Policies & Culture of The Appraisal Institute and Appraisal Industry

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  • #86 Reply

    The purpose is to help the appraisal and related industries understand and fix the opaque culture embedded at AI National. The goal is to drive the organization to re-align with the needs of both their residential and commercial members, hopefully saving it from permanent irrelevance (functional obsolescence).

    For more than a decade I have watched AI National become mired in internal politics and self-dealing with virtually no meaningful communication to its membership. After their unprofessional exit from the Appraisal Foundation several years ago, I had enough and moved on to another organization that looked out for its membership. At some point, AI National forgot they work for their members and not the other way around. They became reliant on their membership remaining silent.

    On December 6, 2016, I wrote a post on my Matrix blog called: Sadly, The Appraisal Institute is now working against its local chapters. Using public communication from AI National, the post sparked chapter and membership outrage towards them across North America.

    On December 14, 2016, I followed up with Incredibly, The Appraisal Institute is taking chapter “excess cash” and charging them for the privilege.

    I received documents on AI National’s recent chapter “taking” policy and will be sharing them in subsequent posts. I hope others will readily post documents or share them with me to post. This forum is a central repository, so everyone impacted by AI National’s actions (AI members and non-members) can go to the same location for insights.


    On December 28, 2016, I added the following post to this discussion after the AI National phone call with Unbelievably, The Appraisal Institute Intimidates A Chapter

    Because of fear of reprisal by AI National as described in the December 28th post above, we have removed all registration requirements for this site. You can choose to register or remain completely anonymous. Either way, you can see and do everything from uploading documents, writing replies and seeing everything on the site. Civil discourse is still required.

    Let’s make it rain transparency.

    Jonathan Miller
    REIC Forum Moderator

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  • #963 Reply

    Despite State Level Push, AI National Doesn’t Disclose Actions on Website, Unlike Federal

    AI National’s push for evaluations (a.k.a. on/off switch for USPAP) occurs on the state level.  Scott D. is all over this issue in a number of states and few if any of the AI membership – especially at the chapter board level – are aware of what is going on.  This makes sense as they have been bypassing the local chapter leadership to insert text in upcoming legislation.  Unfortunately, the AI National page that would host state legislative and regulatory issues remains “under construction.”  According to the Wayback Machine, that page has sat dormant since at least October 2, 2016.

    But if you want to know about federal legislation including the Native American Energy Act,  a bill to clarify that nonprofit organizations such as Habitat for Humanity may accept donated mortgage appraisals, and for other purposes, they are readily available.

    It seems that current state-level actions are vastly more immediately relevant to the majority of AI’s residential membership.  Again, a significant trust issue between AI leadership and its membership.

    Jonathan Miller
    REIC Forum Moderator

  • #959 Reply

    Alternative Valuation Standards:  If it’s such a great idea and service, give up your appraiser license and have at it.

    The attached PDF below was posted on a Facebook appraisal group by an AI member who is known well for cheerleading anything that comes out of AI National.  The misrepresentation in the below document is within its name, “Untie Our Hands.”  I also added the AI guide that takes quite the opposite view on evaluations in the context of USPAP.

    Jonathan Miller
    REIC Forum Moderator

  • #955 Reply

    The New AI Residential Appraisal Committee that Jim Amorin Proposed is Off to a Non-Start

    Consistent with AI National’s stealth culture, no one seems to know anything about the status of the new residential committee Jim Amorin proposed to reconnect residential members with the organization – acknowledging that residential has been largely forgotten within AI National.  I’m not sure why this is surprising, but one would think that it would have been executed in good faith after the “taking” debacle to try to rebuild trust in leadership through the eyes of membership.  #fail

    This is what I believe to be true about the new committee so far:

    – 2 committee members became SRAs in the past 5 years or so.

    – I’m told 1 of the above members is the chairman of this new group.  This is a person who offered me during a one-on-one phone conversation to be in such a group even before Jim Amorin announced the idea.  My guess is that Jim’s idea to form the residential committee came from this person and this person was rewarded with the chairmanship.  It is also consistent with the calls and emails this person placed to my colleagues and an organization I am involved with to spread falsehoods seemingly to advance in the pecking order of AI National. (Helpful hint to this person: I’ve never held an AI designation). Let us hope that the passive-aggressive behavior of this individual is NOT the new face of the next generation of AI National.

    – 1 other committee member from a difference part of the country than the previous 2.

    – 1 committee member that is no longer an appraiser resigned.

    – 2 invited to be committee members, refused.

    That nets out to 3 actual committee members I am aware of.

    Are there more?

    Is this going to be another FNC deal where it takes a decade to disclose?  Why are this committee’s activities not being shared with membership when it was offered as an olive branch to residential members that have been neglected?  Perhaps I am jumping the gun, and they haven’t met or discussed anything substantial yet.

    My rationale is that this new committee was simply a diversion from the “taking” which is on schedule to resume on January 1, 2018, and their aggressive strategy to push alternative standards nationwide.  It suggests action and gives a wannabe leader in this committee something to hold on to. When the same people that are part of the problem are tasked with solving the problem, the result is predictable.

    Keep in mind that the alternative standards being pushed by AI executives end up screwing the residential members in the long run so why would this committee ever get traction?

    Conclusion?  Residential membership is DOA to AI National.




    Jonathan Miller
    REIC Forum Moderator

  • #944 Reply

    AI National Has “Nothing to Hide” And The Public Trust Be Damned

    There’s a test, actually more of the game I like to play that I’ve mentioned in the past. It’s called stupid or liar.  It’s useful when supposedly smart people try to hard sell you on an issue with an out of context message that doesn’t make sense. This is exactly the game that the Appraisal Institute has been playing with their membership, I’m guessing because there seems to be some sort of end game that promises revenue to them later on.

    An email has been making the rounds that was sent to Jim Amorin seeking answers to the way AI National has expended incredible energy and resources they probably don’t have – to make sure appraisers have the right to do $25 evaluations.

    Most of AI membership and the appraisal industry remain dumbfounded by AI National’s efforts to enable appraisers to do $25 evaluations, but as Jim Amorin replied in the email when asked if the email could be shared – making sure he copied the inner circle that is responsible for the current state of AI National:

    Cc: Jim Murrett <jmurrett@appraisalinstitute.org>; Stephen Wagner <swagner@appraisalinstitute.org>; <SRobinson@appraisalinstitute.org> <srobinson@appraisalinstitute.org>; Fred Grubbe <fgrubbe@appraisalinstitute.org>; Bill Godden <bgodden@appraisalinstitute.org>

    His response was:

    …I assumed it would be shared. Nothing to hide

    Here is the AI National’s boilerplate rationale that Jim Amorin sent to justify damaging the livelihoods of residential appraisers by confusing the marketplace and violating the public trust with $25 evaluation fees:

    Under federal law, many mortgage loan transactions can be originated using evaluations instead of appraisals. Over the last several years a number of new services and processes have been introduced to the marketplace to attempt to provide clients with alternatives to traditional appraisals where their use is allowed. While these “alternative” valuation products are marketed under various names, the two primary types of products provided by real estate sales professionals are broker price opinions (BPOs) and comparative market analyses (CMAs). However, due to state appraiser licensing & certification laws the ability of a real estate broker or salesperson to render a BPO or a CMA is limited in many states to the real estate listing and sales process. Several states have enacted new laws to expand the ability for brokers and salespersons to render BPOs and CMAs. A few states (GA, IN and TN) have amended their state appraiser licensing laws to allow appraisers to perform evaluations without having to comply with USPAP.
    We are not making moves to get eval products more widely accepted. What we are doing is trying to level the playing filed so that appraisers can compete on the same footing as brokers and other non-appraisers if they chose to develop this line of work. Of course we are always suggesting that an appraisal is a better, more fully developed product performed by someone with years of experience and credentials. That said, evals and BPOs are being done everyday by unlicensed people and of course we do not think that is a good thing for the public trust.

    To a passer-by, this explanation sounds very official and Jim is certainly brimming with confidence. Scott DiBiaso, the pit bull on this issue at the state level, in a separate email chain spoke with the same confidence:

    Yep. Just as Jim Amorin said. Evaluations are a fact of life that are allowed under federal law and used in the marketplace every day. Currently appraisers are precluded from providing evaluations in most states because of the requirements to comply with USPAP.

    We have legislation pending in a number of states that would allow state-licensed and state-certified appraisers to perform a non-USPAP compliant evaluation when a USPAP-compliant product is not required by federal law.

    We are not trying to expand the use of evaluations. Rather, we are trying to allow appraisers to be able to perform those services if they so choose.



    Incidentally, pool cleaning and dog grooming are licensed practices in New York.

    AI National’s responses are poorly reasoned and damaging to appraisers and the appraisal industry – particularly residential appraisers because it assumes that the public is just as informed as appraisers and the AI National Board. As Scott indicated, AI National merely wants to give appraisers more choices for business opportunities, and if they want to do evaluations, they will have the right to do them rather than have non-appraisers do them.

    But to do that, they directly violate the public trust because the public doesn’t understand the difference.

    Let’s be clear. When an appraiser comes up with a value for a consumer no matter what the nuances of a particular law is, they see it as an appraisal. It is not a box. It is not a fox. It is not a dog. It is not a log. It’s not even green eggs and ham. It is an appraisal. That is what an appraisal is to the consumer. This applies to real estate, art, personal property, etc. The fact that AI National advocates a “flip the switch” solution to turn USPAP on or off violates the public trust.

    Here’s another way of looking at it:

    Appraisal value = $500,000
    or (assuming it was done accurately)
    Evaluation value = $500,000

    Appraisal value = $500,000
    or (assuming it was wrong)
    Evaluation value = $700,000 – borrower and lender are exposed to risk.

    Appraisal value = $500,000
    or (assuming it was wrong)
    Evaluation value = $300,000 – borrower didn’t get the loan they needed and the lender lost a business opportunity.

    The consumer HAS NO IDEA how either value in each scenario was estimated but one thing they do know – the number is a number and the person giving the number is an appraiser. This situation is a direct violation of the public trust. AI National is making the case that the consumer understands the nuance.

    When I took my state license exam back in 1991, I was in the room with dog groomers, cable installers and pool cleaners to take various licensing exams.

    Brain Surgeon v. Plumber Analogy  Now let’s say that a brain surgeon can flip on and off their credentials when doing surgery. They are standing in the green surgical gown speaking to the patient beforehand. The patient has financial troubles, and the surgeon had previously offered to do the procedure cheaper – so the surgeon flips the switch and is no longer a doctor. He botches the surgery, and the patient sues the doctor because as far as they are concerned, they went through with the surgery because they knew that the doctor went to medical school and knew how to do the surgery. It wasn’t a plumber (no offense) that walked off the street to do the procedure at a cheaper rate than a surgeon. It was the same person. The public cannot distinguish between the two. AI National is representing appraisers.  Appraisers have a lot more training about valuation than someone walking in off the street doing evaluations.

    Credit Rating Agency v. Electrician Analogy  To the handful of appraisers just dying to do evaluations, are thinking “I am a good appraiser, and I should have the right to do all the evaluations I can handle.” I understand this point except in practice it’s not just appraisers that will be doing evaluations when it is allowed. Trained appraisers will be in the mix with dog groomers, cable installers and pool cleaners.  This is the same logic rating agencies used back during the bubble when mixing AAA rated mortgage tranches with BBB-  tranches to get AAA ratings for the mortgage pool and that ended badly when the credit bubble burst. AMC order volume comes off a conveyor belt with no discern for nuances in expertise. If I were an AMC, I’d much prefer having an appraiser do an evaluation for a fraction of the cost of doing an appraisal because the result would be more reliable than those pesky dog groomers, cable installers and pool cleaners.  Appraisers will eventually go out of business because the cost of education and training will no longer be affordable as those evaluation assignments rise and appraisal assignments fall.

    Protecting the Public Trust  This is what keeps the appraisal industry in business – it holds our industry to a higher standard than dog groomers, cable installers and pool cleaners. I agree that appraisers can do evaluations better than most pool cleaners and I could crank out reliable evaluations all day long but we are also competing with people like my previous examples that don’t have any training, mentoring or classroom education. The consumer doesn’t see this at all or know the difference. Remember that just because a small number of appraisers are trying to do evaluations doesn’t mean only appraisers will be doing them – appraisers are but a small part of the pool of form fillers that would be engaged.  In other professions, practitioners like doctors and electricians are seen by the consumer as doctors and electricians, and there is a public trust that the service quality will reflect their training. In the heavily lobbied and promoted AI National position on evaluations – the one that is sending Scott flying all around the country lobbying for alternative standards – appraising is somehow different and is not a profession or a trade group like those doctors and electricians.

    Except there is a flaw in logic:

    When the consumer is the recipient of an evaluation, they receive a value opinion as the end result. When the consumer is the recipient of an appraisal, they receive a value opinion as the end result. The consumer isn’t steeped in appraisal industry knowledge to know the difference in how they were prepared or who did them or their variations on reliability. To them, it is a value, and a value is a value because consumers retain an underlying perception that someone with valuation experience performed the assignment and they received a value.

    The vast majority of evaluations will continue to be completed by people who don’t have an appraiser’s expertise – as I mentioned, those dog groomers, cable installers, pool cleaners and others who want to rustle up an extra $25, $50, even $150 on the side aren’t going away with this AI National effort. There aren’t enough appraisers to handle even the majority of the evaluation market, so you are mixing AAA with BBB- quality. The consumer doesn’t know the difference because a value is a value in their minds.

    This damages the appraisal profession’s image. It is clear that AI National leadership has little understanding of the residential appraisal industry and is wholly focused on the commercial world.

    So back to the game “stupid or liar” that I mentioned earlier. Is AI National this stupid or are they lying (aka falsehood) because some other deal lays in waiting with REVAA, FNC or elsewhere? I just can’t accept that these executives, coupled with all their other offenses committed towards residential appraisers are this disconnected?

    As time moves on, residential appraisal skills will be worth the same as dog groomers, cable installers, pool cleaners and those appraisers dying to do $25 evaluations will be forced to compete with dog groomers, cable installers, pool cleaners for business.

    In reality, you either are an appraiser or you aren’t.

    Own it.


    Jonathan Miller
    REIC Forum Moderator

  • #942 Reply

    Survey: Back in 2008, AI National Leadership Pushed For Support of AMCs in HVCC Despite Significant Residential Appraiser Pushback

    To get a better understand on AI National’s feelings towards residential appraisers, consider these membership survey results the year before HVCC went into effect. Even though the AI membership was very uncomfortable with HVCC and some of the chart results below were quite telling about what the state of residential appraising would become, the AI National pressed forward with their support of AMCs.

    I think it might have been a case of “it was inevitable anyway so let’s get it over with.”

    Jonathan Miller
    REIC Forum Moderator

  • #921 Reply

    Email Chain Debate About The Use of Evaluations Part #1

    Lots of pieces flying around as particpants responded to different people so I’ve tried to present the thread in chronological order and deleted the hundreds of email addresses cc’d. Good discussion. What’s interesting about the discussion is that a number of the particpants tended to only speak through their own optics rather than see far into the future. I think it says a lot about our industry and why we are in the predicament we are in.


    You can tell them to give “that hope up” for about a $5,000 to $10,000 legal fee.

    Tom Allen

    That simply defeats the purpose. That is an appraisal. An evaluation is not an appraisal. Clients do not want appraisals when an evaluation is allowed. I have been a client nationwide for 25 years. I want Non-uspap evals when I need such. I will get appraisals when I need them.

    States cannot regulate evals…tell them to give that hope up:)

    The back and forth has been entertaining and enlightening. My urge is to weigh in, but all I have is a phone for typing a response.

    Sitting with a bunch of appraiser regulators at their AARO meeting. Be assured, the issue is being discussed here.

    Given the Scope of Work Rule, how tough is it to prepare an evaluation in compliance with USPAP?

    Francois (Frank) K. Gregoire IFA RAA


    Thanks for your input George. Much appreciated.

    Agree about the longevity of evaluations. AVMs have been around that long as well. I’d really love appraisers to be around longer too. This importance of this conversation is more about the longevity and relevance of the appraisal industry and less about getting evaluation fees tomorrow.

    The public trust part has not been addressed – it is the actual issue at stake that determines whether we remain around much longer. As you and Alex suggest, things are changing rapidly and we need to adapt and shouldn’t fear change. Of course the stakeholders that push this theme love to have your help because we are on the endangered species list and creating confusion by flipping the switch at our convenience justifies our elimination.

    Thats because the public trust is what keeps the appraisal industry in business – it holds our industry at a higher standard than pool cleaning form fillers. Just because a pool cleaner can do an evaluation, doesn’t make that a basis of comparison. You are pining for heavy evaluation volume which is just a hop skip and a jump from all appraisals for mortgage lending morphing into evaluation requests. I agree that you and I could crank out reliable evaluations all day long but we are also competing with people like my previous examples that don’t have any training, mentoring or classroom education. The consumer doesn’t see this at all or know the difference.

    A decade from now, after most on this email chain are retired and AI is gone, there won’t be a person like you left to do a good job on an evaluation because those remaining can’t spend money to be part of AI or take classes by living on a larger and larger share of evaluations. Their expertise will never be equal to yours. The economics that face mortgage appraisers who rely on evaluations won’t allow it. In my view you’re not valuing your current expertise correctly which seems ironic.

    A decade from now, because the end consumer won’t know the difference between an evaluation and an appraisal, and no one is left with experience and training, why would there be a need for an appraiser in the world you describe? This is why vast majority of the states don’t want to see the line crossed – the public trust.

    So while I appreciate the short term “make money or someone else will,” which is your ongoing mantra and of which I empathize, you are operating on the assumption that everything remains the same pertaining to the collective knowledge of our industry. Yet in less than a decade our collective expertise as an industry will be largely gone as the inflow of new appraisers will be focused on product like evaluations, which will also influence the caliber of new entrants. The product you could crank out with a high level of expertise won’t have the equivalent person to do that in a decade because the economics for mentoring and education won’t exist.

    I am a technology-fascinated person and get the new mortgage world. I agree there is a place for some of this new product, but please don’t diminish the difference between an appraisal and something else. Your intentions are pure but I don’t think you appreciate the implications of evaluations for the future.

    Then again, that’s just my opinion. Thanks again or sharing yours.





    What does a Non-USPAP Evaluation look like? Also, how does any action or non-action taken have no liability at some level even if it self-imposed? I have liability just being known as an appraiser.

    Tom Allen

    Hi Jonathan,

    I am sure Alex will speak up on his part soon.

    I won’t argue any points for or against this or that. As this simply comes down to the following questions and clients and non-appraisers doing evaluations won’t care if appraisers choose to keep themselves out of the game. Appraisers are hurting themselves and they sure have the right to continue to do so.

    1. Evaluations have been around since at least 1990. They will continue to be around forever.
    2. FIRREA allows licensed appraisers to perform Non-USPAP Evaluations.
    3. However, 46 state laws prohibit appraisers from doing Non-USPAP Evaluations.
    4. Do licensed appraisers want to remain prohibited from doing Evaluations? Do they want to miss out on this large volume of work that they are most qualified to do?

    It is that simple.

    I have heard all of the arguments over the past 23+ years of trying to get the appraisal industry to get state laws changed. All of them can be argued against. But, that is fruitless. I simply say, if you don’t want to do evaluations, don’t do them. If you don’t want to do drive-by appraisals, don’t do them. If you don’t want to do appraisals for banks, don’t do them. But, to me, it is selfish as can be to keep your peers from having the opportunity to provide a service that has been legal per federal law for 27 years!

    Those appraisal offices that have implemented evaluation programs can explain all of the benefits regarding trainees, building up databases or getting paid for existing data over and over again, and so on.

    As with all arguments we can all go pick another industry and make up a comparison. Mine would be accounting. Imagine if laws said that hey CPAs must follow GAAP for certain assignments (reality is just for published annual reports of public companies). And state laws say hey if you are filing personal tax returns you must also follow GAAP and be a licensed accountant. Well, heck, I am not going to pay an accountant or especially a CPA to do my tax returns when GAAP is not needed for such. So, I do them myself. Or I find bookkeepers who aren’t licensed accountants or anyone like that who does tax returns but aren’t licensed accountants. Where is the benefit to anyone with such state laws? Accountants can’t provide a service they would probably be most qualified for. I couldn’t hire an accountant to do my tax returns without them wanting to follow GAAP. And so on. That is where we stand re evaluations and USPAP and so on. it only hurts appraisers…hurts the public. Now this example can be argues with because it is hypothetical. But, so can all of the others. We just need to stay on our industry and our issue.

    And again, do we want to allow our professional appraisers a chance to do something that less qualified people have been doing for 27 years and will continue to do regardless of what we choose as an industry?

    For several decades most appraisers have said they prefer them and their peers in most states not be allowed to provide this service. As an user of these services, I have always said appraisers have been the losers by doing this.

    BTW, commercial is the big issue for these. Residential already has drive-by appraisals and AVMs and all kinds of things that can be done in place of evaluations at a competitive price. In commercial, it is a RAR vs an Eval only.

    Everyone enjoy their weekend.

    At least we are debating unlike those people inside the Beltway:)


    Hi Lori,

    1. The fee ratio of an Evaluation versus a RAR, both done by a licensed appraiser, is no where near the 80%-90% reduction those without experience like to toss around. I have ordered both in States like TN for 20+ years and know the exact difference we obviously can’t disclose publicly. And most importantly, 100% of those appraisers who choose to do Evals love them. Those who don’t like them don’t do them. Why keep your peers from making a business decision. I would rather not dictate to the small future generation of appraisers what services they can or cannot provide – especially in regard to one they have been legally allowed to provide by Federal Law for 27 years!

    2. I, and others, who have done evals nationwide for decades do them because there is NO liability. Not more. We don’t deal with USPAP. Don’t deal with states. Only FIRREA is important and banks are examined by the Agencies and those can talk to us if they so desire…..but so far so good after 25 years.

    3. As for Public Trust, right now in 47 states the public has to rely on non-appraiser evals provided by their banks. A low quality eval – albeit several sources put evals that easily rival the quality of appraisals. So, how can public trust not improve by allowing the most qualified people do them? It cannot go down by allowing this. It can only go up.

    As I have preached to appraisers nationwide for 23+ years now, it is your choice – do you want the chance to do this business that your state is currently prohibiting you from (most states, not all)? Or do you want the chance to do it? You have lost out on this work for 27 years….trust me, your clients and those doing evals care less if you choose to lose out on it forever. Non-USPAP Evals will always be done….do the most qualified people want to be part of that or not? I 100% guaranty that without states laws being made to match federal law, there will not be an increase in appraisals from the world of evaluations.


    Thanks for the discussion and expanded details. Please help us all get this straight.

    Say, hypothetically, an appraiser performs one of these options in a month.

    50 Evaluations on the streets at $50/each or
    10 Appraisals at $600+/each.

    So, what you describe is that evaluations are a better risk factor for appraisers when it comes to liability? Am I understanding your methodology correctly, because it doesn’t seem logical.

    Also, I’ve worked side by side with community bankers for a couple of decades now where they performed their own evaluations. These folks are market savvy and understand liability because their loans are kept on their books. Very low to no foreclosures, also.

    The concern here is that I don’t see any major market changes or dynamics where there is suddenly a “NEW” demand factor. It appears to be a “SHIFT” of the same business with the same amount of requirements, for less money, and more liability. What I see is selling the valuation industry short on substance and tall on talk that serves only a very select few. What you’ve proposed widens the gap between cheap and high end, it practically eliminates the middle ground.

    Please help us understand why it’s logical to do the same amount of work, for less money, with increased liability? How is this protecting the public trust?


    Lori A. Noble


    Hi Alex,

    Thanks for sharing your opinion and including AI National leadership. I disagree with your logic, and also with George Mann’s followup email. I am not picking a fight but only want you to consider points outside the AI National position on this issue. Honestly, I believe you’re coming at it backward and don’t understand the undermining of the public trust which will damage your future appraisal opportunities.

    You seem to be saying the appraisal and evaluation as the same thing because they both present a value and who better qualified to do something less than an appraisal than an appraiser? Of course.

    The rationale is “I am a good appraiser, and I should have the right to do all the evaluations I can handle.” I understand your point except in practice it’s not just appraisers that will be doing evaluations when it is allowed. Trained appraisers will be in the mix with dog groomers, cable installers and pool cleaners (the same logic rating agencies used when mixing AAA (you) rated mortgage tranches with BBB- (pool cleaners) tranches to get AAA ratings for the mortgage pool and that ended badly). AMC order volume comes off a conveyor belt with no discern for nuances in expertise. If I were an AMC, I’d much prefer having an appraiser do an evaluation for a fraction of the cost of doing because the result would be more reliable. The only problem is the appraisers will eventual go out of business because the cost of education and training will no longer be affordable.

    Remember that just because you want appraisers to do evaluations doesn’t mean only appraisers will be doing them – we’re a small part of the pool of form fillers that would be engaged.

    In other professions, practitioners like doctors and electricians are seen by the consumer as doctors and electricians, and there is a public trust that the service quality will reflect their training. In the heavily lobbied and promoted AI National position on evaluations – the one that is sending Scott flying all around the country lobbying for alternative standards – appraising is somehow different and is not a profession or a trade like those doctors and electricians.

    Except there is a flaw in logic:

    When the consumer is the recipient of an evaluation, they receive a value opinion as the end result. When the consumer is the recipient of an appraisal, they receive a value opinion as the end result. The consumer isn’t steeped in appraisal industry knowledge to know the difference in how they were prepared or who did them or their variations on reliability. To them, it is a value, and a value is a value because consumers retain an underlying perception that someone with valuation experience performed the assignment and they received a value.

    In your situation, you might know the value because you are an expert in your market. Good for you. I am an expert in my market as well. Now think beyond that and consider your future. The vast majority of evaluations will continue to be completed by people who don’t have your expertise – as I mentioned, those dog groomers, cable installers, pool cleaners and others who want to rustle up an extra $25, $50, even $150 on the side. There aren’t enough appraisers to handle even the majority of the evaluation market, so you are mixing AAA with BBB- quality. The consumer doesn’t know the difference because a value is a value.

    This is a betrayal of the public trust and will rapidly accelerate the deterioration of the residential appraisal industry. Why have appraisers at all? Coming up with a value is an appraisal, especially when it is done by an appraiser. You don’t have the luxury to switch that on and off. Just like a doctor and electrician don’t have that luxury of not being a doctor and electrician when they are performing related services.

    Now to address your admittedly low brow “scared of change” comment to your peers. In reality, at least in reference to our industry, being scared is born out of AI National culture that I have observed first hand. Transparency is critical for our industry’s future. That’s why it is so great for you to share your views even though we disagree. I know that our profession and others, in fact, dare I say most human beings, are scared of change – you wrongly assume that appraisers have a monopoly on that fear – but that has nothing to do with the evaluation issue.

    Change for changes sake or more specifically change recommended by an organization that hasn’t materially helped residential appraisers for years – evidenced by a one-third decline in membership since 2007 – doesn’t make AI the experts or leaders on the topic of evaluations, especially since every member I have ever met except for a handful have said AI leadership culture does not enable input from most members nor do they share much of their rationale on anything with their members.

    I only urge you to step back from your vantage point and look at the profession around you at large. Evaluations aren’t being done in a vacuum but they will be done by someone who uses a vacuum for a living like a pool cleaner. By following the position that AI National advocates, you are devaluing the value of your professional training. Eventually your appraisal skills will be worth the same as pool cleaners and you’ll be forced to compete with them for those evaluations you and George seem to want so badly. In reality, you either are an appraiser or you are not. Own it.



    Hi Mark,

    Oh the VA language is abysmal (my apologies to any VA legislatures on this email list….but….TN has perfect language btw) as I am sure Alex will agree with. The hope is to clean it up next year. I will let Alex opine to that question. At a minimum, someone can write to the VA Atty General like TN did 10 or so years ago (I have the AG ruling somewhere on this laptop) and get the AG to confirm yep that is what the law says. Of course, July 1 hasn’t occurred yet and I wouldn’t ask a hypothetical today. I would wait. But, maybe Alex can make you feel comfortable with it in the interim.

    Re banks and CUs, just like promoting appraisal work….the same thing. Per FIRREA, appraisals and evals are pretty much the same except USPAP does not need to be followed for evals. So, independence is required. Market Value As Is of Real Estate Only is required. Competence. So, all of the things you promote about yourself to get on approved appraisal lists goes for evals – they just need to know you are willing to do them as of July 1. Like most businesses, you contact your existing clients to cross-sell. From there on to new clients.

    If I were doing this (and I have done this for and with several companies over the years and many right now in fact), I would develop my template for the different property types. For 1-4 unit residential, I think many of the software providers have eval forms…I might be mistaken though….1-4 residential is not my forte. For commercial, you can cover almost all property types (it is unlikely evals will be requested for complex properties like marinas and hotels and so on) with one format – like an appraisal report does. I would just come up with a few samples – take some actual appraisal reports of SIMPLE properties and convert down to an Eval…i.e. get rid of all that USPAP stuff like certification, limiting conditions, and on and on. Read the Dec 2010 IAEG for exactly what is needed.

    Personally, I wouldn’t go market without providing a few redacted sample reports.

    Hope this helps and heck football and basketball are over with so nothing to do on the weekends now:) lol


    Alex & George,

    Thank you for your comments.

    George, I especially appreciate your insight and comments on this matter given your background as a Chief Appraiser for a large bank. Can either of you state definitively that the newly passed Virginia law allows appraisers to perform evals for FRTs? To me, the language appears a bit muddy.

    George, now that this huge volume of business is available to me in Virginia, how would you suggest that I go about procuring this business (residential and commercial) from lenders?

    Thanks for giving your time on a Saturday to us.

    Mark White, SRA

    Amen Alex to all you say.

    It is this simple. Since 1990, us banks have been getting evals done. We will always get them done. Thus, they have NEVER hurt appraisal business. All of the appraisals done since 1990 were done at the same time that yes 4x as many evals were done – almost all by non-appraisers!

    Those less competent people have been loving this business for over a quarter of a century!

    TN was the first state to get smart about this 20+ years ago and allow their licensed appraisers to do true non-USPAP Evaluations. GA and IN and now VA see the benefit.

    As clients, we would love to use the most qualified people (i.e. Licensed Appraisers) to perform Evaluations. But, unlike Federal Law that says we can, almost all State Laws say we can’t. So, appraisers have been losing out on a tremendous amount of business (I have heard of appraisers giving up their licenses to just do evals as the business is much larger!). Banks and the public have been getting an inferior product.

    Passing these laws will benefit appraisers, banks, and the public.

    The one thing I can guaranty – banks will not order Restricted Appraisal Reports to meet the Evaluation need. Yes, a small minority does do that. They are at a competitive disadvantage, but that is their business decision to make. The vast majority since 1990 and onward forever will get non-USPAP Evaluations.

    If you choose not to do Evaluations for any reason, that is fine. But, why keep other licensed appraisers from making a better living?

    Some appraisers choose not to do work for banks or AMCs or eminent domain or whatever. They have that choice.

    Federal Law has said since 1990 that appraisers should have that choice re non-USPAP Evaluations. All that is being attempted is to have State Laws match up with Federal Law so appraisers can perform a service they are best to provide.



    Appraisers are scared of change. They keep themselves in the dark and become mushrooms. Years ago I did a lot of appraisals for HELOC. I do very very few now. I guess that is because the banks are not making these loans any more. WRONG! You know it and I know it.

    Hmm, I just got a HELOC about three months ago. The bank did an evaluation. My loan officer drove by my property took a picture and pull sales for the county web site along with the assessment. Approved and I was charged $150 for an evaluation. Why am I not allowed to do evaluations? I know more about valuing real estate than my banker. I figured he had 15 minutes in it. Including travel time as the bank branch is only 1 mile from my property.

    Now, I got this order yesterday, note the additional Information….


    Evaluation came in lower than anticipated. So the original order I could not do. But since the Eval did not work, they want a full appraisal. If the eval worked there would be no order and we would be none the wiser. This is what is going on. The appraisers don’t see it because it does not require an appraisal. I have seen this before. We all have. I sat and said, I wish I could do both. WAIT. In July I can. The above is not fertilizer, its cold hard facts. It’s about a 4 to 1 ratio. There are 4 evaluations done for each appraisal. Appraisers are missing out on a way to make money. Say we get 25% of those evaluations, your business just doubled!!

    These so called evaluation people ( which is anyone ) can provide this service. But the most qualified person (an appraiser) can not. But a so called evaluation person can not provide an appraisal. Two separate sand boxes we play in. Well as of July, Virginia appraisers can play in their sandbox, but they are still not allowed in ours!

    If I did the evaluation and in came in low, do you think the bank will order an appraisal with another appraiser or just say “Alex, lets upgrade this to a full appraisal”.

    From only 3 states that allowed this ten years ago to now 17 states that have passed it or are considering it. The appraisers are tired of being told how they can do business. The vast majority of appraisers are for this.

    AMC’s are concerned about this. AMC’s are doing the evaluations and are making good money at it. THEY DO NOT HAVE TO BE LICENSED TO EVALUATIONS. No one does! This does not benefit them. This cuts into their work load. Instead of Bank A going to his AMC, he can go directly to the appraiser. Since its not an appraisal, it can be ordered by ANYONE in the bank. My loan officer did the evaluation!! No conflicts there or vested interest there, right?

    I want to thank George Mann, MAI, Bill Garber, Scott Dibiasio and the Appraisal Institute for showing me another way to make money. Because evaluations are totally different from an appraisal, my designation is not diminished.



    we don’t have a relationship with REVVA. I am glad to see the typo It is REVAAJ .. I do believe you when you say we don’t have a relationship with REVAA but a link on their website takes you here to a page on the AI website.

    That may not constitute a relationship. I know a very few AI members may be involved with management or even ownership of AMCs but the huge majority (I’m going to say north of 95%) of the dues paying residential members wouldn’t spit on an AMC if it was on fire. I just hate to see any kind of connection made. They are using our good name to further their cause to the detriment to our members. We can’t roll back the clock but we should not help them advance their cause either.
    Thanks for what you do and for always listening.

    Jim Goodrich, CCIM, SRA, MAI


    Received a few comments from some on this list that they don’t want to be copied so this is the last I’ll respond to all. You can ask Eric or Rob to bring a motion for the survey you request.

    Just as one last comment for now…we don’t have a relationship with REVVA. Some of our members may be a part of REVVA, I don’t know, but I have never attended their meetings or spoken with them. If we have it has been tangential to other issues. I don’t know where these crazy unfounded rumors come from.

    Sent from my iPhone



    Thanks for the response.

    I BCC out of respect to those that might not want to get others responses and might not care about the issues. But here they are. I hope that many will take the opportunity to voice their feelings—either way…

    I don’t recall ever making this statement—–

    You have told me in the past you just want the hands of time turned back so that for another 5 to 10 years, until you an retire, you can do what you’ve always done.

    Retirement is a foreign word in my limited vocabulary. I have more concern about the industry, AI and the youth in my office. AI National actions seem to be chipping away at the foundation of the organization and the profession. Although I am fond of saying “ I don’t mind change, as long as it’s not different”. I have embraced change over the years and do so every day relative to how things were 10 years ago. This is attested to by my weight, eyesight, memory and hair color.

    I don’t like change that is not better and only pushed to accomplish interest of those with a salesman or lobbyist that would not benefit the public, consumer or the industry. Also am concerned when my professional organization that I pay dues to support causes alien to membership.

    Regardless—I am opposed to the Eval efforts as you have not convinced me of the benefits. I still remain open to being persuaded otherwise.

    At present, AI seems to be spending time and money on the interest of very few and to the detriment of the industry, the public and in my perception AI membership. Why not survey membership and see where it stands?

    Might also include in the survey support for the following;

    1. Alternative valuation standards (Still confused on this and the reasoning)

    2. The International effort (Personally –I am opposed –as I believe I have voiced before)

    3. Our participation with REVAA ( This is a topic I would like to hear about if we do have a relationship)

    4. Chapter financial takeover ( how badly can an issue be handled—this could have been done over time as a chapter option—seems now there are egos involved and those are not at the chapter level)

    5. National conference in Canada (Less than member sensitive)

    6. Appraisal Foundation relationship

    If a survey is out of the question, lets at least get some more information about #1 and #3.

    Who is on the Residential Appraiser Project Team?

    My comment /meaningful suggestion would be to engage residential membership in this endeavor by setting up chapter level teams that could come together with their ideas/suggestions. Believe this possibly would be more effective than another National level project team with National level influence and guidance.

    And Jim, I really do appreciate your efforts in making the FNC deal public. A prime example of an instance opposed to by membership that was pushed by National even though it was used against membership.

    Thank for taking the time and have a great weekend!




    I have received your email on this topic. I find it difficult to manage a topic like this when you blind copy people and don’t provide me the courtesy of knowing who. I have always treated you with the utmost respect. I simply do not have time to respond individually to the various responses I have thus far received.

    Here’s the short answer. There are in fact, a number of members who are looking for this. They want to be able to compete fairly with those who are unlicensed or certified who are doing this type of work. Of course, as an organization, we believe in hiring competent appraisers for every valuation assignment. But we simply cannot ignore that the market is using alternatives to the 1004 and 2055 and that this work is being done by non-valuation professionals who are operating in a world of no oversight and no rules.

    The actions on evals in both Virginia and North Carolina are being developed by our members and chapters. Yes we support their efforts when asked. While some may not have been aware of it, it primarily is a local effort. Alex Uminski and Jean Gannon lead the efforts in Virginia. If some members in those areas were uninformed I think their issue should be with someone other than National. The North Carolina chapter has lead efforts there.

    You have been a champion for residential appraisers in particular. You know what is happening in the market. Every time we turn around there is something new impacting appraisers in a non-positive way. Do I personally wish evals and AVMs and BPOs and every other non-traditional product would go away in lieu of 1004s? You’re damn right I do just like you. But that reality, is in fact, a fiction. When is the last time you went to the 1-hour photo shop to get pictures for your report to tape in? Markets change because users of services are looking for different products. They are not looking for different products because the AI says you should use a different product. We have always taken a position to hire the best, most qualified appraiser for each assignment. We have always taken a position that for valuation work that is our members. That won’t change.

    Earlier this week we testified about the VA process and spoke about how it is a model for the rest of the industry to follow. Clear Capital was there pushing their “desktop” product. We strongly urged Congress to keep the current system in-lieu of alternatives.

    I know the gist of almost all of your emails and phone calls to me stem from a single issues – appraisers are feeling pain in the market and what can we do to help. That is honorable and why I always treat you seriously. We are trying to do the same things. You have told me in the past you just want the hands of time turned back so that for another 5 to 10 years, until you an retire, you can do what you’ve always done. Offer up some meaningful suggestions on how we can effectively turn back those hands and we are all ears. In the meantime, we have to try and navigate where we are the best way we can. The Residential Appraiser Project Team has a broad charge to help us better understand how to make the world a more attractive place for appraisers. This team has begun its work in earnest and many of the people on this team are supportive of the eval issue, even while some of them will likely never do any of that type of work.



    Thanks for your response.

    Whether due to AI communications abilities or the issue itself, from my viewpoint this has limited membership support. Who is responsible for it? Are you aware of AI’s membership interest in doing “evaluations” or will this benefit a few at the expense of the majority?

    I will admit that I am not sure I am fully informed or aware of all the issues, (bet I am not alone). But the same reasoning that many were opposed to it several years ago remains relevant. It is a lesser product at the expense of services currently being offered by your membership. AI support of a lesser valuation products is not good for the public or the consumer, not to mention your membership.

    This initiative would seemingly benefit some of the larger national service providers, (AMC’s). . The Institute should not be supporting or promoting these limited scope products.

    Isn’t it amazing how as soon as the market starts improving, calls for lesser appraisal products are a big topic?

    Likely I am missing some relevant aspects that I am sure you and others will fill in.

    It is my request that you communicate and educate AI membership on your reasoning for this initiative. Would the board consider surveying membership on this and other issues being supported with dues?

    Educate/convince me to see your side as being a positive for the public, consumer and those you represent.

    Thanks in advance,



    Ron I assumed it would be shared. Nothing to hide



    Thanks for the reply. I will assume that it is OK to share with others. I will review the info you provided.



    Under federal law, many mortgage loan transactions can be originated using evaluations instead of appraisals. Over the last several years a number of new services and processes have been introduced to the marketplace to attempt to provide clients with alternatives to traditional appraisals where their use is allowed. While these “alternative” valuation products are marketed under various names, the two primary types of products provided by real estate sales professionals are broker price opinions (BPOs) and comparative market analyses (CMAs). However, due to state appraiser licensing & certification laws the ability of a real estate broker or salesperson to render a BPO or a CMA is limited in many states to the real estate listing and sales process. Several states have enacted new laws to expand the ability for brokers and salespersons to render BPOs and CMAs. A few states (GA, IN and TN) have amended their state appraiser licensing laws to allow appraisers to perform evaluations without having to comply with USPAP.
    We are not making moves to get eval products more widely accepted. What we are doing is trying to level the playing filed so that appraisers can compete on the same footing as brokers and other non-appraisers if they chose to develop this line of work. Of course we are always suggesting that an appraisal is a better, more fully developed product performed by someone with years of experience and credentials. That said, evals and BPOs are being done everyday by unlicensed people and of course we do not think that is a good thing for the public trust.

    Below you will find a few links related to evals and BPOs
    Interagency Advisory on the Use of Evaluations in Real Estate-Related Financial Transactions (2016)
    Interagency Appraisal and Evaluation Guidelines (2010)
    Georgia “Evaluation Appraisal” Rules
    Tennessee Attorney General Opinion Regarding Evaluations
    Summary of State Laws Regarding Broker Price Opinions (BPOs)
    BPO Talking Points
    Delaware BPO Guidance
    Georgia BPO Guidance
    Memorandum from West Virginia Real Estate Commission
    Nevada BPO Policy from Real Estate Commission
    New Jersey BPO Advisory Opinion
    Pennsylvania BPO Interpretation
    Virginia BPO Guidance

    Jim Amorin, MAI, SRA, AI-GRS, SR/WA

    On Apr 3, 2017, at 8:27 AM, Williams, Evan <ewilliams@appraisalinstitute.org> wrote:



    Thanks for the letter. Hope all is well your way.

    Can you inform me on the following issue/question that is making the rounds?

    Is National making moves to get eval products more widely accepted?



    Jonathan Miller
    REIC Forum Moderator

  • #920 Reply

    AI National Doesn’t Need To Be Helpful To Its Members or Anyone Else

    Last week I was speaking to a journalist from a national publication to comment on a national housing market trend. When we finished the interview this person asked me – unsolicited – “Are you part of the Appraisal Institute?”

    I replied, and a little taken aback, “No, why?”

    The reporter proceeded to tell me that in a previous journalism position held in the greater Chicagoland area, their group found the Appraisal Institute awful to deal with. AI was slow to return phone calls if at all, were annoyed at the inquiries and were not helpful in general. They were largely described as a group of “old men” not willing speak with anyone.

    Now compare this to any other trade group like MBA or NAR. These groups are all over any reporters or individuals that make inquires. They do a full court press to help any one that calls them. I’ve been told this by many reporters and have seen this through my own personal experiences.

    Obviously this is only one example of a reporter calling AI National out but it was so out in left field from our conversation and said with such irritation that, it was impactful. It also correlated closely with the reasons for this web site even existing – and the notion that AI National doesn’t keep their membership informed. It makes me wonder why they would do that with reporters and miss frequent branding opportunities.

    Drain the Swamp.

    Jonathan Miller
    REIC Forum Moderator

  • #726 Reply

    Beware the Meaning of AI National’s 900 Million Media Hits (it is easier to relate to 19,000 searches)

    On AI National’s website, there is a link from January that touts their ability to get media attention for their members as the largest U.S. trade organization for appraisers: VIDEO: Appraisal Institute Media Coverage Seen by Nearly 900 Million Between July and December. That’s a big number to the casual reader. My concern over the credibility of stats like this are the following issues. Consider these:

    For mortgage work, the SRA brand is no longer a significant differentiator and it is far less of a differentiator than it was a decade ago for non-mortgage work. This is a common refrain from members I interact with. As I have mentioned before, a number of MAIs I have spoken with say their designation is next, likely fading away in less than a decade. If banks continue to ease their reliance on it (I believe the bank practice violates FIRREA, doesn’t it?) overnight, AI National would collapse within a year. That blame falls squarely on AI National for failing to adequately brand the SRA and MAI designations. It also does and did a disservice to all current and newly former members who dutifully paid dues for years and worked hard to earn their designations.

    But readers here largely understand that.

    So I thought about the 900 million mega number and the trust issue that AI membership has with AI National leadership. They have completely abandoned transparency and their obligation to disclose important organizational plans such as how much they are spending on lobbying ($100k in 2016), the terms of the FNC deal (disclosed recently after a dozen years of denials), why Jim Amorin was allowed a second term when there are many other candidates, why the BOD and executive leaders have to swear allegiance to themselves rather than the membership, how many millions did AI National invest in their failed international recruitment effort, why they are flying Scott DiBiasio around the country to push for alternative standards with misleading information in state legislatures as well as desperately push $25 evaluations when it goes against the needs of their residential membership, to share what is AI National’s apparently close relationship with REVAA (the AMC trade association) and so on.

    And readers here have read about many of these points here already.

    but I digress…

    So I performed a simple test using a ubiquitous Internet search engine….

    349,000 Google Hits for Largest U.S. Appraisal Trade Group

    I queried “Appraisal Institute” in quotes in the “All” category. This wasn’t intended to be compared to their 900 million results since that number is likely representative of lots of other media outlets. But again, there is a deep distrust issue with membership and AI National.

    330,000 Google Hits for Appraisal Company
    I did the same search for my residential appraisal firm “Miller Samuel” which is not the largest U.S. appraisal trade group in the appraisal industry.

    They beat my NYC appraisal firm by 5.79% or 19,000 hits.

    About those hits…it’s ironic that AI is down to about 19,000 members per their website.

    Jonathan Miller
    REIC Forum Moderator

  • #709 Reply

    AI National Pushing Hard for Appraiser’s Right to Do $25 Evaluations With AI Standards, But Forgot What They Said in 2010

    So why does AI National they have Scott DiBiasio running around the country misleading legislators in states like Kansas, Florida and North Carolina on the membership’s dime? What is AI National’s end game? Based on past and recent actions, it seems highly unlikely that membership will ever be told.

    On the AppraisalInstitute.org Website…

    Guide Note 13 (2010): Performing Evaluations of Real Property Collateral for Lenders

    I’ve also attached it below in case they delete from their web site.


    Jonathan Miller
    REIC Forum Moderator

  • #704 Reply

    AI National President Sets New Record for Use of “International” in Magazine Article

    For an organization that has yet to talk to candidly with their membership about their unsuccessful (and supposedly very expensive) efforts to stem the one third decline in AI members since 2007, their president loves to use the word “International” as noted in his intro statement in the current issue of Valuation Magazine.

    On the bright side, this effort does enable AI Leadership to fly around the world at members’ expense.

    Jonathan Miller
    REIC Forum Moderator

  • #681 Reply

    Washington Post March 22, 2017 Kenneth R. Harney: Paying a lot for an appraisal? A middleman may be getting a large part of the fee.

    Here’s must read-piece on AMC appraisal fees.

    Jonathan Miller
    REIC Forum Moderator

  • #678 Reply

    March 22, 2017, Valuation Review Article: CEO suggests appraisal industry comprised of ‘lone wolves’

    Check out this week’s Valuation Review article on our industry – also available over at my Matrix Blog.  This is my recent interview with Valuation Review. I focus on AI National, AMCs and the nature of our industry: Doubling Down On Appraisers as ‘Lone Wolves’ – Valuation Review

    Jonathan Miller
    REIC Forum Moderator

  • #674 Reply

    Frank Gregoire: Florida Appraisers Need to Call Their Representatives ASAP – AI National Misleading Florida Legislature in Amendment to Appraisal Bill

    Scott Dibiasio of AI National is racking up a lot of frequent flyer miles these days on the membership’s dime to work against the industry’s interests. In Florida, Scott is inserting amendments to allow our industry to switch on and off its USPAP compliance to do ±$25 evaluations when appraisers can do evaluation under USPAP (see attached documents) already. Why on earth is AI National pushing these alternative standards as if their life depended on it? There has to be another storyline here we don’t fully understand. While I believe the organization is on its financial final legs, it remains difficult to comprehend their willingness to go rogue and work against their members.

    If passed, this will create chaos as appraisers pick the standard they choose to follow – how can anything be enforced? These proposed amendments damage the public trust of the appraisal industry which is the whole point of having standards in the first place.

    Frank Gregoire writes about these new Florida legislation amendments in his blog Appraiser Active. Please read his post and the documents he included. I’ve also included them below to add to our collection. Frank makes some key points:

    Evaluations are non-appraisals identified and described in the Interagency Appraisal and Evaluation Guidelines. Maybe the amendment language is necessary, but guidance provided by The Appraisal Foundation and the Appraisal Standards Board clearly state appraisers may accept Evaluation Assignment now.

    He goes on to say…

    Standards of practice other than USPAP is a different story. Regardless of what we think of USPAP, does it make sense to adopt a completely different compilation of appraisal standards?

    Jonathan Miller
    REIC Forum Moderator

  • #648 Reply

    AI National Does Not Intend to Change the “Taking” Policy in Any Way. Is This a Sign the End is Near?

    AI National keeps issuing generic responses to membership questions on the return of the “taking” policy. Remember that the policy is only “suspended” and could be implemented on January 1, 2018. Recently national leadership indicated they do not intend to change the “taking” policy nor are they considering any suggestions by membership because this policy is critical to their survival. AI National must see this policy as the only way to save the organization. I have also heard this type of AI National feedback from the chapter level as well.

    Let’s apply some logic:

    – The “taking” policy is critical to AI National’s survival, and…
    – It is a policy to take the funds from all chapters without justifiable reasons, so…
    – They desperately need the cash to stay solvent, which…
    – Explains the irrational behavior of the past couple of years, and…
    – The same leadership that drove the organization to this situation is still in charge, and…
    – They won’t be sharing their plans with membership anytime soon.

    Translation: this is a “money grab” – as some members have already articulated – to save a sinking ship – a ship run by a leadership that has shown no sign of keeping their dues-paying membership informed. With stories of membership resignations and delays paying annual dues, there is a sense of organizational urgency here that is alarming. Based on past actions, it seems unlikely that AI National will alter their course of action.

    I hope I am wrong.

    Jonathan Miller
    REIC Forum Moderator

  • #643 Reply

    AI Region 1 Vice-Chair and Former Seattle Chapter President: “We’ve  Been Shocked At The Outrage” over the AI National “Taking” Policy

    The AI Seattle Board voted in favor of the AI National “taking” policy – but the board was overly reliant on AI National rhetoric (much like the Houston board) without factual support.

    Here is the full text (bold text in the body was my emphasis). It is a slow build up until the actual context of member outrage spills out. I applaud her for her honesty.

    Financial Management Policy
    by Mary Campos, MAI, SRA, AI-GRS, AI-RRS

    In November 2016 the National Board of Directors of the Appraisal Institute passed a motion (Chapter Finance Management Policy) that made significant changes to the way the finances are handled at the chapter level. This was adopted after reports from the Audit Committee were provided over the prior two board meetings. While most of the audit information was given under the confidence of executive session, I’d like to assure you that the information was strong enough to warrant the actions taken. In a perfect world I would like to give you all the information so you can fully understand why this action was taken, however the information comes with a burden – one that Jeff Enright (Chair) and myself (Vice-Chair) have to bear; besides I would have to step down from my position as Vice-Chair of Region 1 if I disclosed information I took an oath to protect. Believe me when I say there are a lot of decisions made at national for your benefit. You elect members to the board like myself to go and hear the arguments and make the best decisions for the whole organization. The Appraisal Institute is a not-for-profit organization that is governed by a set of bylaws and regulations under the State of Illinois law. We are made up of almost 20,000 appraisers (designated, candidates for designation and practicing affiliates). Our organization is 85 years old and our policies have been modified many times to adapt with the ever changing times.

    Chapters have changed in recent years with many chapters joining together to find better efficiencies. We currently have 80 chapters and as you might imagine, if all 80 chapters acted completely independent of each other and national, there would be chaos let alone a lot of risk to our non-profit status. Over the past few years, policies have changed in hopes to get all chapters to do things equally and report finances to national in the same format so that when our national finances are filed with the IRS it does not create an immense amount of unnecessary work for our national staff to produce reports that accurately present what is going on in the whole organization.

    I’ve heard a number of people lately say things like “national is just trying to take our money”; to that I would respond that national doesn’t need the chapter money and this is just a negative feeling being voiced and is not accurate. I would agree that when the recession hit, that national along with the chapters had to make many changes to how they run their finances to balance their books. And yes the share of dues that was sent back to the chapters was reduced in order to stop the bleeding at national, just in the same ways that we made significant changes at the chapter levels to balance our books. Let’s set aside how we feel about those choices (I am not defending any of them, like you I struggled with many of the choices that were made – for all those of us in leadership this was a difficult time of making hard decisions).

    Now we are several years past the recession and because of many conservative choices at the national level, their budgets are balanced and the appropriate amount of reserves are in place. So this new policy is not a money grab. What it is is a plan to reduce risk to the organization so that we may remain a strong, viable, organization that serves us as a professional group. I’ve given a lot of my time to this organization because I believe it is worthwhile and it’s an honor to be a part of. Trust me there are many times (maybe now?) that I’d rather be playing with my grandchildren and spending my precious time with our aging parents. All that said, in January the national board passed a motion to “suspend” full implementation of this finance policy. So besides the chapters who agreed to be beta testers, the program is on hold.

    We have received numerous letters, mostly written with strong words of how upset everyone is over this policy. We are listening. In fact that is what we are doing right now. The 20 board members plus 4 officers feel a heavy burden by this. A motion was passed that the majority thought was the best course of action for the organization. I think we’ve been shocked at the outrage. Since January is my first official month as a board member, let me tell you it’s been quite a ride! Please know that I work on your behalf, but also on behalf of the organization. We are all on the same team – we are a big team and there are many voices. I’m available to you, so please email me or call me if you’d like to discuss this policy or anything else.

    Mary E Campos, MAI, SRA, AI-GRS, AI-RRS
    Region 1 Vice-Chair
    (Seattle Chapter past president)

    Jonathan Miller
    REIC Forum Moderator

  • #641 Reply

    North Texas Chapter Board of Directors Says Ample Time Was Not Given by AI National To Review Any Proposed Changes to Governance

    Jonathan Miller
    REIC Forum Moderator

    • #665 Reply

      Francois Gregoire

      It’s interesting to read the AI Governance procedures. Although I have attended one or two AI Board of Directors meetings (I am not an AI member), and am aware of their executive sessions, it is a surprise to see the extent and significance of decisions made behind closed doors, with the attendees bound to secrecy.

      Contrast the AI procedure with another not-for-profit organization, the National Association of REALTORS.  As a member of the NAR Board of Directors, I have attended their meetings since 1996. In all that time, there has been but one meeting held in executive session. NAR has over 1.1 million members, Associations in every US State and Territory, and hundreds of local Boards and Associations. The NAR Board of Directors has several hundred members. The annual audit is published in the handout provided to each director.

      By the way, each local Board and Association runs their business. Each State and Territory Association runs their business. There is a three way dues formula under which a local Board/Association collects member dues, and forwards the appropriate amount to the State and National Association. Local Boards/Associations keep their portion. In turn, a local Board/Association must meet minimum service requirements established by NAR policy. NAR has revoked local Board/Association charters when warranted.

      Meetings behind closed doors and voting on issues “for the good of the members” seems to be an odd way to keep members involved and proud of their organization. Just thinking out loud.

      • #680 Reply

        Thanks for sharing Frank. The long time stealth culture of AI National is starting to look like it will be their eventual undoing. Once you stop listening to your members, you no longer represent them.

        Jonathan Miller
        REIC Forum Moderator

  • #639 Reply

    Austin Chapter Board of Directors Says Ample Time Was Not Given by AI National To Review Any Proposed Changes to Governance

    Jonathan Miller
    REIC Forum Moderator

  • #637 Reply

    November 28, 2016 Atlanta Area Chapter Board of Officers & Directors Says Ample Time Was Not Given by AI National To Review Any Proposed Changes to Governance

    Jonathan Miller
    REIC Forum Moderator

  • #635 Reply

    Southern New Jersey Chapter of the Appraisal Institute Provides Feedback to AI National on “Taking” Policy

    The last comment in the 2-page letter of feedback from the chapter sums up the chapter sentiment.

    NO THANK YOU, our chapter can handle our money and our responsibilities in accordance with our chapter and national bylaws.

    Jonathan Miller
    REIC Forum Moderator

  • #633 Reply

    February 5, 2017 Northern California Chapter of the Appraisal Institute Register Unanimous Objection to AI National “Taking” Policy

    Jonathan Miller
    REIC Forum Moderator

  • #631 Reply

    December 19, 2016 Southern California Chapter (SCCAI) Writes Critical Letter of New “Taking” Policy

    We have heard the cries of other members upset with the new policy and we understand why that have had this response.

    Jonathan Miller
    REIC Forum Moderator

  • #629 Reply

    December 20, 2016 Montana Chapter President Writes Region 1 Chair of their disapproval of the AI National Chapter Finance Policy

    This letter was sent from Jennifer L. McGinnis, MAI, President, Montana Chapter of the Appraisal Institute.

    Jonathan Miller
    REIC Forum Moderator

  • #627 Reply

    January 4, 2017: Well Regarded MAI Makes Case for Growing Irrelevance of MAI Designation and Incompetent AI National Leadership

    Andrew J. McRoberts, MAI, CRE, CCIM sent a letter to AI National leadership and opted to let his MAI designation expire on April 4, 2017. See letter below.

    Jonathan Miller
    REIC Forum Moderator

  • #625 Reply

    January 31, 2017: North Texas AI Chapter Recap and Recommendations derived from the January 11, 2017 North Texas Chapter/AI National Meeting in Dallas

    The North Texas Chapter Board of Directors published a letter directed at AI National officials that attended the meeting to suspend the controversial “taking” policy implemented without warning just after Thanksgiving 2016 that resulted in widespread membership outrage.

    This letter lays out the Chicago execs points, member concerns, and questions as well as chapter recommendations (attached).

    FYI This is the meeting where AI National president Jim Amorin referred to me several times as that “New York blogger” and that he didn’t appreciate the airing of their internal affairs. I talked about this a while back here on REIC so I won’t delve again into the irony and his lack of understanding of why he was there.

    Jonathan Miller
    REIC Forum Moderator

  • #621 Reply

    Open Letter to the Appraisal Institute Board of Directors and Members, Candidates and Practicing Affiliates of the Appraisal Institute

    From Joe Mags, Appraisal Institute President 2011 – written in late 2016 (don’t have date).

    Jonathan Miller
    REIC Forum Moderator

  • #568 Reply

    Banks Make Regulations Onerous By Over-Interpreting Them – AI National Used This To Promote A Self-Serving Narrative

    Appraisers get blamed for a lot of things that they have nothing to do with. So do regulations. Last fall, AI National testified in front of Congress that over-regulation was the cause of the appraiser shortage which is absolutely false and misleading. Their stance is also detrimental to the profession and membership can not understand their policy direction since it is not outwardly discussed.

    I address this concept (not AI National’s actions) over at my Matrix blog: Banks Make Regulations Onerous By Over-Interpreting Them

    Jonathan Miller
    REIC Forum Moderator

  • #561 Reply

    REVAA Fighting Oregon Appraisal Management Bill That Forces Payment in 45 Days

    House Bill 2501 addresses business practices of AMCs and their interaction with appraisers. Because REVAA was not involved in the drafting of the bill, they are against it but expressed a willingness to work with all the stakeholders.

    Incidentally, the Executive Director of REVAA in the letter thought that the AVM acronym stands for “Alternative Valuation Methods” when in fact it stands for “Automated Valuation Models.” AVMs are an alternative valuation method  used to estimate the value of a home. Zillow’s “Zestimate” is perhaps the best known public facing AVM and has a reputation for inaccuracy.

    The latest Zestimate accuracy measurement (December 31, 2016):

    50% within 5% of sales price
    72.7% within 10% of sales price
    87.7% within 20% of sales price

    Here’s the answer to the question “Is a Zestimate an appraisal?” –

    No. The Zestimate is not an appraisal and you won’t be able to use it in place of an appraisal, though you can certainly share it with real estate professionals. It is a computer-generated estimate of the worth of a house today, given the available data. Zillow does not offer the Zestimate as the basis of any specific real-estate-related financial transaction. Our data sources may be incomplete or incorrect; also, we have not physically inspected a specific home. Remember, the Zestimate is a starting point and does not consider all the market intricacies that can determine the actual price a house will sell for.

    AVMs are being pushed by AMCs to displace appraisers despite their low accuracy rates.

    Oregon House Bill 2501

    live link
    pdf version to download

    Jonathan Miller
    REIC Forum Moderator

  • #556 Reply

    AI National’s Presentation on Alternative Valuation Standards to Montana Board of Real Estate Appraisers

    I have provided a link to 12/9/2015 minutes of the Montana Board meeting at the bottom of the post. Their meetings transcripts are audio recorded. Here is the outline. This was a fact-finding hearing on whether there is a need for alternative appraisal standards in Montana. The board had invited the AI National and the Foundation to speak on the issue of alternative valuation standards at a public hearing.

    – Scott DiBiasio and Darwin Ernst presented on behalf of The Appraisal Institute
    – Maggie Hambleton presented on behalf of The Appraisal Foundation

    This was a six-hour meeting, but the AI National and TAF presentation segment began at around the 3-minute mark. I listened to the entire section of the meeting on this topic and I encourage you to do so as well.

    At the risk of coming across as biased, I was surprised at the naive logic presented by AI National to identify alternative standards as a problem that is holding appraisers back. AI National seems hell-bent on enabling appraisers to switch on and off the standards they follow to get a $25 evaluation assignment. This does not protect the public trust, yet they continue to aggressively pursue this agenda across the U.S. No one I know in the industry understands the logic adopted by AI National’s inner circle.

    Scott told an incredulous board that AI didn’t need to go through them and could bypass and go directly to the legislature. In a previous post on REIC, I shared how AI National intentionally bypassed everyone in Montana and went to the governor, lecturing him on what he can and can not do. I’m not sure how directly insulting the governor and the state appraisal regulatory board would be effective since legislators use the board to understand the proposed legislation. In an additional insult, AI National completely skipped over the AI Montana Board. To date, AI National admitted they have not yet had a single state accept their argument for alternative valuation standards. It looks like they did succeed in alienating the state of Montana at this point. Only 49 more states and 5 other entities to go.

    On the other hand, the presentation by Maggie Hambleton of TAF was impressive, and more importantly, it was consistent with front line appraiser reality and easy to understand. She spoke for Dave Bunton who was ill.

    I know this sounds like a potential dry listen, but I encourage all my readers to hear at least the first hour of the audio. I found it riveting. It is a civics lesson on the appraisal profession. It gives you a sense of how disconnected AI National is from the needs of their membership – especially residential. Some of the comments by Scott are cringe-worthy.

    Download the meeting outline.

    To listen to the audio click here and then scroll to December 9, 2015 and select “Minutes” in the Full Board meeting record for that date. The audio will play automatically.

    Jonathan Miller
    REIC Forum Moderator

  • #546 Reply

    Fannie Mae Guidelines Policy Allows Trainees To Inspect The Property Without Their Supervisory Appraiser

    One of the biggest issues today is the lack of mentoring by experienced appraisers because it is not financially feasible under current lending practice. Both banks and AMCs – who act as a bank’s agent – generally do not allow trainees to inspect a property without a licensed or certified appraiser alongside. So in an era where AMCs control as much as 90% of mortgage appraisal work, the lenders are requiring AMCs to require something the GSEs (that buy their mortgage paper) do not require. This risk aversion is residual from housing bubble collapse. Mortgage lenders today, subjected to low rates and a very narrow rate spread, remain irrationally averse to risk.

    However, their underwriting risk management is effectively destroying the future quality of appraisals being done on their collateral because the new wave of appraisers is essentially only book-smart without real world context. Experienced appraisers can not afford to invest the time to inspect the property with the trainee for the multi-year experience period before the appraiser is certified after already taking a 30% to 50% overnight pay cut.

    From the Fannie Mae Seller’s Guide Update – 2017-01 page 2.

    Jonathan Miller
    REIC Forum Moderator

  • #535 Reply

    Is It Time For National AMCs to Panic? The Final Rule Deadline of April 15, 2018, Approaches

    An appraiser I know shared the following with me. I’ve been hearing similar scenarios described by other appraisers around the U.S.

    I don’t know if you are aware, but Forsythe, Streetlinks and several other AMC’s are now out there trying to hire appraisers as staff. Apparently, I am told they can get around the AMC rules by having staff. Not sure if that is true or not. I called a company back that asked me to become a staff member. I never could get out them the compensation package. She told me that I would make a lot of money and not have to worry about clients…

    Yes, it is true.

    I have long wondered why AMCs worked so hard to fight registration at the state level. I have been told that REVAA – the AMC trade group – is trying very hard to get AMCs registered in Illinois. I’ve talked to some people about this issue, and their assumption has been that the AMC industry missed the fine print in the Final Rule of April 21, 2015.

    Here is an explanation from NAR on the Final Rule.

    On April 21, 2015, six federal agencies released a joint final rule on minimum requirements for appraisal management companies (AMCs). NAR supports the agencies’ efforts to guide states in registering and supervising AMCs. NAR commented on aspects of the proposed rule and provided recommendations for calculating appraiser panel membership for registration purposes, how to distinguish between an AMC and appraisal firm, and how the Appraisal Subcommittee could implement standards if a state chooses not to participate. The final rule is largely the same as the proposed rule with a few modifications. The final rule becomes effective 60 days from the date of publication in the federal register.

    Here is why this date so critical to the AMC industry. The following was taken from the Final Rule document.

    Section 1124 does not compel a State to establish an AMC registration and supervision program, nor is a penalty imposed on a State that does not establish a regulatory structure for AMCs within 36 months of issuance of this final rule. However, in a State that has not adopted the AMC minimum requirements established by this rule, AMCs are barred by section 1124 from providing appraisal management services for Federally related transactions, unless they are owned and controlled by a Federally regulated depository institution. Thus, appraisal management services may still be provided for Federally related transactions in non-participating States

    But hiring staff appraisers may not resolve their exposure if the state doesn’t establish AMC registration…

    the Agencies believe that the fundamental reasons to distinguish between AMCs and appraisal firms are that the business models of AMCs and appraisal firms are different and that Congress expressed an intention to exclude entities operating on an appraisal firm model from coverage by the AMC minimum requirements. This conclusion is consistent with the fact that AMCs provide appraisal management services to third parties, including retaining appraisers to perform appraisals, but AMCs do not perform appraisals. By contrast, appraisal firms perform appraisals using one or more of the firm’s employees or partners. In addition, appraisal firms typically hire a limited number of appraisers, based on identified need, and hire inexperienced trainees and train them to become qualified appraisers. AMCs, on the other hand, generally have a large number of pre-approved appraisers in their network or panel who are available, as independent contractors, for potential assignments and do not conduct training for inexperienced appraisers.

    It is clear that the mortgage appraisal world is entering a unique moment in time.

    Jonathan Miller
    REIC Forum Moderator

  • #531 Reply

    There is no appraiser shortage, only a shortage of appraisers willing to work for 50% to 60% of the appraisal fee paid by the consumer.

    When I saw the flyer for the HousingWire webinar I was outraged and sent a letter to editor Jacoby Gaffney – he did not respond. I assume this webinar was paid for or part of an advertising promotion by the attendees in some way. As much as I have enjoyed HousingWire, it and other national appraisal publication coverage of the appraisal profession is generally skewed to the big institutions like AMCs, big banks and Fannie Mae because individual appraisers don’t have advertising dollars.

    And to make matters worse, the webinar registration form didn’t have “appraisers” as a category.

    Under-representation has been the story of the appraisal industry for decades. Unfortunately, our biggest trade group, AI National, has exacerbated this void by not providing relevant action on appraisers’ behalf.

    What torqued me about the marketing for the Webinar is the use of come-ons like the following which is blatantly one-sided to AMCs:

    Is this something that will help address the appraiser shortage, get fees back in line and get new blood into the appraisal industry? Or will it open the flood gates to poor valuations throughout real estate sales?

    I listened to the webinar and learned some things from FNMA and appraiser Matt Simmons. The AMC speakers spoke in circles.

    Appraiser Matt Simmons of Maxwell Hendry Simmons of Florida – a former state regulator – presented the following slides during the HousingWire webinar. Using data rather than hearsay, these charts clearly demonstrate that there is no shortage of appraisers. Also, remember that AI National misled congress during their testimony last fall by blaming too much regulation as the cause for the appraisal shortage. In the following charts, you can see how wrong their representation is.

    The number of appraisal credentials is much higher now than during the years immediately preceding the housing bubble.

    The number of certified residential appraisers is generally more than double the years immediately preceding the housing bubble.

    Trainee licensing in Florida has collapsed, largely because banks’ risk management process is broken. AMCs are doing what the lenders say and the lenders are not allowing trainees to inspect properties even though Fannie Mae allows it – the recent clarification from Fannie Mae drove the point home. In other words, the buyer of mortgages are fine with trainee inspections but the banks didn’t get the memo. This is one of the factors causing the industry to not see enough new entrants into the profession. AMCs are taking a large chunk of what the consumer pays for the appraisal and therefore reduced the financial ability of mentoring. Appraisers making 60% of what they used to can’t join the trainee for the inspection for 2 or more years.

    Jonathan Miller
    REIC Forum Moderator

  • #523 Reply

    A Request to AI National: Do the Appraisal Career Math

    Here’s what a residential appraiser just shared with me – he looked at the cost of getting into the appraisal profession. This was weighed against a client request to do heavy evaluation volume at $25 a pop and they only take an hour ($25/hour)!

    By the way, evaluations are being heavily promoted by AI National as a reason to have alternative valuation standards – an appraiser can simply turn on and off the valuation standards they need to follow – to be able to do these $25 assignments.

    Consider that you pay to get into the profession:

    4 years in college – estimated cost $100,000 or more.
    3 years of appraisal training – 300 hours of education – $7,500

    You have spent enough time and money to obtain a JD in law or a Ph.D. and your end game is $25 per hour. Nice recruiting tool for future appraiser candidates.

    The above response was inspired from the AMC email presented below…

    Subject: New Report!


    [REDACTED] is offering a desktop review opportunity in the coming weeks. This product is a [REDACTED] ([REDACTED] – Single Market Valuation) which is a review of a BPO and public records data provided to you in the form of a Value Range AVM from Collateral Analytics. We attached a sample of the HTML form you will be filling out with no signature scope required. These reviews are a due diligence report for securitization purpose and will not be used for lending purposes.

    A [REDACTED] is a quick desktop review that pays $25 and on average takes less than an hour to complete. We will have multiple reports statewide available in this batch.

    We will be receiving a large number of these reports in the coming weeks so if you have interest in this product, please let us know!

    Thank you!

    Jonathan Miller
    REIC Forum Moderator

  • #522 Reply

    AI National Explores Thinking About Its Residential Members Again

    Consistent with the disconnect from the residential appraisal world, AI National’s President Jim Amorin recently launched a committee to revisit their neglect of residential members as well as the nearly faded SRA designation – the committee includes a non-appraiser BTW. Consistent with AI National’s long time stealth culture, I suspect the membership won’t hear anything from this committee for a long time, if ever. The gesture was likely made to soothe the savage beast (membership) after the “taking” debacle.

    In fairness, I could be wrong and AI National will aggressively seek to bring residential into the fold right away. And by the way, does AI National need a committee to tell them that they have ignored their residential membership for years? The fact that they need a committee infers that they remain in a silo.

    Jonathan Miller
    REIC Forum Moderator

  • #520 Reply

    Letter to the North Carolina Appraisal Board in response to AI National introducing legislation on Capitol Hill to eliminate the ASC and TAF

    AI National continues to work hard against its own membership by trying to eliminate a well-functioning federal standards organization so they can replace it with themselves. Attached is a letter from Lynn Dahnke 2017 President, North Carolina Real Estate Appraiser Association to Chairman Charles L. McGill of the North Carolina Appraisal Board.

    While the letter never mentions AI National, they cite AI National’s strong-arm tactics in Montana covered in earlier replies on this site.

    See attached.

    Jonathan Miller
    REIC Forum Moderator

  • #518 Reply

    North Carolina Real Estate Appraiser Association (NCREAA) Letter to Congress

    This is a letter to Chairman Duffy of the US House Financial Services Subcommittee on Housing & Insurance by 2017 president Lynn Dahnke and 2016 president Peter Gallo of NCREAA.

    The other state coalitions should also be writing similar letters if they haven’t already. If any have, please share them with me to place on this site for all to see.

    See attached.

    Jonathan Miller
    REIC Forum Moderator

  • #513 Reply

    Alternative Valuation Standards Proposed in an AMC update bill in Florida

    Over the past few years, there has been a lot of talk about AI National lobbying in states like Florida, Texas, California, Illinois and others to offer alternative valuation standards. Based on the audio of a public hearing in Montana which I’ll post soon, it was clear that AI National has been trying to insert this type of language into legislation across the U.S. Although I haven’t yet confirmed whether AI National was involved in this modification in Florida, the alternative standards concept is consistent with their messaging and I am not aware of another entity that is promoting alternative valuation standards at this time.

    The Florida legislation was supposed to be a simple AMC update. Whoever did this successfully got a hold of a Florida legislator and inserted this language into the bill.

    Promoting alternative valuation standards defy common sense because they hurt all appraisers. They provide confusion that currently does not exist to users of appraisal services and neuter oversight. This is why we call a standard, STANDARD or a law, LAW, or a rule, RULE. Such a proposal will severely complicate, if not eliminate regulatory enforcement because the regulators will be faced with individuals and institutions who cherry pick the standards that they want, or use the multiple choices to shield themselves from the liability of wrongdoing.

    Imagine 90+ valuation groups negotiating with each of the 55 states and territories?  Chaos.  Yet AI National is promoting this action so they can provide their standards as a replacement yet their standards aren’t very different.  This is a self-serving action by an obsolete organization on the decline.

    Alternative valuation standards are an unmitigated disaster for the appraisal industry and would destroy the public trust.

    Jonathan Miller
    REIC Forum Moderator

  • #483 Reply

    Appraisal Institute Membership Has Declined More Than 35% Since 2007

    At the current trend, a 50% further membership reduction would occur within nine years.

    In all the information being sent to me by AI members over the past several months and within my research, I noticed a pattern of significant decline in membership. Now, this is nothing new to most of you, but I’m not sure how much many members realize how quickly the numbers are dropping. Using AI National’s published information including annual reports, press releases and notices on their website, I cobbled together a decade of total membership numbers. You can see the 35.5% drop illustrated clearly below.

    The above chart shows a clear linear pattern. If the same trend continues to occur – I anticipate a faster rate of decline in the coming years – it will take 9 years to fall another 50%. This drop is not unrealistic since AI National has worked hard to keep the status quo which is probably the reason their stealth culture has remained firmly in place.

    I don’t know what the membership threshold needs to be before the AI National organization collapses – since institutional transparency has not been demonstrated during the “taking” debacle – but I’d characterize the membership decline as an organizational crisis. This future collapse needs to be addressed immediately and differently.

    After reading most of AI National annual reports since 2010, it is clear that leadership has primarily focused on recruiting. For every big jump in designations that are realized in a given year, the following year sees a net membership loss as the rate of aging or disaffected members more than offsets new designations. Their math isn’t working.

    I suspect top leadership is fully aware of this trend but doesn’t know how to reverse it, so they continue to ignore it, blaming the decline on forces beyond their control. To make matters worse, they have pulled back into their silo and have lost touch with their membership’s needs and mindset (consider the recent “taking” debacle.)

    Upon reflection, this could explain leadership’s irrational behavior of late – perhaps panic. The manhandling of membership through the “taking” debacle to fully control chapter cash or pushing things that are detrimental to their members best interest. These include AMCs, promoting the false narrative of an appraisal shortage and pushing hard to get rid of The Appraisal Foundation to swoop in and save everyone with their set of standards.

    What’s quite amazing about this situation is that back in 2006, AI National correctly forecast a 25% to 35% decline in appraiser population. However, I doubt they thought it would be reflective of their own membership. The text of an AI National press release was presented in Appraisal Today.

    The Appraisal Institute has analyzed the Appraisal Subcommittee National Registry data since 2006 using a consistent methodology, and the long-term trend is clear:
    · The number of appraisers continues to decrease at a rate of about 3 percent per year;
    · The appraiser population could decrease 25 to 35 percent over the next 10 years due to age attrition and fewer new entrants.
    “In spite of a higher level of appraiser qualification overall, the lack of career prospects for trainees and few new people entering the profession are legitimate and serious issues, yet opportunities do exist to reach the next generation and employment options will, in fact, likely be enhanced in the coming years,” said Appraisal Institute President Richard L. Borges II, MAI, SRA.

    Let’s hope AI National wakes up soon – I suspect it may be too late.

    Jonathan Miller
    REIC Forum Moderator

  • #478 Reply

    Today, AI National President Jim Amorin sent an email to all AI membership. It was a general housekeeping letter of upcoming conferences, classes, etc. However, there was an unexpected topic that was slipped into the bottom of the note (on a Friday). It was a brief paragraph that explained AI National’s compensation in the FNC deal after the CoreLogic acquisition of FNC in December 2015.

    Here’s the noteworthy paragraph from Jim (green highlights indicate patronizing tone):

    Appraisal Institute Receives Payment from FNC

    Nearly two decades ago, the Appraisal Institute Board of Directors identified external issues that affected residential appraisers, issues such as changes in technology, standardization of data formats, and development of real estate databases, that still impact residential appraisers today. One of the Board’s responses at that time was the creation of an appraisers’ database that could benefit appraisers. To address that issue, the Appraisal Institute entered into a joint venture with FNC to create the Appraisal Institute Residential Database.

    In 2002 the Appraisal Institute Board of Directors agreed to terminate the joint venture, sell its 30 percent interest to FNC (which held the other 70 percent interest in the venture,) and enter into a stock option agreement to purchase 15,000 shares of FNC stock at $0.01 a share in the event that FNC someday went public, was sold or was merged into another entity.

    Following CoreLogic’s purchase of FNC, the Appraisal Institute received approximately $525,000 by the end of 2016 for its options. This amount represented a net return of $375,000, as well as recouping the original investment of $150,000 in cash plus the value of in-kind services from nearly 20 years ago in an attempt to establish the Appraisal Institute Residential Database.

    Additional background about this matter will be posted in the AI Professionals section of the AI website.



    AI National felt the need to mention the time frame two times,  that this agreement was established nearly 20 years ago. I’d like to point out that the CoreLogic purchase of FNC occurred 14 months ago.  It took 14 months to share what looks to be innocuous financial information from its furious dues paying members who demanded this information for years – before the CoreLogic-FNC transaction.

    As I like to say to my colleagues, sellers, buyers and bank reviewers:

    “one sale doesn’t make a market”

    …or as they teach reporters in journalism school:

    “it takes three data points to make a trend.”

    This is one data point.

    Some of the feedback from angry at AI National members about the act of disclosure and contents thereof (I withheld the feedback that wasn’t suitable for sharing – after all, this is a family website!):

    – Shamed them into it. Yup, pennies on the dollar…..
    – I truly wonder which executives at AI also cashed in on the $475M…
    – this was done in response to “some other appraiser’s” disclosure of their non-disclosure.
    – That’s no return at all – a terrible business move.

    My initial reaction was that at least it was a step towards the light – if we can believe this information as factual. Because of the poisonous and arrogant relationship with the membership that they have fostered and fed on for years, no trust remains. Members want to look at this gesture as a hopeful sign, but at this point, it is too late for most members to see this disclosure objectively. It will take dozens of these types of communications before AI National gets well down the road to redemption with their membership.

    Next burning topic.

    Dear Jim – consider the following for your next email communication with AI membership – a statement on this:

    The “taking policy” that started the unprecedented widespread chapter/membership backlash on December 6, 2016, is still going to happen without modification on January 1, 2018.

    Jonathan Miller
    REIC Forum Moderator

  • #474 Reply

    The following link and comments were sent to me from an SRA appraiser I don’t know. While we are all aware of the free and informative webinar given in January, I thought the comments provided by this appraiser were worth including here on REIC.

    On 1/18/2017 the Network of State Appraisal Organizations had a webinar with over 800 people on the call. The webinar speakers were Jim Park for ASC and David Bunton from TAF. At the 33 minute 35-second mark, they speak about AI [National]. At one point David stated, “ironically the biggest threat for residential appraising is coming from an appraisal organization.” He was referring to AI [National] being the threat. Jim complements AI members but is critical of AI leadership.

    Jonathan Miller
    REIC Forum Moderator

  • #472 Reply

    Illinois State Senator Introduces Bill to Repeal the Appraisal Management Company Registration Act

    Bill Synopsis As Introduced

    Repeals the Appraisal Management Company Registration Act. Makes conforming changes in the Real Estate Appraiser Licensing Act of 2002. In the Real Estate Appraiser Licensing Act of 2002, removes a provision requiring written disclosure to a borrower or loan applicant of the total compensation to the appraiser or appraisal firm when an appraisal obtained through an appraisal management company is used for loan purposes. Effective immediately.

    Jonathan Miller
    REIC Forum Moderator

  • #471 Reply

    Appraiserblogs Discusses the Appraisal Institute’s Opportunist Effort to Eliminate the Appraisal Subcommittee

    Over at Appraisersblogs: AI’s Effort to Eliminate the ASC!

    It’s now much more than rumor. What started as a partisan effort to lay ground work for the eventual elimination of Dodd-Frank has quickly morphed into a behind the scenes opportunistic all out push to eliminate the ASC too!

    Read on.

    Jonathan Miller
    REIC Forum Moderator

  • #464 Reply

    AI National is moving forward with their suspended “taking” policy!

    This observation was sent to me today from a high ranking long time AI member:

    AI has turned on many of its members just because they disagree with their new policy. They have turned to threats towards their members in ways that are just totally unbelievable, such as accusing them of defacing AI and hurting the brand. If anyone is damaging the brand – it is the executive committee. There does not appear to be anything to stop them.

    I believe that [withholding dues] is the only way they will hear us. The bottom line is they are not considering any changes to the [“taking”] policy, not accepting any of our suggestions like an “opt-in” or “opt-out” position for those chapters who do not need AI’s help. So why in the hell did they ask for our input? – Just for show! They are continuing to beta-test with those chapters that agreed to it. They are not suspending the [“taking”] policy – they are moving forward!

    This message is consistent with what an AI chapter board president in another part of the country told me a few weeks ago. That comment was previously posted on REIC. AI National actions make me wonder why a current AI member would pay their dues until they get answers and real change. Right now member dues are furthering the agenda of a senior executive team without any accountability that has gone “rogue” and has repeatedly demonstrated that they don’t have their members best interests in mind.

    With all this chaos, I wonder if 2017 will be the last year of a functioning Appraisal Institute?

    Jonathan Miller
    REIC Forum Moderator

  • #463 Reply

    Voice of Appraisal: The Montana State Board of Real Estate Appraisers Successfully Fights Back AI National’s Political Assault

    One of the great things about working for transparency within our industry is that you get to meet a lot of good people. I stumbled across Pete Fontana, an appraiser in Montana and a tireless protector of the public trust. He is the Vice Chairman of the Montana State Board of Real Estate Appraisers and has a clear understanding of how the appraisal regulatory process works and the relationship between federal and state responsibilities.

    I’ve been to Montana a couple of times in my life but only because of bicycling – but that’s another topic.

    In his interview on Phil Crawford’s Voice of Appraisal this morning, Pete talks about how AI National’s President Jim Amorin sent a letter to the Montana board and to the Montana Governor, telling them (incorrectly) what they were allowed to do while at the same time stepping on the AI Montana Board by having no contact or providing no notice.  I’ve covered all this in recent posts.  Pete makes it clear that he is not against the AI itself but he is very much against the false narrative they push and the damage they have caused to their own members and the industry in general. A recurring theme in this interview is “why is AI doing this?” We can only speculate that AI is focused on getting rid of the current regulations to insert their own to make themselves relevant and financially viable in the future.  To do this they seem to believe that they have to mislead their members and the public. Pete makes the point that adding additional layers of standards creates untenable confusion for the industry especially since regulations are not the problem.

    Check out the interview.

    Jonathan Miller
    REIC Forum Moderator

  • #458 Reply

    Dave Biggers of a la mode software addresses the false narrative of an appraisal shortage pushed by AI National and AMCs.

    Twenty something years ago I stumbled into Dave Biggers, founder of a la mode appraisal software, from afar. He was in the trenches on appraisal bulletin boards, answering questions and pontificating about the challenges facing the appraisal industry. He was a tireless participant in these circles and I’m sure the feedback served him well in his software development.

    We crossed paths several times since then. The most recent was when our appraisal firm admitted to ourselves that we weren’t a software company. We had just abandoned our efforts to develop and maintain our own custom software after 20 years of building our own to run our business. It was economic. Technology changed more quickly than we could afford to keep up with. Our firm investigated all the appraisal software options out there and we went with a la mode. That was nearly a decade ago and we don’t regret the decision. About five years ago, a la mode approached me to be part of their marketing effort and I did it (for free) because I believed in the product. I ended up on their home page and in thousands of appraiser’s mailboxes – how cool is that?

    Recently he and I were trading emails about the false narrative being pushed by AI National and the AMC industry concerning the shortage of appraisers. AI National told Congress last fall that the shortage was caused by too much regulation. This is clearly false and reflects the disconnect with their own residential membership. Just ask their residential members what is causing the shortage! AMC’s have made a concerted effort to exploit this untruth and AI National has readily perpetuated it, likely to further their appraisal standards over TAF in an anti-regulatory administration, no matter the harm it causes their own residential members.

    I’ve been addressing this “appraisal shortage myth” by describing it like this:

    There is no appraisal shortage – there is only a shortage of appraisers willing to work for as little as half the market rate. Why can’t appraisers – who measure supply and demand for a living – participate in the free market economy like AMCs do?

    Dave described the false appraisal shortage narrative like this (I’m clearly stealing his better version of my own lawyer analogy.)

    I have the data to prove there is no shortage — at any given time, our data shows that about 26% of appraisers are “sitting out” daily and weekly appraisal assignments. They come back in to the active pool later, within days, and they’re not part-timers. They simply aren’t willing to do the current scope of work for the current going rate, and nobody should blame them. The way I always put it is simple: There’s not a shortage of appraisers. There’s a shortage of appraisers willing to do AMC work at AMC fees. AMCs are simply not willing to pay the rate demanded to get rapid service. They are the bottom of the pile. And at the bottom, it of course feels like a shortage. If I went looking for $50 an hour lawyers, I’d claim there was a lawyer shortage too.

    We live in interesting times.

    Yes, we sure do.

    Jonathan Miller
    REIC Forum Moderator

  • #452 Reply

    Burning Question: Will AI National Ever Talk to its Members About What Transpired with FNC?

    Last October I attended the ASB public meeting in Washington, D.C. The next day I took Amtrak back to NYC and somewhere around Baltimore, some passengers got off the train, and the adjacent seat was now empty. A few minutes later, as new passengers were making their way through the train, a gentleman sat next to me. He and I looked at each other and did a double take. He said “Jonathan Miller?” I said “Bill Rayburn?” What an incredible coincidence!

    Bill is a founder of FNC and a controversial character in the appraisal industry. I had run into him a decade or more ago when his firm was interested in running analytics on Manhattan co-op apartments. At that time, co-op sales were not a matter of public record (and we don’t have an MLS either), and my firm had amassed the largest collection of co-op sales in existence used for our appraisal practice. Co-ops are about 75% of our owned housing stock. I had several research positions in our firm calling around for the raw data all day long and then piecing it together with other information we had such as “schedule a’s” (share allocations), floorplans, offering plans, financial statements as well as information collected during appraisals. Many of FNC’s clients were headquartered in Manhattan; therefore, this was of interest to FNC. I got to know the COO Bob Dorsey – when he was developing his hedonic price index – and other executives. One of their executives was and is a friend of mine. But that was about it businesswide. I never pushed the concept, and they lost interest. They built their web portal known as AppraisalPort, and they effectively became the communications tool and toll collector for the interactions between lenders and appraisers. Fast forward to 2015, he and his partners sold FNC to CoreLogic in December 2015 for $475 million and moved on to other things.

    According to CoreLogic, FNC platforms provide “broad connectivity” to approximately 80,000 appraisal, title and inspection vendors, and FNC’s solutions allow industry participants to automate the collateral valuation and diligence process, monitor and optimize vendor performance and facilitate compliance with regulatory and internal risk management policies.

    In the early days, FNC needed a data source to run their analytics for banks behind the scenes – the public record wasn’t granular enough. From my vantage point, I always assumed that the FNC backroom business was their real value proposition to lenders so I assumed mining appraisal data was always of critical interest. The Appraisal Institute worked with them to develop or they simply agreed to license their name on a standard called “AI Ready.” This specification was marketed as a value add to software providers. In the AI-Ready FAQ under the section “How does AI Ready(tm) Help Keep Your Appraisals Secure?” I thought this paragraph was particularly interesting:

    Does AppraisalPort keep a copy of your appraisal after you send it? As part of keeping your appraisals secure, AppraisalPort keeps a copy of the appraisal long enough to assure that it was actually delivered to and properly received by the client (we all know that computers are not perfect). After the audit period, it is deleted. It is never shared with anyone. No data is stripped out, separated or used for any other purpose.

    A lawsuit filed by appraiser Pat Turner and others claimed that it was a way to farm their appraisal data despite being told AppraisalPort was secure and private. The defendents responded and the case was eventually settled.

    Here are a few excerpts from Ken Harney’s 2007 article on the FNC lawsuit in the Washington Post: Reprisals on Appraisals

    The suit was filed last month by appraisers in Maryland, Virginia and Oklahoma against FNC of Oxford, Miss. FNC markets a high-tech system that converts traditional appraisals into electronic formats, then sends them to mortgage lender customers. FNC says it processes about 400,000 appraisals a month and deals primarily with the 45 to 50 largest mortgage lenders in the country.

    and the big one…

    The suit quotes Bill Rayburn, FNC’s chief executive, as telling an industry publication, “When an appraisal is transmitted to the lender, we are able to pop it open and suck all the data out.”

    I’m confused.

    CoreLogic may have found another route to collecting hedonics by providing software to many MLS systems to that use it to manage their data. However, FNC clearly remained very attractive to CoreLogic evidenced by the 2015 sale.

    To my knowledge and what has been told to me for years, is that AI National has never shared the terms of their arrangement with FNC to their membership. This topic is a sore point among many members I know. I find it amazing that AI National had branded a technical standard with a private firm and was given future compensation potential by a firm that was just purchased for nearly a half billion dollars and remains silent. There has been no discussion with the membership I or anyone I know in the membership is aware of. The repeated refrain from the top executives of AI National continues to be “I don’t know anything about that.” So much for establishing trust with membership.

    My good friend Tom Allen, a widely-respected appraiser from Oklahoma and one of the most decent, upstanding men I have had the pleasure of knowing, got a threatening letter in 2004 from an attorney representing AI National for some comments he had made about AI National. Tom was told to apologize in the letter as if he was a two-year-old, but consistent with the bullying culture of AI National. I previously posted it in this forum but have included it again because it provided the terms of the AI National/FNC deal. Here is the letter in all its glory.

    In a questionable display of legal prowess, AI’s lawyer provided the conditions of the AI/FNC contract to give himself credibility in his rationale to Tom for threatening him.

    Now with the mega sale of FNC, AI National is in an awkward position. It’s a game I call “stupid or liar.” AI National either looks like:

    – they have poor business acumen if they opted to take an early buyout; or

    – they need to tell their members where the money is.

    Either way, AI National hasn’t told their members anything.

    UPDATE This FNC-CoreLogic sale link was just shared with me. I wonder if any of the 45 millionaires created by the FNC purchase were connected with AI?

    UPDATE2 Apparently there is an AI Ready website. The “PARTICIPATING AIREADY SOFTWARE VENDORS” section indicates the site has been kept updated. The “about” section shows how AI Ready was a branding vehicle for FNC to move data into a universal format:

    Before AI Ready™, which uses FNC’s Open Appraisal Document Interface (OADI) technology, industry consensus on a standard for appraisal transmission was non-existent. The OADI was designed as an interface specification for the transfer of proprietary appraisal data formats into the open AI XML standard and vice versa. The interface provides appraisal document software companies a common application programming interface (API) for translation of their data into the standard format.

    Update3 AppraisalPort – the appraisal web portal of many mortgage lenders to communicate with appraisers, was built by FNC and displays the AI Ready brand on their home page suggesting there is a continued relationship between the firms.

    Jonathan Miller
    REIC Forum Moderator

  • #442 Reply

    The Montana Board of Real Estate Appraisers Gave The 55 other Jurisdictions Important Information on AI Nationals Actions

    Here is the Montana email that went out to all 55 state boards and commissions regarding the congressional testimony offered on November 16, 2016. The governor’s office approved the letter (the same governor AI National tried to school on what his job responsibilities were). I have also included 4 attachments:

    – November 10, 2016 Memorandum sent to Members of the Committee on Financial Services
    – February 9, 2017 “RE: Response to Hearing held 11/16/2016 ‐ “Modernizing Appraisals: A Regulatory Review and the “Future of the Industry”
    – November 16, 2016 Testimony of David S. Bunton, President The Appraisal Foundation
    – November 16, 2016 Statement of Executive Director James R. Park, Appraisal Subcommittee

    There are additional documents that I uploaded in the reply below – this forum limits uploads to 4 documents.


    Sent: Tuesday, February 14, 2017 8:44 AM
    Subject: Letter to all State Boards and Commissions

    State Regulatory Boards and Commissions:

    As most are aware there was a congressional hearing on November 16, 2016, titled “Modernizing Appraisals: A Regulatory Review and the Future of the Industry”! Many jurisdictions were not made aware of this hearing and some of the content and testimony was alarming and damning to our job as regulators and industry members. The Montana Board held a special board meeting on 01/26/2017 to discuss this hearing and our Boards submission of this topic to the ARRO committee that develops agenda items. A similar panel discussion will take place at the spring AARO conference in Tampa so all jurisdictions can have the opportunity to ask questions and better understand this topic.

    The Montana Board unanimously passed a motion to send a response to the Congressional Subcommittee on Housing and Insurance in response to some of the misleading testimony that was provided at this hearing. The Appraisal Institute, in an attempt to silence the voice of our independent citizen board, sent a letter to our board objecting to us even having this on our agenda for discussion. The AI was allowed to speak during the public portion of the meeting and expressed their objection on the record. We proceeded with the meeting as noticed and discussed the two agenda items and eventually passed a unanimous motion to approve the chair draft a letter to Congress stating our thoughts and position about the current state of the regulatory process. Several days later the AI took a bold step and drafted a letter to the Governor of the State of Montana objecting to our motion and attempting to influence and obstruct our boards right to comment on issues that would directly affect our licensees and more importantly issues that would affect the public trust in our board. The letter from the AI attempts to tell the Governor what his responsibilities are in allowing our Board to send such a letter to Congress. The Governor’s Office reviewed the letter (attached) and approved its distribution to Congress and the 55 jurisdictions under the oversight of the ASC.

    We are providing you folks with the information relating to this topic. We encourage your board to read the Montana Boards letter to Congress and consider sending a similar message to the Congressional Subcommittee as well as your state or district members of the United States House and Senate.

    As we point out in the letter, we may not always like the results of the audits from the ASC, they serve a purpose to ensure everyone is following and applying state and federal statutes and rules accordingly. Furthermore, we cannot digress from the guidance of the Appraisal Foundation when it comes to a consistent approach to licensure so all jurisdictions can be confident that each candidate for licensure has met the same criteria with respect to education, experience hours and a standardized test. Or, the consistent adoption of one set of standards and rules so ALL appraisers and regulators know what the minimum expectations are in the development and reporting of assignment results in an independent and fair manner. The AI testified that our industry is “being choked by rules and regulations in nearly every facet of their business. From how an appraiser reports an appraisal, to supervising trainees, to uneven licensing requirements, to licensing and registration fees passed down by clients, to mandates from federal agencies – appraisers’ professional lives have become extremely complicated, more expensive and less productive due to dated and archaic regulatory structure. As a result, consumers suffer from increased turnaround time, delays in loans, and potential higher costs” We find no credible evidence, nor did the AI produce any credible evidence, to support these statements. Furthermore, we find little or no support that the work of TAF or the ASC interferes, restricts or limits how an appraiser reports an appraisal, the supervision of trainees, uneven licensing requirements, mandates from federal agencies, etc. We find these to be statements without specific facts.

    Therefore we are making ourselves available to each board or commission to attend your next board meeting to further discuss this topic. The Montana Board is very interested to hear from all 55 Boards and Commissions on this topic. Our delegation will be holding an afterhours information gathering session at the spring AARO conference. This will be an informal get together to chat about this most important topic. We will provide additional information prior to the conference in Tampa. If your Board or Commission would like us to attend your next Board meeting please contact Thomas G. Stevens, MAI, SRA, Board Chair (tom@stevenscompany.net) or Peter J. Fontana, Board Vice Chair (pete@fontanainc.net).

    We have attached the link to the live stream of the congressional hearing. https://www.youtube.com/watch?v=_XwhTQsguYI

    Respectfully Submitted

    Thomas G Stevens, MAI, SRA

    Peter J Fontana,
    Vice Chairman

    Jonathan Miller
    REIC Forum Moderator

  • #440 Reply

    In the Ultimate Act of Arrogance, AI National Tries to School the Governor of Montana

    It is out of sequence, but I didn’t have a copy of the AI National’s letter to the governor of Montana. Pete Fontana, the Vice Chair of the Montana Board of Real Estate Appraisers, said that AI National sent the attached letter after the Montana board meeting where they had passed a motion to draft the letter to Congress presented earlier here on this forum.

    Jonathan Miller
    REIC Forum Moderator

  • #431 Reply

    Why AI National/President Jim Amorin has no intention of changing course on “taking” policy.

    An anonymous appraiser writes:

    Amorin spoke at our regional meeting and made it very clear that although the policy implementation is on hold – it is just that, on hold and will absolutely be implemented. Our chapter was hoping for an “opt in/out” option and it seems to be very unlikely based on Amorin’s comments.

    Jonathan Miller
    REIC Forum Moderator

  • #421 Reply

    Vice Chair of the Montana Board of Real Estate Appraisers provides additional insights on AI National’s Actions

    A few days ago I commented on a terrifically clear letter written by the Montana Board of Real Estate Appraisers.

    The biggest challenge facing the appraisal industry is our largest trade group, The Appraisal Institute (National). At this moment in time, it is sad to see AI National work so hard against the interests of their members. The U.S. does not need another version of valuation standards that AI National keeps pushing. AI National remains disconnected from the needs of their members so how on earth can they provide valuation standards for an entire industry? They have repeatedly demonstrated they can’t see outside of their Chicago silo. Their continuing quest to undermine TAF is counterproductive, unnecessary and the least of our industry’s worries.

    The Vice Chair and co-author of that Montana letter wrote me a note about my original post and allowed me to share his thoughts. All I can say is I hope all 55 jurisdictions Peter mentions take similar positions. To my readers – please share any position papers with me so I can share them on REIC for all to see.

    Peter’s candor is refreshing.


    I am the Vice Chair of the Montana Board of Real Estate Appraisers and the co-author of the letter you reference in your blog comments on Real Estate Industrial Complex. Thank you for your thoughts and comments. We are sending the threatening letters from the AI and our thoughtful and well-reasoned response to all 55 jurisdictions under the control of the ASC and encouraging all to take similar steps. We are extremely troubled by the actions of the AI and their destructive behavior to the appraisal industry as a whole.

    If I can be of any help in getting this message to as many folks as possible please feel free to contact me at anytime.


    Peter Fontana

    Jonathan Miller
    REIC Forum Moderator

  • #419 Reply

    AI National Works Hard to Help AMCs with Appraisal Training, Despite Damaging Their Residential Members’ Livelihood

    After May 2009, when HVCC (now embedded into Dodd-Frank) enabled the appraisal management company (AMC) industry to control about 90% of mortgage appraisal work, the AMC industry trade group TAVMA (whose website no longer exists) fought hard to present their “efficiency” to the mortgage process.  This trade group disappeared within a few years and seemed to have been replaced with REVAA.

    I wrote a blog post on my Matrix blog in May 2009 called [Appraisal Management Companies] An Accident Waiting To Happen. I wrote about the 50 cents on the dollar compensation of appraisers that work for AMCs. TAVMA had a blog post at the time arguing that no, AMCs pay an average of 60 cents on the dollar and said the pay cut had no impact on the quality of mortgage appraisals.

    My interpretation of TAVMA’s position was this: If an employer posted a job listing with a starting salary 40% below the last hire’s salary – this will result in no measurable differences in the quality of job applications received. Really???

    Bring in REVAA

    REVAA’s LOL Subtitle: “To promote awareness and advocacy for the real estate valuation industry.”

    I don’t know if there was a connection with TAVMA or how they started or who is behind it, but it was fascinating to discover that the Appraisal Institute is a recommended trainer of appraisers who wish to work for AMCs.

    Here is a screenshot from a page on the REVAA site:

    The Appraisal Institute, always looking for revenue no matter where it comes from, made sure they were embedded in REVAA to promote AI classes. This isn’t simply a link out from REVAA.  AI National even built a special landing page for AMCs called “/revaa-landing-page/”  Here is a partial screenshot of the page – which is extremely warm to the AMC industry.

    I’m not against AI National growing revenue unless it is counter to the best interests of the organization. In this case, it clearly is. AI National has essentially written off the residential members who have an SRA designation to the point where the SRA designation has little or no value today.

    AMCs are THE reason for fee compression, the false narrative about an appraisal shortage, belittling valuation experts by being subjected to check box compliance by 19 years olds chewing gum, elimination of the economic viability of mentoring, causing the need for extensive legislation to control AMCs on the state level and much more.

    Instead, AI National can only see REVAA as an opportunity to sell their courses.  This is yet another tone-deaf act by AI National, and yet senior management at AI National has no idea this is a violation of their residential membership’s trust.

    Jonathan Miller
    REIC Forum Moderator

  • #412 Reply

    Michael S. Cook, MAI, SRA

    I find it very interesting the  Chairman of the Montana Board of Real Estate Appraisers, Thomas G. Stevens, MAI, SRA, is a 37 year member of the Appraisal Institute.

    It just goes to show the disconnect between AI’s National Board of Directors and the AI Membership.

  • #410 Reply

    February 9, 2017: The Montana Board of Real Estate Appraisers posts a response to the 11/16/2016 Congressional Hearing.

    After the January 25th, 2017 threatening letter sent by AI National to the Montana Board (discussed earlier in this forum), the Montana Board rightly ignored it and from the January 26th, 2017 meeting, laid out a thoughtful response to last fall’s congressional hearing on “Modernizing Appraisals.”

    As an aside, I found it disturbing that there were no active appraisers present to provide congressional testimony last fall.

    Montana Board responded with support for the current appraisal regulatory process and pointed out that the regulatory authority already resides at the state level.  (In my view, when appraisal licensing was enacted in 1991, it was always a federal law to be implemented at the state level.) The Board said:

    You will note that the state board has full authority over the regulatory process for licensed/certified
    appraisers and appraisal management companies (AMC’s). This is true of all 55 states and territories.
    Each state is required to have statutes and rules in place to properly regulate its licensees and properly
    administer the regulatory program.

    More importantly,

    Without the oversight by the ASC and the broad objective guidance by TAF, the industry would be in
    disarray. Appraisers and State Regulatory Boards need to rely on a set of rules and guide notes to ensure
    a fair, open, honest and consistent approach to operating an appraisal business and regulating the

    What the Board criticized and I found enraging about the congressional testimony, was the false narrative that over-regulation caused the appraisal shortage.  While the Board blamed risk management policy at lending institutions by not allowing trainees to inspect – I concur – I also feel strongly that the appraisal management company phenomenon is the underlying problem. By taking up to half of the appraisal fee, the economics no longer work for many appraisers. There is no longer a financial incentive to “mentor” and there has been a collapse of quality as experienced appraisers have retired or moved on to more financially feasible appraisal work (away from mortgage work). The incredible irony of this situation is that lenders have been worried about trainees but aren’t worried about the collapse in quality. AMCs have worked hard to convince lending executives that their analytics offset the drop in appraisal quality. Upper management at banks remains disconnected from the rampant appraisal quality problems at the street level.  AI National behavior over the years has demonstrated their favorable view of AMCs and therefore their continuing disregard fo their residential membership and the SRA designation.

    I commend the Montana Board for presenting this letter to Congress.  Their clear understanding of the appraisal industry and their disregard for AI National’s continuing efforts to work against their own chapters and membership interests is encouraging.  I hope all other state boards are as thoughtful about the current state of the appraisal regulatory environment as the Montana Board.


    Jonathan Miller
    REIC Forum Moderator

  • #408 Reply

    Michael S. Cook, MAI, SRA

    This letter from the AI to the Montana Board of Real Estate Appraisers seems very “heavy-handed” and somewhat demeaning to the board’s membership.  As written, this  letter could easily diminish the image of Montana’s AI membership in the eyes of the Montana Board of Real Estate Appraisers.  Secondly, it makes no mention that Montana’s AI membership is concerned with the board’s agenda.

    • #409 Reply

      Great insights, Michael. When an organization’s national leadership repeatedly shows disdain for its members and local chapters, Jim Amorin’s Montana Board letter makes perfect sense – they had no regard for the Montana chapter’s relationship with the board – they only walked over them to make their self-serving point and threat. AI National sees themselves as a competitor of TAF, wanting to push them out of the way to make AI National, a private organization, the holder of appraisal standards.

      Jonathan Miller
      REIC Forum Moderator

  • #407 Reply

    Michael S. Cook, MAI, SRA

    Kevin Pollard, MAI stated in his post on January 31:  “…National needs to realize that the Regions and Chapters our the backbone of the organization and must be carefully nurtured. That does not seem to be the case with our current leadership. At my first Board meeting, I was told that I did not represent a Region or Chapter, but I represented the membership in its entirety. I was surprised, but understood that Boards typically work that way. Maybe it is time to re-think that philosophy.”

    I think the National Board of Directors need to review the definition of “represent”.  How can one “represent the membership” if one does not represent the Regions and the Chapters, which are the MEMBERSHIP.  Secondly, “representation” starts with communication which is seriously lacking in this organization.  This organization seems to have adopted the “top-down” approach to communication rather than “two-way” communication which is the key to “representation”.


  • #389 Reply

    AI National doubles down on their threatening internal culture by “fogging” the Montana real estate appraisal board

    Jim Amorin, in his second tour as President of the Appraisal Institute, wrote a letter to the chairman of the Montana Board of Real Estate Appraisers on January 25, 2017, mostly lecturing the state board on what they can’t talk about in the following day’s meeting. He appears to be worried about future positions that could be taken by the Montana Board relating to AI National’s long-running feud with The Appraisal Foundation.

    Like or dislike AI National’s exodus from TAF, AI has continued to work hard to undermine them as a competitor of appraisal standards since at least the period just before AI National’s exit from TAF. In a world of fee compression, the endorsement of multiple appraisal standards, especially one coming from a private organization with an outraged membership, does not help the appraisal industry in the short, mid or long run.

    About my term “fogging” in the headline…I see this technique frequently used in legal letters to throw down scary sounding statements which are designed to distract from the actual point and intimidate the recipient. Remember that AI National spent membership’s money writing this letter to tell the Montana Board that they have to get approval from the governor before taking a position on any federal legislation.

    This letter shows the disdain AI National has for appraisal professionals outside of their Chicago leadership silo. The kicker is how Jim cc’d the governor and the president of the Montana AI chapter. Since his letter includes no mention of the Montana chapter of what is specifically a Montana issue, and Montana was part of the majority of chapters who were outraged about AI National’s behavior in the “taking” debacle in recent months (see their December 22, 2016 letter posted earlier), logically, this is an AI National “dressing down” of the Montana chapter board.

    I can only assume from this letter that the culture of AI National leadership has performed no inner reflection on past behaviors that lead to membership outrage nationwide. They either have no intention or no ability to restore credibility with their chapters and members.

    UPDATE – I modified the second-to-last paragraph because I forgot about the Montana AI Chapter’s position letter on the AI National “taking” policy.

    Jonathan Miller
    REIC Forum Moderator

  • #343 Reply

    Kevin M. Pollard, MAI

    Jonathan –

    I agree completely with everything in your blog except the AI’s exit from TAF. I was on the Board of Directors at that time, and attended quite a few of the TAF meetings, as well as a special Board meeting on the matter. We were being told that we needed their “permission” to speak out about any issues, after we had been specifically asked by Congress for our opinion. TAF was going way beyond their original mandate by trying to get into the education arena, and develop best practice standards, and didn’t want us saying anything detrimental to them. We had no choice but to leave to maintain our independence, and our ability to express ourselves. Please get off the “why did we leave TAF” boat. It was the best thing the AI ever did, even though we handed them USPAP on a silver platter (gratis), and then had to pay for it after our exit. We agonized over many months before reaching the decision and tried to reconcile with them repeatedly.

    I do think meddling with Chapter finances is a very bad idea, except for those who are struggling and need help. Otherwise, National needs to realize that the Regions and Chapters our the backbone of the organization and must be carefully nurtured. That does not seem to be the case with our current leadership. At my first Board meeting, I was told that I did not represent a Region or Chapter, but I represented the membership in its entirety. I was surprised, but understood that Boards typically work that way. Maybe it is time to re-think that philosophy.

    • #439 Reply

      This is a response to Kevin’s post shared with me from Pete Fontana, Vice Chairman of the Montana Board of Real Estate Appraisers

      I find this post by Kevin M Pollard, MAI to be extremely ironic as it relates to the letter from the Montana Board. As noted below the AI left the TAF because they needed “permission” to speak out about issues to congress, and then they take the same position about an independent board voicing their concerns about a congressional hearing. This to me is not only hypocritical but way out of line for an association to challenge the authority of an independent state board.

      Jonathan Miller
      REIC Forum Moderator

    • #344 Reply

      Thanks Kevin – great insight.  I hear you on the AI leaving TAF issue and appreciate the input.  I derived my opinion by speaking with some recently who was there like you were at a very high level.  I also spoke with David Wilkes of TAF at the time who was a guest on my former podcast and I even offered Leslie Sellers, then president of AI the opportunity to provide the AI counterpoint.  Unfortunately he emailed me the dishonest “I’m excited about our future” answer which is how the damaged leadership culture there thinks this is how you handle an unflattering event.  Either way, their poor communication history is the basis of all that has angered the membership that has resulted in the outrage expressed across the U.S.

      Jonathan Miller
      REIC Forum Moderator

  • #275 Reply

    The Appraisal Institute has to be wondering: Why is that guy with the “New York Blog” airing our issues?

    The above title asks a question that is more of a certainty.  Jim Amorin, current president of the Appraisal Institute, indicated his displeasure multiple times with AI’s issues being aired on the (my) “New York Blog” when he recently spoke in Dallas. I was told this by people that were there.

    Sadly, or better yet, tellingly, he didn’t realize what he was saying.  If the “New York Blog” and all the people that publicly pushed back didn’t do what we/they did, Jim Amorin wouldn’t be standing there making such a ludicrous statement to save face.  Lack of transparency is one of the biggest “tells” of a silo that Jim and his handful senior executive peers inhabit. Jim showed the same arrogance and naivety that past president Scott Robinson showed to Texans when explaining the “taking” policy (but before I created this “New York Blog”) – his performance was also shared to me by people that were there.

    So why do I keep doing this? A better and more realistic question would be: “Why am I doing this when my appraisal firm and myself are the busiest we have ever been in our 30-year history?” or “Why am I doing this when I quit the organization after watching the disingenuous video by former 2010 AI President Leslie Sellers explaining why AI left TAF?”

    Well, why do I keep doing this?

    It is as simple as this: I hate politics, especially when it works against good people, in this case, members of the Appraisal Institute as well as the appraisal industry.

    The appraisal industry has long been the receiver of regular beatings by everyone around it and lately it is because we no longer have anyone watching over us, protecting us, leading us or helping us navigate a rapidly changing market.  Instead, our industry’s largest trade group and therefore de facto industry leader has been beating its members with lack of accountability, the perception of chronic self-dealing and terrible communications expertise (just look at Jim’s incredibly bad letter further down on this site), lack of representation to institutions we do business with and much more.  Somewhere along the way AI National forgot they work for the membership rather than the membership reports to them.

    In an era of fee compression, appraisers can no long accept this adverse behavior that impacts their livelihoods from the Appraisal Institute.  It pains me to hear high ranking people outside of the profession describe AI as a “joke” and “arrogant.”  It is time for the membership to stop believing press releases, push back and make changes.  It is too expensive for members to keep paying for no apparent “value add” and it serves as a distraction from their attempts to grow as a professional.

    AI membership needs to do one of the following using their financial muscle that AI National tried to take away with the “taking policy” debacle:

    1. Get rid of national leadership right now by withholding all dues payments collectively until they are replaced.

    2. Quit the Appraisal Institute as a distraction to their careers by withholding dues and focus on other things to make their livelihood as appraisers.

    It should be now clear to all members why the “taking” policy debacle was so important to stop.  Money does indeed change everything.   At this point, membership can only effect change with their wallet.

    The time is now.

    The emperor has no clothes.


    Jonathan Miller
    REIC Forum Moderator

  • #272 Reply

    Voice of Appraisal E136 A Deep Dive into A.I. with Jonathan Miller!!!

    I speak with Phil Crawford on his indispensable Voice of Appraisal radio show/podcast, where I address and provide context to AI National’s “Taking” policy debacle. His show is something I look forward to listening to every week.

    Jonathan Miller
    REIC Forum Moderator

  • #267 Reply

    AI National Temporarily Caved-in to Membership/Chapter Pressure Against Their “Taking” Policy Debacle – My Analysis

    January 12, 2017 AI President Letter to AI Chapter Leaders letter

    “Taking” notes on the AI President letter on the “taking” policy suspension announcement

    Using this letter, I inserted [with brackets and in bold] questions or comments based on my interaction with board members, members, chapter/national officials since the Thanksgiving “taking” policy announcement.

    Sorry in advance for the cynical tone but the actual issue is AI National’s stealth culture, and the same people responsible for the debacle are now spinning themselves as being responsive to memberships needs.  Trust from membership seems fairly non-existent after the disrespect they have endured for years.  I remain very skeptical that this announcement changes anything long term, but rather delays it for a year with their hope that membership outrage will wane.  Still, it is a change, and I am hopeful AI National wants to make the Appraisal Institute relevant again as much as the membership and chapters do.

    January 12, 2017

    Dear Appraisal Institute Chapter Leader:

    I hope that your new year is off to a great start. I’m excited about serving as your president this year, [no disrespect meant, but isn’t it odd to have a repeat president?  Does anyone know why?] and I look forward to working with all of you to help lift the Appraisal Institute to even greater heights in 2017. [AI has not been rising to any heights for more than a decade. Rather it has seen sliding membership and created a legacy absent of trust toward AI National leadership long ago that brought on the sudden large-scale, national, widespread outrage in December.]

    Here’s some important news that I think you’ll be happy to hear. [acknowledgment of the widespread outrage] In November, you’ll recall that the AI Board of Directors approved a new Chapter Financial Management and Administration Policy.  [implemented without membership awareness and even worse, AI National tried to pass it off as merely a “bookkeeping” change] The directors have spent considerable time since then hearing from you and other Appraisal Institute professionals about the new policy. [AI National leadership was inundated with angry blowback yet has been outwardly silent since the outrage began in early December until now – they were probably hoping the outrage would fade away over the Christmas and New Year’s holidays – there has been no mention of a change in the process to prevent such a debacle from happening again]

    Responding to the questions and concerns many of you have raised, [likely the proper phrase should be “most of you”] the Board of Directors on January 10 decided to suspend full implementation of the policy – currently targeted for January 1, 2018 – to a date to be determined later.   The Appraisal Institute will continue to solicit and receive feedback on the policy, so we encourage you to share this new information with your respective boards and to continue to convey your constructive feedback to members of the National Board. [wondering if leadership understands how to solicit feedback as the current culture has not demonstrated this in many years]

    The Appraisal Institute also will continue to offer financial management and administrative services, as feasible, to Chapters that would like to take advantage of them. [this is a reasonable offer for the handful of chapters that want to opt in for help versus making it mandatory for all] AI will work with Chapters that wish to be part of the policy’s initial implementation (I.e., “beta test”) and will incorporate those experiences and other feedback this year for potential adjustments to the policy. [the phrase “potential adjustments” to the policy is poorly articulated coming from the context of eventual implementation after a few tweaks] Although the policy approved by the Board in November encourages Chapters to provide their input this year to enhance the policy, this apparently wasn’t made clear in prior correspondence. [THIS IS THE UNDERSTATEMENT OF THE YEAR because no one seemed to know anything about it, and it was already in place when most of the chapters and membership became aware of it, hence the widespread outrage]  Therefore, based on this information, the Board decided to suspend full implementation [which as worded could be taken as the policy will be implemented with some possible tweaks], a move that is intended to help clarify any confusion or uncertainty or lack of knowledge about the policy … while allowing more time to solicit Chapters’ input. [there has been no explanation why they did not implement any such solicitation of input, to begin with which begs the question, “how will AI National know what to do with the membership feedback if solicitation of such feedback had not been part of the AI National culture for years?]

    The Board has received plenty of input – both pro and con [this is classic public relations spin – as presented it looks like it was a 50/50 outlook when betting money would think it was more like 99/1 against] – on the policy since its passage. While many Chapters [prior AI National correspondence claimed there were ten chapters that accepted the policy – I suspect very small chapters that need help or politically connected chapters like Houston are probably in only because the top leaders are part of AI National’s inner circle] are eager to participate in the new policy, others have raised questions and concerns indicating a lack of clarity over what the policy does and does not do. [again a 50/50 inference which appears very disingenuous] The Board’s recent suspension of full implementation [again, hedging to install partial implementation which could be 99 of 100 items in the original policy] will allow Chapters more opportunity to learn about the policy and to share their feedback.

    Please be sure to reach out to your respective region chair or vice chair [this seems particularly ironic since many members have told me that AI National intends to dismantle the regions]  to let them know your thoughts. I look forward to working with you on this topic and others during 2017. [for AI National to rebuild the trust of the membership, he will need to answer a lot of questions, such as the AI-FNC deal terms, details on spending for international expansion and the travel accommodations of each member of the executive team including him, the actual reason AI National left TAF (whether or not you were in favor of it no real reasons were provided the membership other than being excited about the future), addressing high headquarter overhead and compensation given poor performance, so-called senior executive allegiance to themselves rather than to the membership and many more I’m told]

    Thank you for all that you do for the Appraisal Institute. [this sentence conveys that the members are working for the organization when the organization should be working for the members]



    Appraisal Institute President



    I have inserted comments and questions adjacent to virtually every sentence in this letter.  I have found AI National leadership’s behavior unprofessional and self-serving (amateur) which is why I quit a while back.  I’m not a disgruntled ex-associate which is how they have tried to portray me.  Like most of you, I work too hard to allow a disconnected few screw around with my future and my industry’s future.

    If none of my concerns are valid and you feel they should be brushed aside, then AI National’s communication skills continue to be very poor.  If you trust them implicitly, then at least you can take solace in the fact that everything will be great and you can be excited about AI’s future as much as their previous and current presidents are.

    Members have worked too hard to achieve and maintain their SRAs and MAIs to see them fade away from branding neglect.  I just want AI to be relevant.



    Jonathan Miller
    REIC Forum Moderator

  • #261 Reply

    Wednesday January 11, 2017 Discussion of the Appraisal Institutes’ New
    Chapter Financial Management and Administration Policy
    with Jim Amorin, MAI, SRA, AI-GRS, President, Appraisal Institute

    During yesterday’s meeting, Jim Amorin announced that on Tuesday, the AI National Board voted to put the controversial financial policy (the “taking”) on hold for membership feedback. Note: This policy has already been forcefully rejected by many chapters in writing.  I don’t see what additional feedback is needed.  The membership outrage clearly demonstrated is how the membership already feels.

    Thanks to Jim for validating this blog’s (REIC) purpose.  He mentioned his displeasure with this “NY Blog” multiple times during this event. GOOD. That is the point. If the collective action of many members wasn’t undertaken and REIC wasn’t created, it would be AI National business as usual and the disrespect towards AI membership would continue unabated.

    And membership continues to decline.

    This forced AI National decision is only a baby step: While this controversial policy is on hold, the cause of AI National disconnect is still not being addressed.  This is merely a band-aid on a symptom.  AI National of old still remains AI National of old.  Let’s make it relevant again.

    Next step: earn trust

    Jonathan Miller
    REIC Forum Moderator

  • #259 Reply

    2004 Allen letter with FNC-AI Deal Terms regarding the “Appraisal Institute Residential Database”

    This letter has been in wide circulation lately concerning the AI National deal with FNC. I have confirmed it’s validity with the recipient.

    Jonathan Miller
    REIC Forum Moderator

  • #255 Reply

    Letter from the Past Presidents of the North Texas Chapter

    Given this lack of respect for the membership and lack of transparency, we respectfully
    request that this policy be rescinded and brought to the membership for discussion, vetting
    and analysis to ensure the most optimal outcome and member support. After all, our
    organization exists to SUPPORT the members.

    Jonathan Miller
    REIC Forum Moderator

  • #252 Reply

    Metropolitan New York Chapter Board of Directors response to new AI chapter policy

    Here’s a little housekeeping post.  I realized that the first chapter protest letter I ever saw that denounced the AI National “taking” of chapter funds and the subject of my first post on this debacle, was not actually sitting on this site.  So I dropped a copy here for your convenience (see attachment below).  Sorry, New York!


    Jonathan Miller
    REIC Forum Moderator

  • #250 Reply

    AI National continues to remain silent on membership outrage over their unvetted “taking” of chapter funds policy debacle.  It was not addressed in their monthly newsletter to all AI chapters today.

    On the second monday of each month, AI National sends out a chapter newsletter called “Chapter FYI!” to each chapter’s officials.  This is the landing page for the newsletter.  http://www.appraisalinstitute.org/designatedcandidateaffiliate/chapter-fyi/

    I created a PDF of the public facing landing page as an attachment below.

    From the landing page – The second Monday of each month, Chapter FYI will be sent via email to the following chapter leaders: President, Vice President, Secretary, Treasurer, Executive Director, Education Chair (and co-chair), and Candidate Guidance Chair. Each issue includes important information and updates pertaining to AI chapter leaders. Please feel free to share pertinent information with other leaders or members of your chapter. The current issue of Chapter FYI can always be found on the AI website.

    In today’s January 9, 2017 edition, links to the previously released documents regarding their “taking” policy were slid in with a non-descript mention in between a large list other announcements:

    FAQ mention in Chapter FYI! Newsletter 1-9-17

    No other mentions – as if the flurry of events between Thanksgiving and New Year’s never occured.  AI National continues being very disrespectful to both the membership and chapter leadership, especially given the level of outrage expressed.  AI National works on behalf of membership and the chapters.

    As anyone can tell you in public relations crisis management, addressing controversy immediately and transparently, helps resolves a crisis much more quickly than pretending nothing happened. This is why AI National’s stealth culture has driven the organization to such a disconnect with it’s membership.


    Jonathan Miller
    REIC Forum Moderator

  • #242 Reply

    January 4, 2017 email from an AI member with MAI, CRE, CCIM designations making the rounds

    Subject: Chapter Financial Management and Administration Policy

    Below is likely my last dues payment to the Appraisal Institute, which is attributed to the Chapter Financial Management and Administration Policy. I started to pay the entire amount for 2017 dues but when doing the math on the payment plan it made no sense to pay at one time. FYI, the CCIM has a payment plan but it costs a significant amount to use. Poor business decision by the AI to have such a lenient payment plan, but good for member who take advantage.

    Since I do not know any of you, let me say I was a member of Exec when Spence Powell was president, as I was the chair of GAB. The takeover of chapter money came up during this time period. It was DOA.

    I was one of the lone voices on Exec that made it clear Education was not the money generator being represented by the department. I had gone through the financials as I was also on the finance committee. The AI finances were a mini Enron.

    I also made a motion in 1996 on Exec for the AI to drop out of the Appraisal Foundation. This was not well perceived, meanwhile the AI was paying the Appraisal Foundation disproportionate dues. In years later the AI dropped out.

    Many mistakes in leadership over the years, including mismanagement by the person running the day to day operations. I was involved in getting one of the Executive Directors terminated.

    I know the AI is faced with demographics that are not favorable. This may or may not come to pass. The problem is no one doing day to day appraisal work is being compensated for their skills, knowledge, education, experience and training. If this were not the case the industry would attract young members. Moreover, where the MAI once highly recognized, large companies have taken its place with name recognition – CBRE, JLL, Integra, etc. Whereas when the organization began the MAI credentials provided that name recognition as the real estate industry was made up of small businesses.

    To be blunt, the MAI designation is not important to me today. My business has changed from a mix of appraisal work generally lender appraisals: to expert witness work, counseling and brokerage. The client needing an expert for litigation will pay two to three times the fee and be glad you are on the team. I made this shift at least 10 years ago when the bidding process for appraisals began, i.e., file stuffer. At that time I told many colleagues I believed I could rely on the CRE and CCIM designation for credibility.

    My unsolicited advice to leadership:

    · Drop this change in finances, except where a financially impaired chapter needs help.

    · Quit confusing the market with an alphabet of designations and programs: clean up and drop the SREA, RM and SRPA. If you need to give the SRPA members the MAI, move on and just do it.

    · The AI litigation education I have not taken, as I obtain that education from SEAK, who provides training to a myriad of experts. Why the AI needed to invent a class when it was offered by another provider, if membership wanted the training.

    · Quit tying up our time with education requirements, i.e. the class requirement every 5 years. Time is money to the members. Membership knows the AI is just attempting to generate more money.

    · Move to an affordable city for business. Why we are in Chicago is beyond me. I was involved in being highly critical of past president Pat Marshall when the AI moved to the John Hancock building and purchased a $1.0 million in new furniture.

    · Accommodate designated members who work for businesses not engaged in appraisal work, i.e., my wife works for INVESCO. She dropped out even though her dues were paid by INVESCO. Members like her simply do not have the time keep up with education that is not meaningful to their employment and career.

    · Consider a realignment with NAR. The company story give over the years is not totally true: as there was an irreconcilable personality conflict between the two organizations at the highest level.

    My thought is the AI ship is taking on water and needs a bailout. Possibly the AI has an underfunded defined benefit pension plan? Overhead is out of control and technology is not being used to reduce staffing.

    The membership will stand behind the organization so long solid business decisions are made – the Chapter Financial Management and Administration Policy is one more example of a bad decision. Do not play hide the ball with membership they are as smart and likely smarter than many of the organizations leaders.

    Jonathan Miller
    REIC Forum Moderator

  • #238 Reply

    Senior AI National Executives Travel The World Trying to Find New Members

    UPDATE A reader just suggested this alternative title: AI leaders take their message overseas (fiddling, while Rome burns).

    Here are a few comments shared with me on the attached travel photos from the 4Q2016 issue of Valuation Magazine – it chronicled the globe-trotting of senior execs at AI National last fall.

    “How many %$&?!!*@ members do we have in Romania? Who accompanied him?

    “Would like to know how much travel money was spent overseas by the organization last year.”

    “Page 5 exhibits clearly why the AI, absent huge changes, will never again get a penny from me. While the residential appraisal industry fades away in the USA the organization’s feckless leaders party in Bucharest, Munich and Kyoto in the space of less than one month.”

    My curiosity as a non-member begs a few fundamental questions about AI National travel policy:

    – Do they fly first class at AI National expense?
    – Do their wives accompany them at AI National expense?
    – Do they ever bring friends at AI National expense?
    – Do they stay at five-star hotels at AI National expense?
    – Do they dine at five-star restaurants at AI National expense?
    – When will AI National’s travel expenditures for both expanding membership and any other reasons be disclosed?
    – What is the ROI on new international membership for this marketing effort?

    These are the questions that come up in conversations with members. If AI National had the trust of their members and was transparent about such policies, there would be no need to ask. No one I know seems to know the answers to these simple questions.

    [click on attachment below]


    Jonathan Miller
    REIC Forum Moderator

  • #237 Reply

    That AI National Youtube Videos Don’t Get Any Love is Eye Opening

    I just noticed that the AI National Youtube video landing page has surprisingly low page views. The 2017 Ottawa conference video has 255 views in a month, less than 10 views per day. And how does a conference in Canada help the vast majority of membership in the U.S.? It seems like a pretty abstract concept given the lack of traction for recruiting international designees. At the bottom of one of the 2 attached graphics below, the category “consumer videos” has the lowest viewership with one having 8 views in 10 months (less than 1 view per month).

    Divide page views by days and this landing page is essentially unused by any reasonable standard of today’s online world.

    Why not mobilize all 18,000 AI members to get them excited about new content?  I’ll bet most members aren’t aware of these videos, just like the chapter “taking” policy debacle that prompted outrage (as evidenced by the all the AI chapter BOD letters on this site). And if the members were aware of these videos, the lack of views says something about the irrelevance of the content, no?

    High quality production values are expensive and since these videos appear to attract nominal viewership, this seems like a robotic endeavor, a “have to do” – for AI National to be able to say they have a video library of many topics to help their members be successful (or something along those lines).

    When leadership operates in a vacuum, they can’t serve the needs of their membership because they don’t understand what those needs are.

    Jonathan Miller
    REIC Forum Moderator

  • #233 Reply

    Questions from an Upset AI Member to AI National

    A very upset AI member passed this list of questions along to me and asked me to share here. I think these questions are in the minds of most members, at least those that I know….I especially appreciate the last paragraph.

    1. Why don’t the AI Board Members represent their Regions, their Chapters,
    and their Members rather than the Board itself?

    2. Why was something as earth shattering as the New Monetary policy NOT
    openly discussed rather than sent out as a surprise holiday gift?

    3. Why must all National meetings be held at such expensive venues?

    4. Why does AI continue to waste precious time, money, and effort on foreign
    alliances that don’t benefit the most Members? Why must their spouses be

    5. Why does governance remain in the control of a cadre of directors, etc.
    with VERY little turnover?

    6. Did A I, or any of its members past or present, or any of its interests,
    profit in ANY regard resulting from the sale of the AI sponsored data
    mining company? Was sale price really $475 million?

    The membership is entitled to honest, open, and direct answers. There must
    be sweeping changes moving forward. The time is now or never.

    Jonathan Miller
    REIC Forum Moderator

  • #227 Reply

    The Board of Directors of the Montana Chapter of the Appraisal Institute opposes the adoption of the Appraisal Institute Chapter Financial Management and Administration Policy.

    “The Board of Directors of the Montana Chapter of the Appraisal Institute does not support the policy and urges the National Board of Directors to reconsider the implementation. Collaboration with Chapters and their Members is vital in developing significant policy changes.”

    Jonathan Miller
    REIC Forum Moderator

  • #225 Reply


    “The Past Presidents of the New York Chapter of the Appraisal Institute whose signatures appear below
    wish to add their voice to the denunciation of the recent actions of the National Board of Directors in
    implementing, without any discussion or input from the membership, of the new Financial Management
    and Administration Policy.”

    Jonathan Miller
    REIC Forum Moderator

  • #221 Reply

    Newsletter from the Houston Chapter Embedded With AI National Political Influence

    One of the things I learned over the years, especially as a fan of Edward Tufte, is to identify the source of information in order to determine the credibility or neutrality of the message.

    I was interested to see that the Houston chapter newsletter sent out today presented their position on AI National’s “taking” policy. The position was written by Eric Schwartz, the AI Region VIII Chair for 2017-2019. I don’t know this person but I am skeptical he can be neutral in this matter and still be able to keep such a coveted position in the AI National hierarchy. In fact, the rationale presented by the Eric seemed to be largely taken from the AI National FAQ. To paraphrase Eric’s presentation – “Yes AI National was terrible at communication on this new policy but it is only a bookkeeping change and we are all on the same team.” Unfortunately, this is political rhetoric that is not quite right. Here are some thoughts.

    – The directors have not demonstrated being committed to being better at communications to their members at any time in recent history that I or any members I know are aware of. This is clear from AI National behavior since at least the exit from TAF. Recent actions are consistent with past practice and in fact the trend line is moving toward less communication. For example, AI National published the FAQ after membership outrage and rushed to release it on a Friday afternoon before Christmas. Therefore this is nothing but a silly comment.
    – Out of the blue, after 80 years, Eric says that AI National claimed that the chapter “taking” was in the best interest of members yet doesn’t explain why. They did the same thing in the FAQ. Yes, they said chapters will be able to spend more time on other things but this has never been an issue with the majority of the chapters that I am aware of.
    – Eric wisely dropped benefit #9 from the FAQ since AI National is not particularly gifted at financial management. As presented earlier on REIC, AI National stated benefit “9. Enables Chapters to benefit as a whole from greater potential returns on investment
    based on volume, professional investment services, etc”. The AI National Annual Report for 2015 reported their investments as loss of $92,157. Entrusting chapter funds, therefore increases risk to members by submitting all their hard earned funds into AI National’s stealth culture that loses money on their investments.
    – AI National has been “one entity” for 80 years but only now they feel bylaws are being violated? What about the previous 80 years? Not reasonable.

    Here is the big one…”The change is primarily a bookkeeping change.” That seems to be an incredibly misleading statement. If you read the “taking” policy, it is clearly not a bookkeeping change. I would submit that the taking of chapter funds into a commingled account (but kept track of) is deeply disturbing for an entity that has demonstrated increasingly stealth behavior for years.

    And the fact that Jim Amorin, a repeat president-elect (which is very odd, in and of itself) was at the Houston chapter meeting to swear in new leadership, shows how strong their AI National political affiliation is. As a large chapter, I assume AI National badly needs them to be on their team.

    I am confident that the Houston chapter members are good, honest and hardworking appraisers. I would love to know if the Houston membership voted or even discussed this announcement as a group before sending out the newsletter. Call me skeptical.

    Here are Eric’s thoughts in the chapter newsletter on the “taking” policy, appearing to rely almost entirely on AI National’s 12/23/2016 FAQ.

    I know that some are upset as to how this issue was communicated to chapter leadership and membership. The board had no input as to how and when it was done and virtually all the board members have the same concern. The directors are committed to being better at communicating to our members. Please remember that this action is in the best interest of all members. It is designed to maximize accountability, while minimizing risk. The change is primarily a bookkeeping change. No one is taking the funds held by the chapters. The operating funds are simply being moved to one financial institution and the reserve funds are being moved to an investment account to allow for maximum return.

    The misunderstanding associated with this issue lies with the Appraisal Institute, and its Board of Directors. Over the years AI has allowed the chapters to operate independently which is in direct conflict with the By-Laws. We are one entity, a national organization with 80 chapters. All funds held by the chapters are held in trust for the whole organization. We must break away from this “us” vs. “them” mentality. We are one and the national boards of directors, along with the Houston Chapter board of directors are dedicated to serving all of our members while minimizing risk to the entire organization.

    Jonathan Miller
    REIC Forum Moderator

  • #205 Reply

    AI Chicago Chapters letter to AI National on the “taking” policy is attached. My apologies, I thought I had posted this a few days ago.

    Jonathan Miller
    REIC Forum Moderator

  • #202 Reply

    AI Nevada Chapter response to AI National’s “taking” policy is attached.

    Final sentence of letter: “We urge the Appraisal Institute Board of Directors to withdraw the implementation of this policy,

    Jonathan Miller
    REIC Forum Moderator

  • #189 Reply

    AI National Distributes FAQ Policy on Chapter “Taking” Policy

    After intense nationwide chapter and membership backlash, AI finally opted to provide some of the details for taking control of most of each Chapter’s cash (“taking”). Their FAQ was distributed on December 23rd, 2016, the Friday before the holiday weekend. See link below.

    Unlike the Thanksgiving release of their already BOD approved “taking” policy decree, the odd FAQ release date infers AI National’s deep sense of urgency to counter the negative conversation that exploded from their disastrous (lack of) communication. The idea that the cheery letter from the AI president back in November would be enough to both take and control all chapter funds for a fee was the height of arrogance and showed disdain to its membership – as I’ve written about before.

    Unfortunately for the chapters and membership, this FAQ appears to be a document to fog the “taking” issue by loading in a lot of procedural rules that should have been disclosed with their initial announcement and doesn’t address the heart of the matter. These housekeeping items should have been thought through and disclosed back in November. This clerical procedural document (FAQ) seems to be an attempt to cause a member who reads it to say “With all this detail, it sure SOUNDS like AI National knows what they are doing.” Fogging is a time-honored public relation and debating technique.

    Their FAQ addresses some of the open-ended language of the “taking” policy but it also suggests that the original “taking” policy had been rushed out in November to coincide with the Thanksgiving Holiday in order to minimize membership resistance. Of course, I could be wrong. Only the BOD would know that.

    Incredibly, this FAQ doesn’t address the actual problem that caused chapter and membership outrage: The lack of trust towards AI National and their stealth culture by the membership and chapters. And it doesn’t leave open any opportunity to undo this massive change in the organizational culture that blindsided the membership and chapters. They just say “no.”

    Early next week, I’ll break it down.

    CFMAP FAQs–122316_FINAL

    Otherwise, Happy Holidays to all!

    Jonathan Miller
    REIC Forum Moderator

    • #200 Reply

      Current and Former Employee Reviews of AI National via Glassdoor.com

      Since one of the biggest criticisms of AI National has been their stealth culture and top-down authoritarian management style, it is probably helpful to take a look at what current and former employees think of working at AI National. Glassdoor provides a number of reviews that are presented below.  It provides a sense of how the anti-chapter “taking” policy could have evolved within AI National culture and how blindsided they became from the membership backlash.

      Glassdoor holds a growing database of more than 8 million company reviews, CEO approval ratings, salary reports, interview reviews and questions, benefits reviews, office photos and more.

      Here is one of the telling comments consistent with many of the others provided on the site.

      I’ve never worked at an association before where the volunteer leaders are treated like royalty–we were actually instructed NOT to ever talk to a board or committee member, as if we were too stupid to say anything intelligent, even though we were the ones carrying out the work for the projects determined by the Board and the Committees. The director-level staff employs this same attitude–if you’re not a director, not only are you not worthy of ever attending a director-level meeting, you are also not able to talk to a director outside of your area without permission from your own director. And forget about getting credit for any work that you do. You’re supposed to just be happy you still have a job. Job security is awful–good people get let go all of the time for emotional reasons on the part of the all-knowing directors. And the CEO? If you’re lucky, you’ll see him about 4 times a year. Walking the halls and talking to staff? Why would he do that? He already knows everything there is to know to run the association.


      UPDATE A reader pointed out that AI National only has a 17% approval rating.  See attachment.

      Jonathan Miller
      REIC Forum Moderator

    • #190 Reply
      Profile photo of John McMahon
      John McMahon

      AI National stated benefit “9. Enables Chapters to benefit as a whole from greater potential returns on investment
      based on volume, professional investment services, etc”.  The AI National Annual Report for 2015 reported their investments as loss of $92,157.

  • #180 Reply

    My personal take on not only the current situation but the context of how this controversial decision came about is that the issue is organization’s management culture. After receiving information and visiting with a number of people who have been involved with AI a very long time, my current opinion, subject to change based on additional or revised information, is that the overriding focus on centralized decision-making, management and finances is putting national at odds with active local involvement. My current thought is that for real substantive change to take place will require what the military calls a “stand down” (stop the bus) and complete a review that allows for input from for example a consultant in membership driven non-profit management and culture as well as from those of us who are objecting to how things are done. This current situation is only a symptom of the management issues that many of us resent. AI is a great organization and has been and continues to be a leader in real estate valuation. Our goal is improve its responsiveness to the “stakeholders” who provide the vast majority of the financial support.

  • #179 Reply

    The President’s message from the Chicago Chapter provides a good overview of their chapter perspective towards AI National. It is the same theme seen across other chapter letters that are in the public domain through the slew of emails by the membership.

    Here’s is the link to the Chicago Chapter’s on point president’s message by John G McMahon, SRA:


    And a screenshot of the letter from their website is attached below.

    Jonathan Miller
    REIC Forum Moderator

  • #173 Reply
    Profile photo of Gene Rhodes
    Gene Rhodes

    Some thoughts from a member of the North Texas Chapter of the AI

    • #175 Reply

      Thanks for sharing your thoughts. One of the unfortunate things embedded in AI National culture has been a fear of repercussions for speaking out. That’s sad and is one of the symptoms that shows how much AI National has drifted from relevancy. Member input is the lifeblood of an essential and vibrant organization. Your “devil may care” letter says a lot about what a stand-up professional you must be.

      Jonathan Miller
      REIC Forum Moderator

      • #243 Reply
        Profile photo of Jim Plante
        Jim Plante

        I’m a little concerned that you would advocate a democratic organization while patterning its origin after the US Constitution. This nation is a republic, and I would offer that any reorganization follow that pattern. If it were so, then we might not be in the situation in which we now find ourselves. The republic draws lines in the sand, beyond which neither executive, legislative, nor judicial may proceed. Changing those lines requires full knowledge and consent of a supermajority of the members. Think about it, please.

        On another topic, much criticism has been heaped on AI for withdrawing from The Appraisal Foundation (TAF). In my opinion, this criticism is unjustified. Mr. Rhodes also posits that we should rejoin TAF. I don’t agree. We should avoid TAF at all costs. Why? It is funded by the Federal Financial Institutions Examination Council (FFIEC). These people are clients for an enormous number of appraisals. Allowing them to effectively direct the standards under which we appraise is IMO a conflict of interest. Effectively direct? Yep. At last check, TAF gets over $3 million per year from the Appraisal Subcommittee (ASC) of the FFIEC. He who has the gold makes the rules. Check TAF’s form 990 on Guidestar.com for current figures. You’ll find that like most government-sponsored entities, it is top-heavy with executives drawing more pay than their contribution justifies. And, BTW, AI’s annual contribution to the TAF coffers was $40,000.

        TAF tried to sanction AI for describing their desire to intrude into appraisal education as a “power grab.” It was an accurate description, and also would have damaged a major source of revenue now being provided by its member organizations. AI would not tolerate it, and its then-President would not kowtow to the New York tax lawyer who managed to get himself elected Chairman of TAF’s Board of Trustees.

        We were right to withdraw from TAF, and I don’t want to see us return.


  • #150 Reply

    Miscellaneous feedback…

    I was told the LA Chapter is writing a letter.  Another one from New York, Atlanta, some New England Chapters and possibly Minnesota.  North Texas sent something a month ago – already posted here.  Please post these BOD chapter letters on the forum when you have a copy or send to me and I’ll take care of it.

    Someone told me that the correct term for this action is “receivership.”  That the National Executive Board is placing all chapters in involuntary receivership.

    I also heard that AI was going to do a daily sweep of the chapters’ accounts with interest.

    Jonathan Miller
    REIC Forum Moderator

    • #166 Reply

      I saw this term used in an email as well– “involuntary receivership”. I am not an attorney but do valuation work for bankruptcy attorneys. This is a technical legal term and I offered the opinion to the user of this term that it might be better to use something that does not imply that some type of legal action involved. Furthermore, this would not be necessary since AI is one organization presumably and the chapters are not separate organizations or chartered as such– that is my best guess.

      This could lead to rumors and mis-information and personally I consider it hyperbole. At the current time we have seen way too much of this from a political candidate. So my personal view is that we should stick to the facts, use terms that are not inflammatory, inaccurate, misleading and be careful of making accusations that are not based on solid information. If we are speculating or stating our opinion about what current events might lead to, let’s be clear that it is speculation and opinion and NOT fact. I think that would help everyone. Most people are torqued up already over the election and massive change that might result in the govt and the results for our business and profession.

      • #167 Reply

        Thanks for the thoughts Joe. Yes, you are correct, we should focus on the facts. I deal with lawyers in our appraisal practice all day long so your point is well taken. But the problem we have with this situation is the byproduct of an AI organizational culture that isn’t known for sharing important information with anyone outside their circle – this puts the membership at a disadvantage when trying to get everyone to understand what is going on at AI National. That is THE problem that needs to be corrected for AI National to be relevant again to the industry. When speculative items about AI National are brought up here, they should be characterized as someone’s opinion or a rumor, etc. but not be hidden from view. It’s a great opportunity to clarify to the membership what is actually a rumor and not a fact. Thoughts?

        Jonathan Miller
        REIC Forum Moderator

  • #148 Reply

    “Inland Northwest Chapter membership voted unanimously to formally express our dissatisfaction with the Appraisal Institute’s new Financial Management and Administration Policy.”

    Jonathan Miller
    REIC Forum Moderator

  • #146 Reply

    Past Presidents’ Chicago chapter letter to AI.   Need the BOD letter too – anyone have it?

    Attached please find a letter to AI in regard to the new Finance Policy. In addition to this letter from the Board of Past Presidents of the Chicago Chapter, a Chicago Chapter letter is also being sent to National today. You will all receive a copy of that letter also. Please read and redistribute if you wish. Those members of the AI Board that voted for that Policy have disregarded their fiduciary responsibility to our Members, Chapters and Regions. Transparency and accountability to the Members, Chapters and Regions, the life-blood of the Appraisal Institute, was nonexistent. Your Regional Directors will receive this letter also, and you are free to support our position or not. Let’s make the AI Great Again! This can be accomplished by transparency and accountability. No more stealth planning when it effects our Members, Chapters and Regions.

    Joe Mags
    Joseph C. Magdziarz, MAI, SRA, AI-GRS, AI-RRS
    2011 Past President of AI

    Jonathan Miller
    REIC Forum Moderator

  • #141 Reply

    The AI stealth policy decision currently in effect and rationale.

    Chapter Financial Management and Administration Policy
    Adopted by the Appraisal Institute Board of Directors on 11/18/2016

    Background Regarding Chapter Financial Management and Administration Policy
    Adopted by Board of Directors on November 18, 2016

    Jonathan Miller
    REIC Forum Moderator

  • #134 Reply

    AI November 30, 2016 email blast to members presenting the news to all chapters after the policy was already enacted – to take control of chapter cash. “This is great news for chapters.”

    View image of emailed announcement.

    Jonathan Miller
    REIC Forum Moderator

  • #131 Reply

    North Texas Chapter Board of Directors response to AI chapter policy.

    Jonathan Miller
    REIC Forum Moderator

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