This week is full to the brim…

      When Untrained Inspectors of Hybrid Appraisals Rule The World

      I did a screenshot of a photo from a private appraisal group that blew my mind. Now imagine an unregulated, non-standardized, untrained inspector (home inspectors aren’t being used for hybrids) for a hybrid appraisal assignment (being paid $12 to rush through a home) actually catching this scam like a trained experienced appraiser did. LIA (Liability Insurance Administrators) has said that the appraiser is still responsible for house conditions even if they use a disclaimer. I heard this directly from LIA when they presented at TAF a few months ago. I wonder what other things would be missed by an unregulated, untrained inspector that is in a new industry that is non-standardized?

      Calling On All Tennessee Appraisers To Take a Tristar Bank Selfie

      My wife and I were visiting good friends in Nashville and I thought it would be a good idea to visit the bank that misrepresented to the public that there were not enough appraisers in the area so they applied for an exemption to the Appraisal Subcommittee (ASC) for a one-year waiver. After all, they are local residents and as bank employees, can apply values to collateral they lend on and there is no conflict of interest to be concerned about (especially since the taxpayer will pick up the tab when all goes wrong). Right?

      It would be cool to have appraisers submit their selfies in front of Tristar ATMs, branches, and offices to me and I’ll publish it here. I just submitted a request to the Tennesse Coalition through a friend but haven’t heard back yet.

      I’m not confident the Tristar Bank saga and potential new requests from banks are over. Afterall, their twitter account is still locked. Why would a bank hide behind a locked Twitter account?

      My Thoughts on the Tristar Bank “Appraiser Shortage” Misrepresentation and How Appraisers Fought Back

      I was involved in the groundswell of opposition to the Tristar’s claim of a shortage and shared conversations and emails with appraisers in that area. My state coalition was among the many that wrote ASC to dispute the claims by Tristar that are easily refuted with a quick Google search. This is what I understand happened through conversations with my peers during this situation in late 2017 through spring 2018.

      – Appraisers physically went to their headquarters and branches to apply.
      – Appraisers called them to apply.
      – Appraisers inundated their twitter account to call them out as misrepresenting a shortage and offered to apply (Tristar locked their Twitter account – when does a bank do that? – still locked)
      – I was told stories of appraisers walking into branches, but don’t know what happened.

      Statistically, it is easily proven that there are plenty of appraisers – as has been part of the public discourse. The onus should be on them, not appraisers, to be in sync with the public market to engage appraisers whether it is fee driven or a flawed bank culture. Why aren’t other Tennessee banks making such a claim now that Tristar’s claim was rejected? In appraiser parlance, other banks making the same claim would be a “comp” but that hasn’t happened. Why? Because they are misrepresenting the situation.

      Here is a list of some of the past Housing Notes/Appraiservilles that will get you up to speed on the disingenuous claims by Tristar Bank:

      – December 1, 2017 The Appraisal Waiver “Slippery Slope” Becomes A “Cliff”
      – December 8, 2017 – More on Tristar Bank in TN (you know, the one that shouldn’t be in the mortgage business)
      – December 15, 2017 – The Appraisal Industry Responds to the Tristar Bank Appraisal Waiver Letter
      – December 22, 2017 – Appraiser-Waiver-ville
      – February 16, 2018 – More on Tristar Bank’s Appraiser Shortage Lie to Waive Appraisals
      – March 16, 2018 – The Appraisal Foundation Position on Tristar Bank Waiver Request to ASC

      AppraiserFest 2018! November 1, 2 and 3! San Antonio!

      Signup now!

      Besides the appraiser-orientated content, the team is working hard to expand their list growing list of states that will provide CE credit for attendees.

      2018 RAC Fall Conference, September 13, 14, Plano Texas

      I am the outgoing president of RAC (Relocation Appraisers & Consultants), an organization of the best appraisers of complex residential properties in the country, bar none. Its been an especially satisfying two-year run. I’m especially excited about this year’s conference after last year’s success! CE credit and curated relevant content provided for today’s residential appraisers.

      To signup or learn more about the conference, go here:

      2018 RAC Conference: Time Keeps on Slipping into the Future

      An Example of why CoreLogic’s Monopolistic Behavior is Concerning

      Dave Towne shared this FTC link on CoreLogic’s acquisition of DataQuick and their efforts to stymie competitors like RealtyTrac from licensing data. Corelogic just settled with the FTC. CoreLogic has quietly become a near-monopoly in the data business. This includes providing software for many MLS systems as well as acquiring Countrywide, the poster child for all that is wrong with the AMC concept.

      Polluting The Data Pool

      Here is a wonky conversation by people much smarter than me. I cobbled it together and it is quite interesting – I gave no credit to the writers in the email I was cc’d in but I can if you wish:


      Extensive mortgage lending regulations would have to change to enable trainees to do more than what is currently allowed, and for lenders to accept that involvement.

      From what has been published so far, the forms change won’t happen until 2+ years from now.

      The below is the primary reason why the ‘hybrid’, ‘bifurcated’, ‘alternative’ type reports cannot be (presently) used for FIRST MORTGAGES when the GSE is buying the loan.

      They can be for secondary loan products………..which is why they came into existence and are being pushed to appraisers by multiple entities

      The problem is the lenders don’t want to pay appraisers appropriately for their license, E&O coverage, and professional service. Smart appraisers have not taken the bait.


      The issue, which we discovered through the forum, is that these reports are being one as “Restricted Use” on [proprietary] software of the AMCs, that,

      Coverts the appraisal to XML, which can then be directly uploaded to Fannie Mae, or dropped onto a 1004 for, because the per-printed form verbiage does not convert to XML from either a Fannie Form, or the AMC’s forms.

      That’s the “high tech” we are supposed to be embracing.

      So, the IAEG does not apply to not regulated bank lenders, such as Quicken Loans for example.

      Do a bi-f appraisal for a non-regulated lender, on an AMC proprietary software, and surprise, Fannie can buy that loan from them if the appraisal shows up on a 1004 through the magic of technology.

      If appraisers are going to do Restricted Use reports for lending, then they should be in PDF, because downloading and selling the data is not a “use” of a restricted report.

      Jonathan Miller
      REIC Forum Moderator

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