REIC: Policies & Culture of the Appraisal Industry

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  • #86

    REIC Purpose (Updated 9-3-18)

    When I realized I hadn’t posted anything on this Real Estate Industrial Complex (REIC) site since February 2018 – when I became fully devoted to Appraiserville – I thought it would be a good place to archive Appraiserville commentary so research on the changing state of the industry would be easier. My new appraisal industry commentary will continue to be placed in the Appraiserville section of my weekly Housing Notes (subscribe here). Think of REIC as a catch basin for relevant Appraiserville content. The new content will continue to be published in Appraiserville every week and I will periodically copy it here so there is a running commentary with links to relevant documents all in one place.

    I know this is clunky but I have to get my appraisal report out by the end of the day.

    Background and Goals (Updated 2-19-2018)

    The purpose of this website is to help the appraisers and related industries enjoy transparency and begin to fix the problems that face the appraisal industry today.

    Up until recently, real estate appraisers have allowed others to speak for them, often to the appraisal industry’s detriment. With the proliferation of state appraiser coalitions and individual appraisers that were not intimidated by AI National’s threats to their membership, the messaging is beginning to work.

    At the onset of the financial crisis, I became dismayed at the proliferation of AMCs taking more than half of the appraiser’s fee without the consumer being made aware of it. It was also apparent that lack of leadership and poisonous internal culture at AI National was hurting their own members and the rest of the industry. AI National appeared to champion the AMC business model, proved by former AI leaders taking the helm of these companies. I left AI as an associate member years ago under Leslie Sellers after he led their exit from The Appraisal Foundation for reasons that still don’t make sense. In the fall of 2016, AI National decide to take nearly all local chapter funds in a dishonest way.

    This was the last straw. I clearly needed to write about the challenges of hard working appraisers faced every day.

    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 AI National across North America. A week later I followed up with Incredibly, The Appraisal Institute is taking chapter “excess cash” and charging them for the privilege. 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.

    After these posts went viral, many reached out to request I provide a repository for all the documents and information being shared via email throughout the industry. This site is that repository. It was originally focused on exposing the irrelevance, if not damage to residential appraisers as a result of the Appraisal Institute’s actions and lack of action on various issues. Once AI National was exposed in 2017 as largely irrelevant in helping residential appraisers succeed, this site expanded outside of AI National issues to also include a focus on challenges such as appraisal management companies and the appraiser’s ability to participate in the free market.

    Strangely, it is an exciting time to be an appraiser because this is our moment to create change after years of being beaten down by those with ulterior motives – and we are doing it largely on our own. At this point, we seem to be one of the few parts of the mortgage process that is interested in protecting the public trust aside from The Appraisal Foundation.

    Key challenges appraisers face every day:

    – The scourge of many appraisal management companies taking more than half the appraisal fees from hard working appraisers without disclosing it to the borrower.
    – Introduction of appraisal waivers by the GSEs in receivership to expand their credit box.
    – The opaque culture of inaction embedded in AI National, the real estate appraisal industry’s largest trade group.
    – The lack of the on-the-ground appraiser’s perspective within industry publications.
    – Learning about key governmental, organizational and institutional actions and what they mean to appraisers.
    – Be allowed to participate in the free market rather than as a widget in the AMC cost system.

    Here are my goals for this effort:

    1. Provide transparency to real estate appraisers to help them better understand what is going on in our industry.
    2. Present alternative logic and reasoning behind current actions or false claims by those biased against our industry.
    3. Reduce the Appraisal Institute’s damage to its residential membership.
    4. And of course, remain as neutral as humanly possible in order to preserve your trust and the public trust of our industry.


    1. I will copy all my Appraiserville commentary within my weekly Housing Notes newsletter on this website so it is all kept in one place (hence, a repository).
    2. Please keep sharing your thoughts on the industry. It is invaluable to me.

    Let’s continue to aspire for complete appraisal industry transparency.

    Jonathan Miller
    REIC Forum Moderator

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    • #8784


      November 23, 2018

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

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

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

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

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

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

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

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

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

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

      The intense lessons to be learned are:

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

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

      AMC Clarocity Cash Flow Shortages Funded by iLOOKABOUT

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

      And this press release:

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

      Here’s one take.

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

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

      Here’s the math:

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

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

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

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

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

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

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

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

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

      A deeper dive is coming next week.

      Jonathan Miller
      REIC Forum Moderator

    • #8783


      November 16, 2018

      Appraiserfest Recap

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

      Take Non-Appraisal Seminars

      Up your game – differentiate yourself from your competition.

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


      Jonathan Miller
      REIC Forum Moderator

    • #8782


      November 9, 2018

      Appraiserfest Has Your Back (And Your Teeth)

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

      What The Appraiserfest 2018 Conference Happening Meant

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

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

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

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


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

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

      – I finally got my own “G5”

      Cheaper = Less Reliable

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

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

      Banking Propaganda About Appraisal Services Ignores Keeping The Public Trust

      This is a super dumb interview, seriously.

      Jonathan Miller
      REIC Forum Moderator

    • #8781


      October 19, 2018

      Appraisersblogs Pushes Out Our Content For An Industry Under Siege

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

      Response (Part I): AI National Damaging Appraisers Livelihoods

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

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

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

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

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

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

      But I digress.

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

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

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

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

      What is a level playing field?

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

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

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

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

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

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

      Jonathan Miller
      REIC Forum Moderator

    • #8780


      October 12, 2018

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

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

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

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

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

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

      Industry feedback

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

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

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

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

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

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

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

      USPAP Confidentiality excerpt:

      An appraiser must protect the confidential nature of the appraiser-client relationship.
      An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential
      information and in the communication of assignment results.

      An appraiser must be aware of, and comply with, all confidentiality and privacy laws and regulations applicable
      in an assignment.

      An appraiser must not disclose: (1) confidential information; or (2) assignment results to anyone other than:
      • the client;
      • parties specifically authorized by the client;
      • state appraiser regulatory agencies;
      • third parties as may be authorized by due process of law; or
      • a duly authorized professional peer review committee except when such disclosure to a committee would
      violate applicable law or regulation.

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

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

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

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


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

      Mandatory reading for appraisers.

      More Skap v. Coester

      Appraiserfest is almost here!

      Signup now!

      Jonathan Miller
      REIC Forum Moderator

    • #8779


      October 5, 2018

      Appraiserfest 2018 is almost here!

      November 1, 2, 3 in San Antonio.

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

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

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

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

      From the NYT investigative piece…

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

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

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

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

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

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

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

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

      Here is what I wrote back in August about SB70:

      Here’s the biggie:

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


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

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

      But there is more:

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

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

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

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

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

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

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

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

      Here is some anonymous feedback from an appraiser in Texas:

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

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

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

      Jonathan Miller
      REIC Forum Moderator

    • #8778


      September 28, 2018

      38% Increase Into The Profession in Three Years

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

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

      Indirect Appraiser Pressure of The Daily Kind

      An appraiser shared this email from a mortgage underwriter:

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

      My response to the appraiser:

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

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

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

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

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

      Fannie Mae plans appraisal waivers for high-needs rural loans

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

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

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

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

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

      Can’t wait!!!

      Jonathan Miller
      REIC Forum Moderator

    • #8777


      September 21, 2018

      Reflecting On The Financial Crisis a Decade Later

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

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

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

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

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

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

      RAC Member Ernie Durbin Goes Mano a Mano With Phil Crawford

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

      Calling Zestimates into Question and Identifying Their User Addicts

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

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

      Read the piece in Realtor Magazine.

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

      Appraisal Institute is Working Hard to Fog The Rural Appraisal Narrative

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

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

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

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

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

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

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

      Appraisers Taking Exams Jumps 14% YTD 2017 to 2018

      This is fresh from the Appraisal Foundation:

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

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

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

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

      1. City of Santa Fe, New Mexico

      Purchase of City-Owned Property

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

      2. City of Salt Lake City, Utah

      Offsets to Impact Fees (18.98.070)

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

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

      Consolidated Zoning/Subdivision Ordinance

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

      More to come.

      Jonathan Miller
      REIC Forum Moderator

    • #8048


      September 7, 2018

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

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

      Prophet, Not Profit

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

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

      A New MAI Acronym Making the Rounds For Good Reason

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

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

      Those two definitions still remain in the appraiser-verse.

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

      “More Amorin Influence”

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

      Confusion about acronyms

      As quoted by an MAI in Florida

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

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

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

      UPDATE Friday 9/7/18

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

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

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

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

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

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

      Here are two examples in California:

      – The City and County of San Francisco []

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

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

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

      Biting The Hand That Fed You

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

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

      This is the 2018 lawsuit.

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

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

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

      Jonathan Miller
      REIC Forum Moderator

    • #8008


      August 24, 2018

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

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

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

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

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

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

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

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

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

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

      Here are some thoughts…

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

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

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

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

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

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

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

      Warning: lots of “spirited” inside jokes abound.

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

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

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

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

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

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

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

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

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

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

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

      Mr. Garber et al,

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

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

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

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

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


      Thomas E Allen, SCRP, RAA

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

      Jonathan Miller
      REIC Forum Moderator

    • #8007


      August 17, 2018

      AI National Pitches Their Own National Registry Without Telling Anyone

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

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

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

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

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

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

      AMCs Slow The Mortgage Process, Not The Appraisers Themselves

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

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

      AI President lays out their 2018 Goals From Their Bubble

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

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

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

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

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

      Jonathan Miller
      REIC Forum Moderator

    • #8006


      August 10, 2018

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


      The epic story of how a good appraiser got blacklisted.


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


      Next week!!!!

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

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

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

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

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

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

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

      Watch the video.

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

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

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

      This is not the way to run a trade group.

      Jonathan Miller
      REIC Forum Moderator

    • #8005


      August 3, 2018

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

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

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

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

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

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

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

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

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

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

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

      Here are some of my thoughts pertaining to specific issues:

      Here’s the biggie:

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

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


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

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

      But there is more:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

      Be sure to read their letter.

      Here is the North Dakota waiver letter.

      Jonathan Miller
      REIC Forum Moderator

    • #8004


      July 27, 2018

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

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

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

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

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

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

      Documents from Public Record:

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

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

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

      Jonathan Miller
      REIC Forum Moderator

    • #8003


      July 13, 2018

      This week is full to the brim…

      When Untrained Inspectors of Hybrid Appraisals Rule The World

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

      Calling On All Tennessee Appraisers To Take a Tristar Bank Selfie

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

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

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

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

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

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

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

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

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

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

      Signup now!

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

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

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

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

      2018 RAC Conference: Time Keeps on Slipping into the Future

      An Example of why CoreLogic’s Monopolistic Behavior is Concerning

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

      Polluting The Data Pool

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


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

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

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

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

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


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

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

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

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

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

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

      Jonathan Miller
      REIC Forum Moderator

    • #8002


      July 6, 2018

      I’m taking a quick three-day vacay with my wife in Nashville starting today so excuse my content brevity. I wonder if I should check out Tristar bank? I hear they falsely claimed there weren’t enough appraisers, let alone pilots…

      Appraisers as Big Ole Jet Airliner Pilots

      Doesn’t this sound eerily familiar? An industry screams “shortage” and then it is outed for not paying a fair wage. Pilots are blamed yet the skill required doesn’t match the compensation paid. The rules of supply and demand should apply to all industries.

      Jonathan Miller
      REIC Forum Moderator

    • #8001


      June 29, 2018

      Speaking Up for Ourselves

      Over the past couple of years, our residential appraisal industry has called BS on allowing others to speak for us. Our industry has chosen to speak for ourselves. It began with a few and it is snowballing. Just look at all the new appraiser bloggers in the links below such as Woody Fincham, Rachel Massey, Shannon Slater, Bryan Lynch, Jamie Owen and more. There has been a groundswell of attendance at AARO, TAF, and creation of the first appraiser-orientated conference Appraiserfest1!…and don’t forget RAC’s epic annual conference in September! I’m the outgoing president (wait, that’s a good pun). The strength and unsung actions of all the state coalitions have been invaluable and are ongoing. State appraisal board cronies with allegiance to AMCs are being outed. Regulators and GSEs are meeting with us directly these days. ASA has stepped up and filled in the void created by the long-ago departure of AI National from supporting the residential appraiser. We’ve gotten face time with state and federal legislators. We are speaking directly to state boards. We are more engaged with the Appraisal Foundation and have recognized and outed those that do not work in the residential appraiser’s best interests.

      I think we all recognize that our wakeup call doesn’t guarantee anything other than a fighting chance when so many want to commoditize us and have little concern for preserving the public trust.

      My heartfelt thanks to all of you.

      My Discussion with Bryan Reynolds of Appraiser eLearning: “Alternatives to the Traditional”

      We’re now in the “bright and shiny object” phase of appraising, exiting the “traditional” phase. Whats next? It was a great discussion and I appreciate the invite onto his platform to share my views.

      Voice of Appraisal: The American Society of Appraisers is coming to AppraiserFest 2018!!!

      Phil Crawford inserts some “peas and carrots” talk on OCAP too: “The American Society of Appraisers has become the official education sponsor to Appraiserfest 2018! Phil talks to John Russell about the ASA and the future of appraising. With so many things changing…the future looks bright!!! Phil also discusses the OCAP Summer Seminar and finally meets Jonathan Miller!! Plus, the “Skap” stops by to share the excitement!!!”

      Most importantly, the number of appraisers entering the profession is rising in Ohio.

      Super Dumb Observation of the Appraisal Industry By An Agent

      I recently read a Forbes Real Estate Council article by Jason Mitchell, “currently recognized as the #1 producing residential real estate agent in the state of Arizona.”

      First of all, the Real Estate Council is “pay to play” so this isn’t an emblem of credibility. I know, I was invited and saw the dues were ±$1,300 per year. Secondly, this guy says “currently recognized…” which I think means that he will say later on that he is “not currently recognized” or “used to be recognized?” At the bare minimum, he doesn’t understand that we are not appraising for the borrower in the examples he provides. He has a stunning lack of knowledge for a council member or agent. Like his profession, there are good appraisers and there are hacks and everything in between. I’m disappointed that Forbes allowed this drivel to appear with their brand.

      The Residential Appraisal Process Needs A New Standard

      AMROCK (formerly TSI) Is Very Concerned About Your Car

      You know an AMC product is low-balling your talents when they express repeated concern about your car (in blue).

      Applying the Cost Approach to AI Scott Robinson’s Excellent Adventure to Singapore

      Last week I wrote about for AI president Scott’s trip to Singapore and the more I thought about it, the more I thought I should tie a cost to it since its well known in the industry that the inner circle flies often to global conferences via first class when Rome is burning. And since residential appraisers are no longer advocated by this organization since leadership bypasses their own members and chapters to push evaluations on state legislators, I thought it would be a worthy exercise.

      I don’t want to be a wet blanket on the positive spirit that is emerging from the industry, but I do want to provide transparency to AI leadership’s behavior. Their pants are on fire and they continue to pretend they are an organization they are not. That’s the crime here.

      I don’t have access, nor does AI membership have access to the costs of these frequent trips by AI National leadership abroad so I thought I would spitball it. It is not broken out in their disclosures on their public facing website nor is it disclosed internally according to many members. I invite AI National leadership to send me an audited summary of all these trips as soon as possible so I get it right for your members. You do work for them, don’t you?

      Here is a hypothetical breakdown Scott Robinson’s trip to Singapore for IVSC I mentioned last week…

      $25,000 conference fee (AI isn’t a member)
      $20,000 for 2 round trip first class from Chicago to Singapore (not sure where he’s from so I picked their HQ location)
      $2,200 first class hotel for 2 ($724 per night for 3 days)
      $1,000 meals and entertainment for 2+
      $1,000 local transport + incidentals

      $49,200 total estimate

      I am told that the average annual dues for AI membership are $990. That means 50 members of AI National paid for this one trip ($49,200/$990). What is the benefit to membership when the organization is drifting away from the needs of its members and whose membership is in significant decline? I’m not saying some interaction with an international valuation group is out of the question but this seems tone-deaf and wasteful.

      I won’t go into the details of the two senior AI National executives that just went to Portugal in May (or the current president’s supposed trip to Germany earlier this spring) but the cost is about the same for tickets as Singapore – but with 2 AI leaders and their spouses, that’s $40,000 in airfare alone according to my math so this trip is probably more than the Singapore junket.

      I hate waste.

      Jonathan Miller
      REIC Forum Moderator

    • #8000


      June 22, 2018

      Thoughts On This Week’s OCAP Meeting Part 1 (Getting There)

      This past Tuesday, I was a keynote speaker at the Ohio Coalition of Appraisal Professionals (OCAP). I’ve always seen this organization as one of the stronger state coalitions in the context of getting things done at the legislative level. I had been looking forward to attending the Columbus conference for several months. Here is how I got there from New York to make my 10 am Tuesday speech.

      Monday afternoon
      – Drove an hour to the airport
      – Because of massive airport construction, took a shuttle bus to the terminal from available parking lot
      – Arrived at 12:30 pm for my 2 PM flight
      – Flight delayed every half hour or so because of software problems filing flight plans to midwest routes
      – Engaged with the airline on Twitter including direct messaging
      – Airline staff was courteous but not fully informed and missing from the gate for half the period we sat there
      – No other flights to Columbus were available during the day
      – At 8 pm I reserved a 5:55 am flight the next morning
      – After seven hours of delays, my 2 pm original flight was canceled at 9 pm
      – No working bathrooms in the terminal after a water main broke
      – No food left in the terminal due to all the delayed flights and airline didn’t follow their policy of providing food after the 4th hour of delays
      – Walked back through security and went to ticket counter to wait in line for 45 minutes until 10 pm confirm 5:55 am morning flight and received the ticket
      – Took the shuttle bus to my car
      – Drove for an hour to arrive home at 11:30 pm and went to bed

      Tuesday morning
      – Got up at 3 am and drove to the airport to arrive by 4:30 PM
      – Took the shuttle bus to the terminal
      – A massive line at security due to all the people that had re-booked morning flights after previous evening’s software glitch
      – TSA told me I would never make my flight because the line was over 90 minutes long so I needed to go to the adjacent concourse to go through security and take a bus on the tarmac back to the concourse and catch my flight
      – The precheck line moved one third the speed as the general line in the other concourse
      – Went to the gate to take the bus with 15 minutes before my flight left
      – Arrived at the correct concourse and ran to the gate and handed my ticket to the gate agent
      – The gate agent said they had issued me a ticket last evening for the prior day.
      – The gate agent had already logged out of the system and was about to close the plane door
      – Explained what happened and urged them to get me on the plane
      – One agent ran down the walkway to the plane and stopped them from closing the door
      – The other 2 figured out how to register me for the flight and told me to run with the new ticket to the plane and sit in the one remaining seat
      – I slipped into the plane and they closed the door behind me
      – Arrived in Columbus and spoke at the OCAP conference

      Tuesday afternoon
      – Arrived at Columbus airport at 6 pm for my 8 pm flight
      – Massive thunderstorm delayed my flight until 9 pm
      – Arrived back in New York and sat on the tarmac for a half an hour until the disabled plane was moved from our gate
      – Took shuttle bus to my car
      – Drove for an hour and was only two exits from my town and massive traffic foul-up turned into an additional hour to get home
      – Arrived home at 2 am

      But hey, it was worth it!

      Thoughts On This Week’s OCAP Meeting Part 2 (States That Allow Appraisers To Switch off USPAP)

      Spoiler Alert: NONE

      After I made my presentation, I listened to the next speaker from the Appraisal Institute. I was startled because the speaker said there were about 5 states that currently allow certified appraisers to turn off their USPAP compliance and about 5 more that were to follow them soon including Virginia. I texted and emailed a number of my coalition and regulatory appraiser colleagues and spoke with several OCAP board members. No one was aware of any of this.

      Now if any of you know my good friend and appraiser Pat Turner of VACAP, you know that we would all have known this by now. The Virginia law that Scott DiBiasio of the Appraisal Institute sneaked in at the last second to sidestep VACAP got passed against the wishes of nearly all residential appraisers in Virginia. But it was immediately neutered as explained in the following summary.

      I reached out to The Appraisal Foundation (TAF) and was given this summary of all state activity on this issue. In other words, NO STATE has effectively agreed to this.

      Here is the information I received from TAF as a direct quote:


      The Appraisal Foundation is aware of AI-promoted activities regarding evaluations in the following states during 2017 and 2018:

      Florida: After two years of failed attempts before the Florida Real Estate Appraiser Board to change regulations to allow alternative standards and evaluations without complying with USPAP, AI was successful in getting state law changed to allow appraisers to follow the Interagency Guidelines “and other standards as prescribed by the Appraisal Board.” (See Florida 475.612(7)) In April, by a 7-1 vote, the Board decided to proceed with developing a rule that requires Florida appraisers to follow USPAP regardless of assignment. At the Florida Board’s June meeting, AI raised a procedural issue and demanded reconsideration, so a workshop on the issue is scheduled in August.

      California: The bills before the CA legislature have gone through several iterations of carving up USPAP. The original version during this legislative session gave appraisers six exemptions to compliance with USPAP. The current version (See SB 70), that has not passed but is likely to in the coming weeks, is whittled down to a single issue. It allows CA appraisers to not comply with USPAP’s requirements regarding intended users of Restricted Appraisal Reports. The section of this new law has a sunset date of Jan 1, 2020 (to coincide with the effective date of USPAP 2020-21). AI leadership has stated that if the ASB’s current exposure draft concept of an appraisal report is adopted, the CA law will be moot (as will all their efforts regarding evaluations).

      Kansas: After failing in 2017, AI once again attempted a legislative effort this year that would have allowed evaluations to be performed in conformance with USPAP or the AI standards. Opposition included the Kansas Appraiser Board and the Kansas Chapter of AI. The bill died in committee on May 4, 2018. (See KS HB2414)

      North Carolina: After a failed attempt in 2017 by AI in the state legislature regarding exemptions to following USPAP for evaluations and certain other transactions (See North Carolina S576 and H431), AI requested that the state appraiser board take up the issue. The legal staff of the board subsequently ruled that the board did not have the authority to enact such regulation.

      Virginia: Legislation passed in 2017 that would allow appraisers to perform evaluations without adhering to USPAP. But subsequent legal analysis by the Virginia appraiser board determined that the definitions of appraisal and evaluations were too similar so the board determined that appraisers must still comply with USPAP regardless of assignment type. (See Virginia Real Estate Appraiser Board Guidance Document issued 5/16/17). New legislation was then introduced to clarify the definition of evaluation (See Virginia HB 1453) It passed and becomes effective on July 1, 2018.

      Texas: The Texas Board has proposed a rule for public comment (See 22 TAC §155.3) that they promote “to implement federal law raising the threshold under which an appraisal is not required in a commercial real estate transaction.” The proposed rule would allow Texas appraisers to prepare evaluations in commercial real estate transactions with a transaction value of $500,000 or less without complying with USPAP as long as they include a specific disclaimer as spelled out in the rule. The staff’s request for emergency adoption was unanimously denied by the Board; the rule has not been adopted; the public comment period is open (see the 4/23/2018 TACLB Meeting Record/Video, Items 20 and 22).

      These are the only states we know of with legislative activities during 2017 and 2018 regarding evaluations. The Appraisal Foundation has no government relations staff, so we acknowledge there may be others about which we are not aware. We appreciate the appraisers and regulators who brought these activities to our attention as they sought help fighting what they described as senseless acts that are harmful to the profession. We also recognize that there are some states whose appraiser laws and regulations only apply to federally-related transactions (FRTs) as defined by the federal financial institution regulatory agencies, but their statutes have been in place for years. Evaluations do not come under the definition of FRTs.

      We have also been in public settings where AI has referenced Georgia and Tennessee when speaking about evaluations.

      Georgia: Georgia has a rule adopted in February, 2013 regarding evaluation reporting formats:
      Ga. r. 539-3-.04: If the Evaluation Appraisal is prepared for a nonfederal financial institution and said institution is not regulated by a federal financial institutions regulatory agency, and if USPAP compliance is not required by said institution for the appraisal reporting format, then the Evaluation Appraisal may be prepared in any reporting format, such as, but not limited to a self-contained appraisal report, a summary appraisal report, and a restricted use appraisal report if the reporting format meets the requirements of the nonfederal financial institution.

      Tennessee: Tennessee appraiser laws last updated in 1994 do not apply to evaluations but also do not prohibit appraisers from doing an evaluation as long as it is marked on its face, “this is not an appraisal.” (See Tenn. Code Ann. § 62-39-104). At a recent Tennessee Board meeting (see January 2018 meeting video recording starting around 1:06 through 1:20), the members and audience participant discussed evaluations and lamented that the Board has no jurisdiction over those who do them – nor does any other body – so it is bad for public trust.

      How AMCs Will Work Around Non-Disclosure States To Get Sales Data

      AMCs are starting to require sales lists from appraisers. On the surface, it looks like they are merely trying to see what other sales there are, but this isn’t a reasonable intention since they can get the data easily elsewhere…except in a non-disclosure state. It sure looks like they are using you to get sales that are not publicly shared. That seems to be worth a massive extra fee for your reports, no? And then I wonder, is this legal in the spirit of our engagement and the laws of the non-disclosure state itself? Seems largely deceptive to me.

      Appraisal Institute Sends Scott Robinson to Singapore Because, Well, I’m Not Sure

      AKA, Where in the world is Carmen San DiegoScott Robinson?

      On Monday the former AI President is speaking about “Fundamentals of Separating Real Property, Personal Property, and Intangible Business Assets” at the INAUGURAL IVSC-WAVO GLOBAL VALUATION CONFERENCE 2018 in Singapore.

      I have a few questions:

      – How does this help falling AI National membership?
      – How does this stop the declining state of the appraisal industry in crisis?
      – At what point will feedback from this conference be shared with members or adapted for pragmatic use?
      – How does this feedback help the AI Membership in any way whatsoever?
      – AI National has abdicated their leadership position in the U.S. in recent years so how can they influence valuation worldwide?
      – Did Scott fly first class halfway around the world and bring a friend or spouse on AI membership’s dime?
      – How many of these conferences do AI presidents and past presidents attend and then how many of those trips are done with first class accommodations for travel, meals, and lodging?
      – How much do these activities cost and where is the specific line item in their budget?
      – Why aren’t AI members kept in the loop about all paid trips by their executive committee?

      Lack of accountability corrupts. And I hope its members wonder about this when they get the bill for next year’s dues.

      And shouldn’t we all wonder why AI National keeps pushing for evaluations when its residential members are overwhelmingly against them (except those who have sights on future trips to Singapore)?

      One more thing: It has been 10 months since CEO Grubbe left unannounced in the middle of the night. How is the executive search for a replacement of this ±$400,000 position going?

      Coester Chronicles: A True Hack

      I’m no lawyer but the following excerpt from public record (Pacer Monitor) reads like Coester’s counsel admitted his client Coester (an AMC we’ve been covering here for a while) hacked an appraiser’s email (Skapinetz).

      Don’t confuse Fannie Mae’s appraisal waivers with banks request to the ASC for APPRAISER certification waivers

      From my friend and appraiser Ernie Durbin clears up the confusion.

      In the case of the ASC, requests were made in Tennessee and Oklahoma by banks that indicated they were in markets that were underserved by appraisers. These banks requested the ASC to temporarily eliminate the requirement for a certified or licensed appraiser to complete valuations. The efforts failed, but had they succeeded, the banks would still be required to value the properties in those valuations would have to comply with USPAP. The “waiver” requested of the ASC was not to eliminate appraisals but the requirement that these appraisals are completed by state licensed or certified appraisers. It really makes no sense… If you have to comply with USPAP, why not use a certified or licensed appraiser? Thankfully, the bank in Tennessee lost in their request and the bank in Oklahoma back out.

      In Fannie Mae’s case, they are applying a full appraisal waiver. What used to be called a property inspection waiver they are now referring to as an appraisal waiver. They utilize data inside of CU and from other sources to determine the value of the property and then apply other credit risk analysis to determine which properties qualify for the waiver. That is why Fannie Mae will only apply appraisal waivers in densely populated areas where previous appraisal data and other property information is abundant. Urban and suburban areas, where properties are very similar and have had a number of recent appraisals in the marketplace, are more likely to be eligible for their appraisal waiver.

      On another note, at the recent TAF meetings, Julie did indicate that Fannie Mae appraisal waivers represented approximately 10% year to date, down from the 12% she reported at our Real Property Forum. While this may seem like a decrease, remember that the 12% was on an annualized basis in the 10% from this year did not capture the most robust season of the year, late spring and summer. My guess is they will be at or above 12% when all of 2018 is considered.

      So in summary, the difference is waivers before the ASC applied to LICENSED OR CERTIFIED APPRAISERS and Fannie Mae waivers APPRAISALS themselves.

      Jonathan Miller
      REIC Forum Moderator

    • #7999


      June 15, 2018

      Get Rich Quick? No, Go Out of Business


      I saw that you registered on our site so I wanted to send you a quick email with some info on our program!

      We would just ask you to go out to a property, take at least 4 exterior photos of the home and answer a short yes/no questionnaire, about 15 questions. It’s not a BPO and we don’t ask for any values or comps. I’ve attached the questionnaire and a set of sample photos.

      We pay $25 per completed order and pay out once a month, the checks get processed on the 5th business day of the month and pay out for all of the previous months orders.

      Turnaround time for orders is 2 business days. You would pick an address you would like to work out of and would also choose your own radius in miles (10 miles minimum) you would be willing to travel from that address. You would get an alert that there is an order available and can pick and choose the orders you would like to complete for us.

      Please let me know if you are interested or have any more questions. Thanks!

      Fannie Mae Has A Landing Page for Appraisers

      They are now working to better communicate with our industry. We now have a landing page on the Fannie Mae site.

      Bookmark it.

      Also, the page contains a link to their new selling guide. This is where you can find their appraisal policy. Back in the day, I used to maintain their three-ring binders with periodic updates via US mail.

      Ranting: When VA Appraisers Screw Up

      My best friend from high school happens to be a very good appraiser. One of his strengths is that he is extremely meticulous in his approach to valuation which doesn’t align with the general AMC universe emphasis on cost and speed without emphasis on quality. He once took apart his mid-70s Pontiac Trans-Am to the individual bolt level. Yes, down to the bolts. My memory of this is that he only had about dozen bolts left when he put the car back together but he denies this. 😉

      In this AMC low fee world and a family to support his skills don’t match the new reality so he flips foreclosed properties and does well at it. His home flipping business really leverages his local market expertise.

      In one particular case, he reached out to me because he was very upset. He needed a sounding board.

      He was selling a house and a VA appraiser low balled it. As a seller, my friend really has no recourse other than to report this person to the state or move on to the next deal. He can’t go to the bank and of course, the buyer would be happy to pay less. This appraisal cost my friend about $20K for no reason whatsoever. He even sent the appraiser something like 17 legitimate comps out of desperation and the appraiser hung up on him. This was a unique property that was renovated and compared with wrecks that were “plussed up” without support because they were of similar configuration – this guy couldn’t think out of the box. I get the insulation from influence part, but do we have to insist on saving our ass because it’s easier? How about getting it right?

      I’m not going to share all the photos and comps and appraisals he gave me to show his value logic value but I’ve shared his letter – if you know my friend who wears his heart on his sleeve – is a good read.

      When I met the appraiser at the property, he said he had seen my work before, and said I was very thorough. When it is my money on the line, I tend to overdo it. I apologize to the readers up front, as there is probably way more information here than is needed, but I saw many inaccuracies in this report. With all due respect, the appraiser did not have much to choose from in the way of suitable comparables within the subject’s immediate neighborhood. He said this lender would not allow detached homes to be used as comparables. I can understand having guidelines asking to refrain from detached homes, but the vast majority of the homes in the neighborhood are detached, so it would make sense to include a few detached homes and make adjustments for the detached versus semi-detached configuration. The appraiser did not bracket the sales price, and the comparables have artificially pulled the value down. Comp 4 sold for less than 59% of the subject’s contract price. I was going to save this comparable for a later discussion, but let’s just get it out of the way now.

      Com 4 – Why he chose this comparable stumps me. It exhibits a lack of knowledge of the Hagerstown market, although I believe he knows the area better than what is represented in this report. Ridge Road is noted as being 0.62 miles from the subject, but that is as the crow flies. Google maps have the distance as 1.6 miles going south or 1.9 miles going north. It is in an industrial area on the other side of the railroad tracks, in a far inferior neighborhood. I know it well, as I purchased a house a little over a year ago at auction for $19,000 and was happy to sell it at wholesale to an investor/ landlord friend. Most of the street is tenant occupied, and there is little pride of ownership in the neighborhood. Furthermore, this comparable is adjacent to a busy road with a transformer station on the other side, with another busy road south of it, and railroad tracks and industrial facilities along that road. I took pictures of the homes across the street to compare with homes on the subject street. I spoke at length with the listing agent and found that it had been a rental for 15 years, and had to be fixed up just to get it to sell. It was a bare minimum updating, and I got access to inspect personally, with pictures attached. The kitchen was the bare minimum, with only a stove and refrigerator and minimal cabinets. No CAC. A gravel path for off-street parking, no pavement. No garage, No finished Attic. No finished basement. Some peeling paint, remnants of graffiti. Please take a look at the photos to compare to subject and neighborhood.

      Comp 1 – 521 Guilford Avenue is indicated in the MLS sheet as a renovated duplex, and is the most logical comparable, as it is located in the same neighborhood and one block away on the same street. I had viewed the listing pictures previously when I was evaluating my property at 629 Guilford. To confirm what I had interpreted, I knocked on the door of 521 on June 4. I met the owner, and we talked about the property for a little bit. She invited me in and showed me the “renovated” home. She believes that this was the seller’s very first flip, and he did not know what he was doing. The first floor is lower end LVT vinyl tiles, glued to wavy floors. She reported that all of the floors are not level, and it feels like the whole house is sagging. The ceiling has staple tiles, not drywall or plaster. There are some plaster or drywall walls, but many of the walls are a very thin ¼” paneling which has been painted. It showed well in the MLS pictures, but the walls are very flimsy. The kitchen looks very nice, with nicer granite counters than my brand new faux granite Formica counters. She said that the cabinets look nice, but were very non-functional. The drawers were very narrow, and you could not put a silverware tray in them. She said the dishwasher hose broke away because they used the wrong clamp and it dumped dirty water all over the kitchen floor within the first week. She also said the appliances were not new but did work. There is no half bath on this floor. The rooms are much smaller, due to a foyer partition in the living room. There is a paneling covered HVAC ductwork intruding into the middle dining room. The ductwork was not done properly so all of the air from the air conditioning goes directly to the middle room and does not get distributed through the house. The HVA C system is reported to be new.

      Keep in mind that 629 Guilford has beautifully refinished wood floors, refinished by a professional floor craftsman. He indicated that these floors looked great, and he said he had not seen any better railing and Balusters with this age home. He refinished all the treads with stain. The 521 comparable that we’re examining had been painted over, including the wood treads on the stairs, which are already wearing off and scuffing.

      Heading up the painted stairs, we get to the second floor which has lower end carpet throughout the second floor. The subject property has parquet floors which have been refinished in the hallway, wood floors in the laundry room, and carpet of a medium grade with good padding in the two bedrooms. The two bedrooms are significantly smaller, due to the makeshift closet configuration in these rooms. The middle bedroom has a closet which is not deep enough to hold clothes on hangers. The closet was made out of paneling and has an outlet inside the closet. The owner reports that the closet had a clothes rod installed when she first viewed the property, but it had been taken down when she purchased the property. She later discovered that it was because the closet was not deep enough to actually hold clothes hangers. This bedroom does not have the built-in shelves that the subject property has. The front bedroom also has a makeshift closet and the shelf hangers had pulled out of the wall. They were screwed directly into ¼ inch paneling, and would not hold anything. The bathroom is a different configuration than the subject property. It has a nice double vanity with a new fiberglass tub and shower unit. Looking closer, she discovered after she purchased the house that the plumbing was not done correctly and she can pull the spigot away from the tube, as they used flexible piping and did not secure the spigot. I am thinking that water is running behind the tub when the shower is used. The outlet for the bathroom is at the other end of the sink, and cannot be accessed easily, as it is behind the door. The light switch for the bathroom is actually outside the bathroom door in the hallway. There is a new resilient floor. The laundry room is in the same location as the subject property, although it is not as large due to the unusual configuration of the bathroom. The commode area extends into the laundry room.

      Heading upstairs to the third floor which is also finished but as a narrower roofline with essentially seven feet wide area with at least 5 feet in height. There is no closet in the room. Furthermore, the way the stairway configuration is set up, you cannot get any reasonably sized pieces of furniture into this area. The only real furniture she could bring up was a large bean bag that would make it past the stairway railing. The subject property has a different railing, as I could see furniture access problems. My contractor set two by two pickets from the floor to the ceiling which can be removed as needed with a couple of screws per picket. This provided the safety of a railing, with the ability to remove them completely for furniture egress.

      The basement is accessed with a cheap, sticking door (no knob) and stairs down to the unfinished cellar. Unfinished is being kind, as the exposed stone walls provided a very low ceiling, which is less than 6 feet high in some sections. I presume it is a dirt floor which has been covered with black plastic. The HVA C system is in the basement, as are the water heater and electric panel. There is no walk-up exit from the basement to the exterior. I would not have included this as a basement. The stone foundation is likely responsible for the sagging of the structure above
      The entrance to the property has been redone with 5/4 nosed decking boards, which the owner complains are kind of wonky and crooked, and she is not sure how long it will last. This porch is significantly smaller than the subject’s porch. I did notice that there are some retaining walls on the front. I thought these were 4 x4 landscaping posts, but it is actually 54 nosed deck boards screwed to the outside of some small posts. It should not be long before these are pushed away from the posts, as they are on the outside of the post. These walls really have no ability to retain any kind of pressure. I believe is only a matter of time before the boards are pushed away from what they’ve been screwed into. I believe it looks nice for the time being. There is a very narrow walkway between the next house, as opposed to the subject’s shared driveway providing space and sound buffering. There is an alley access for this comp property with 2 off street parking spaces. They’re not as convenient as the subject, as there is a little bit of a yard unit between the parking and the house. There is a concrete patio and the two balconies. Only one was mentioned on the subject property.
      The owner also reported that the property needs a new roof. This problem was overlooked, and she has one bid at $13,000, which I believe is high.

      In short, comparing the condition, amenities, quality of construction components and workmanship, size of rooms, and parking options to the subject property leaves a lot of room for upward adjustment. I believe that the only superior features that this property has over [the subject] is granite kitchen counters and a nicer bathroom vanity. Virtually everything else is equal or significantly inferior.

      Comp 2 – Rougher neighborhood, commercial and multifamily across the street, billboards adjacent to the property, busier road, one way, 2.5 stories plus basement. Ony 6 pics in the listing. Called owner. See exterior pics.

      Comp 3 – I appraised this house for the purchaser’s lender. It was updated, but not nearly to the extent of the subject property. Contracted a year ago, why use it? Not even in the subject’s neighborhood. Compare views of multifamily buildings, run down, no landscaping in sight. See attached pics and compare with the subject street.

      Comp 4 already discussed.

      Comp 5 – Under contract for the 4th time. I talked with the listing agent at length but could not get access. The first contract fell through for home inspection issues. 2nd backed out because purchaser did not want stairs? 3rd fell through because purchasers wife never liked it, and they were able to get out after the purchasers’ credit check failed (intentionally?). 4th is still moving forward. This was priced low to move it, recognizing that it is located on a very busy road and backing to a strip mall. See pictures to get the full effect. This is not just a busy road, it is the main thoroughfare through this side of town with a median strip and 2 lanes of traffic each way. Fire, ambulance, trucks, etc. Behind is a struggling strip mall.

      I am running out of time to get data back for the value dispute. I have provided 17 suitable comparables in a grid. My adjustments are different than the appraiser’s adjustments. $25 / ft for GLA is way too low, but it does make a pretty appraisal. This area seldom has comparables that fit within the net and gross adjustment guidelines, unless you avoid making adjustments. That is the easy way out. I have not had time to cross-check features and condition, and the adjustments are rough. I wanted to get something out.

      I am always available to discuss the subject and any of the comparables with anyone involved in this transaction.

      The VA appraiser did not really understand the comps he relied on and that’s unfortunate.

      Jonathan Miller
      REIC Forum Moderator

    • #7998


      June 8, 2018

      The Appraisal Foundation Hosts National Appraisal Forum to Discuss Appraisal Waivers and Hybrid Appraisals

      “Preserving the Public Trust”

      I really got a lot out of this week’s joint meeting with IAC and TAFAC of The Appraisal Foundation that took place in Arlington, VA. I represented my appraisal firm Miller Samuel at IAC (Industry Advisory Council) and RAC (Relocation & Consultants) at TAFAC (The Appraisal Foundation Advisory Council) and I’ll be sharing new insights on these and other topics in the coming weeks.


      Appraisal Waivers – Both Julie Jones of Fannie Mae and Scott Reuter of Freddie Mac spoke about the waiver concept. On the whole, I feel much better about the GSE’s intent from their presentations. They’ve been offering appraisal waivers for more than a decade but recent efforts were ramped up and widely touted (and widely criticised). Their market share of loans with an appraisal waiver is a little under 10% so of course, the fear by most appraisers is that it is a slippery slope and soon all appraisals for Fannie Mae and Freddie Mac loans would be waived. The FNMA explanation was that if market share were to increase beyond 10%, their credit box would have to be expanded and that is a difficult process, requiring approval by their regulator FHFA (Federal Housing Finance Agency) [Expanding the credit box would relate to many issues including loan-to-value and property types]. In my view, they have been trying to entice lenders to better match their underwriting interpretation of risk with the actual risk out there. Lenders have lost their appetite for risk with the exception of some recent easing. With the economy strong and some consensus building for a recession by 2020, I find it hard to see a significant expansion of the FNMA credit box if at all, at least in the near term. [However, appraisal waivers are included in FNMA mortgage transactions because they are disclosed at the loan level and there is room for growth.] Therefore it would follow that the expansion of appraisal waivers would be unlikely. [Incidentally, the GSEs have to report to FHFA every quarter on any outliers, i.e. why market share expanded for certain loan types.] On another note, I don’t think the understanding of the AMC impact to loan quality has been properly [adequately] exposed because the GSEs can’t distinguish between AMC appraisers and non-AMC appraisers.


      Hybrid Appraisals – An analyst for Moody’s spoke about hybrid appraisals that rely on a separate inspector rather than the appraiser. There has been little adoption observed in the securities markets. Moody’s knows of only one deal that included hybrid appraisals in some of the loans of a portfolio and there is no apparent impact yet on portfolio pricing. This deal had nothing to do with the GSE portfolios. Moody’s perspective was that portfolios include broker price opinions (BPOs) and they are more comfortable with appraisers being involved in the process. However Moody’s along with S&P and Fitch missed the housing bubble, thinking they could mitigate all risk but were using the wrong data to feel comfortable. My takeaway is that there is no real data or precedent to base risk decisions on this new product at this time and their biggest concern was the lack of standardization of separate inspectors for this product. The Fannie Mae waiver product is confusingly inserted into this line of thinking yet Fannie Mae appraisal waivers are not part of these portfolios. If their use becomes prolific much like AMCs have grown to dominate the mortgage appraisal industry, I start wondering about the expanded misplaced quality assumptions built into the bond market. In other words, bond pricing is likely appraiser-quality influenced and with 80% to 90% of all retail mortgage appraisals going through AMCs, up from 10% in before 2009. This lack of AMC understanding as it relates to the value of mortgage collateral for securitization should make regulators nervous. What is going to happen to the bond market, whose mortgage collateral that is largely tied to AMC quality (which are generally poor) when the quality issue finally becomes more front and center.

      Appraisal Institute Roams The Halls of Irrelevance in DC – Despite being denied re-admittance to TAFAC for not agreeing to honor the TAF mission statement, Scott DiBiasio of the Appraisal Institute continues to attend Appraisal Foundation meetings like this week’s, trying to insert influence and assert AI’s presence despite its current industry irrelevance. The more feedback I get about their actions, the more I am convinced they have some sort of private agreement with REVAA (Real Estate Valuation Advocacy Association) to encourage the industry adoption of evaluations despite pushback from their own residential members. Time will tell but as history has shown us, they don’t share these types of things with their members. Afterall, it took members a decade to get AI National to admit and disclose their deal with FNC. Residential appraisers I know – who are and are not AI members – continue to scratch our heads wondering why they are so unnaturally and over-enthusiastically supportive of demeaning our profession to enable us to do $25 (and I have heard of $7 to $12) evaluations as if that serves their members best interest. No logical reason for their over the top enthusiasm has been shared. To date, AI National has had no success on the state legislature level nationwide with this agenda that is unsupported by their members and in fact, I heard AI just lost its bid to enable appraisers to switch on or off their USPAP licensing requirements in Florida by a 1-7(?) vote.

      A Better Day Ahead Through Collaberation – I had several appraisers at the conference mention to me that the mood in this regulatory body was noticeably more upbeat. The elimination of the constant AI National-fueled drama was no longer poisoning the collaborate efforts of stakeholders. That makes sense. Jim Park, director of the Appraisal Subcommittee (ASC) spoke to the joint TAFAC and IAC group and said that the only way our profession moves forward is in a collaborative way. I totally agree with that observation. It would be great to see AI National be a part of that but sadly that can’t happen if the current leadership remains and they continue to ignore the needs of their hard-working residential members.

      Jonathan Miller
      REIC Forum Moderator

    • #7997


      June 1, 2018

      The Term “Appraisals” Bleeds Into The Term “Evaluations”

      One of the reasons the appraisal industry has been so upset with our former industry leader, The Appraisal Institute, is that they don’t realize that they are destroying the meaning of the word “appraisal” by championing lower cost alternatives to appraisals, that actually are appraisals. It’s the organization’s tragic flaw and why they are now essentially irrelevant. Hopefully, that will change but its really up to the residential and commercial membership to champion new leadership.

      But I digress…

      This is why:

      Here’s an “evaluation” product that is ordered as a “new appraisal assignment” for a lowball fee. The appraiser had two hours to respond and then it rolls over to the next appraiser on their list. Robo-ordering these evaluations to hundreds on an approved list is what the Appraisal Institute has helped make possible. Think about that.

      Then think about your time. If the going rate for an appraisal in your area is $450 and you are willing to do an evaluation that perhaps takes half the time (just guessing and assume you are ethical) yet retains all the liability, is a fee reduced by 83.33% worthy of your hard earned years of expertise? Are you really just a form filler or are you a valuation expert?

      It’s Been More Than 9 Months: How Is The Search For New Appraisal Institute CEO Going?

      On August 24th, AI’s CEO Frank Grubbe resigned overnight without warning. It was announced then that second-time AI president Jim Amorin was to fill in as acting CEO until December 31, 2017. That date has come and gone without any notice to members as to the status of the search through their newsletters, website or emails that I am aware of. So much for transparency. It was widely held that once Grubbe had left the organization, the toxic culture he had either caused, enabled or allowed would subside.

      No evidence yet.

      AI used the executive search firm Tryon & Heideman LLC to find a replacement. At no time was an application filing deadline shared with the public on either the executive search site or the AI site that I can find.

      I’m not a member of the Appraisal Institute but a few members I asked have reached out to have scoured the site and don’t see any information about it, not even a landing page. A little over a week ago, the Appraisal Institute removed mention of the search for the position from the home page. Since no deadline date was presented on the AI site, I can only assume that removal of the announcement from their home page was an indication that the search has ended.

      Let’s recap:

      – Pervasive toxic political culture still dominates the organization
      – August 2018 CEO resigns overnight without warning after 11 years
      – Two-time AI president fills interim CEO position
      – Interim CEO position expires December 31, 2017, without discussion
      – Announcement of CEO search removed from AI Home Page in May 2018
      – Description of CEO position remains on executive search site without application deadline date

      (Hey, how’s that residential committee doing?)

      It is time for the AI membership to hold leadership accountable (you know, the group I’m told that regularly flies first class with their wives all over the world to attend valuation conferences and don’t share what they learn with the membership).

      You need to contact your local chapters and put pressure on Chicago leadership to actually attempt to be transparent. If you don’t this organization will never recover, let alone survive, from its current state of irrelevance.

      Appraiser “Accounts Receivables” Alert: CoesterVMS One Step Closer to Death?

      Coester Chronicles Continued…

      On May 25, 2018, Myriddian LLC filed a “Confessed Judgement” request against Inc. Yesterday (May 31, 2018) the Baltimore County Circuit Court granted the “Order of Confessed Judgement.” Myriddian LLC is owned as a sole proprietorship and functions as a government contractor. The owner is Merlynn Carson, daugher-in-law of Ben Carson, current HUD secretary. This action, based on the earlier legal link, might be interpreted to mean that the creditor filed on behalf of the debtor to shortcut a lengthy litigation process.

      Here’s a screenshot of the details.

      And an explanation found on

      This series of actions does make me wonder if CoesterVMS borrowed a lot of money from the Carson family and then defaulted. Given Carson’s proximity to the HUD cabinet secretary, this seems big league and ominous for the future of CoesterVMS, a notorious AMC. Appraisers who continue to work for them, despite all the available information about this AMC, that remain insistent on working for them: You’ve been warned.

      Note: It’s not how much revenue you make as an appraiser that counts, it is how much you get paid. Over my career, I’ve always been amazed at how many in our profession seem to forget this basic rule of survival.

      Jonathan Miller
      REIC Forum Moderator

    • #7996


      May 18, 2018

      Rationalizing accepting $50 to $100 hybrids ’cause you’ll get volume

      Here’s the sales pitch being sent to appraisers:

      MCSV is currently offering a distinct hybrid product to our clients that involve a restricted report.
      We would like to extend our hand – beyond the product types that you already cover, to determine if this is something that you would be interested in.

      I have provided useful information and attachments below regarding the RESIDENTIAL EVALUATION REPORT (RER).

      An RER is a restricted appraisal report that involves a Broker Price-Opinion completed by one of our BPO vendor/Brokers for the purpose of providing an inspection – as interagency guidelines require evidence of an inspection. If the BPO completing agent happens to provide some credible data that an appraiser finds useful in their appraisal development that is fine. Appraiser is expected to develop an opinion of value in accordance to USPAP standard 1. We provide AVM’s and sales data when available and this data could potentially be adequate to provide a credible report. That is up to the appraiser to make the determination. Again, this is a desktop appraisal product with an inspection. When the client places an RER order, we engage a real estate agent or broker that works in the immediate area of the subject property. They will visit the subject property, take photos, and describe their observations about the subject property’s condition and features. They then complete a Broker Price Opinion or Competitive Market Analysis. The BPO or CMA report, including the inspection information is provided to the appraiser along with AVM’s and alternative sales in the area. The appraiser reviews this information and any other information that the appraiser needs and has available to develop the appraisal.

      The BPO report and other data that has been provided to the appraiser would not be considered as appraiser assistance. The scope of the appraisal assignment is for the appraiser to complete the appraisal report as a desktop. Inspecting the subject property is not within the scope of work for these assignments. The scope of work determines what is and what is not appraiser assistance. Any information used in the report is data, not appraiser assistance. To illustrate, let’s take a more familiar example, the scope of a 2055 exterior appraisal report is to inspect the subject property and the comparable sales from the street. Other information such as size, year built, room count, etc. will be used from other resources deemed credible by the appraiser to use in the analysis with an extraordinary assumption that the information is correct. If someone who is not the appraiser does the exterior inspection for the 2055 exterior assignment, they are providing appraiser assistance, because an exterior inspection is in the scope of work for the appraisal assignment. The county assessor providing the property sketch, square footage, room count and the listing agent that described the subjects interior condition on a recent MLS listing are providing information that the appraiser may be using, but they are not providing appraisal assistance because measuring the property and inspecting the interior of the property are activities that are outside of the scope of work. Again, if it is a task the appraiser must perform because it is in the scope of work and it is performed by someone other than the appraiser, the appraiser must disclose it as appraiser assistance. Any task that is outside of the scope of work would not be performed by the appraiser therefore would not be appraiser assistance. I hope this answers any additional questions you may have.

      There is some room to negotiate the fee based on the market rate other appraisers charge for the product, the scope of work, complexities, and time involved.

      We have access to 94% of the MLS systems nationwide and our access to public records is even higher. We provide any relevant data in the subjects’ area that we have available including AVM’s and sales. We also organize and present the data using 5 different perspectives. When there is a lot of credible data, appraisers are able to quickly develop their appraisal opinion using these tools. When the data is more limited and more efforts need to be made to research, it could take much longer. The fee that will be quoted to you is the base fee. If you are assigned an order that will take a lot more research than typical, you are welcome to come back to us with a fee quote.

      Another advantage to including a BPO report is that it gives you access to someone that buys and sells properties in the subjects’ specific market area. If you are assigned an order in an area that you are less familiar with you can contact the broker/agent directly and associate with him or her to help gain competency.

      The Data entry for the RER is only a free form text box and a place for you to put your value opinion. As far as filling out the form it is not labor intensive at all.

      We are experiencing an increase in volume in your state and would greatly appreciate your participation. We also strive to keep our RER panel smaller to help increase individually assigned volume. If this at all makes sense in your business model, we could certainly use a good appraiser in your area. I would encourage you to sign up. If at some point you decided it is not working for you, you can withdraw without any effect on your regular work for MCS Valuations.

      No wonder the Appraisal Institute is pushing evaluations at every public forum out there: You’re future is based on $50-$100 assignments, not the $25 assignments you thought were coming. Boom times?!?!?

      Some appraisers might think you can bang out dozens of these products per day. I contend that you’ll end up doing 1 or 2 if you are actually doing credible work versus form-filling. Am I way off here?

      Take a look at the information and forms you’ll deal with – good grief.

      RER-Appraiser Signature
      RER Appraiser Facing Presentation
      RER Sample

      Someone familiar with this told me that $50-$100 is now the value of your certified signature and wondered how E&O Insurance providers will view these assignments? Are they even covered in the current insurance binder?

      Seems like a legitimate concern.

      Don’t Ask, Don’t Tell About “The Weed”

      My son is a police officer and when they smell weed on a traffic stop it enables them to search the car. Appraisers are being placed in the awkward position of not reporting something that they see during the inspection. This Corelogic work around seems very awkward to me. The again, I’m not appraising in Colorado. Thoughts?

      Jonathan Miller
      REIC Forum Moderator

    • #7995


      May 11, 2018

      Tindell v. Murphy, Cal. Court of Appeal (2018)

      Here are the documents from the case shared by Peter Christensen, General Counsel, LIA Administrators & Insurance Services:

      On May 7, 2018, the California Court of Appeal, Third Appellate District certified for publication its recent decision in a case entitled Tindell v. Murphy. The case involved mortgage borrowers who sued a real estate appraiser blaming the appraiser for a purchase they made in 2005 at the peak of the real estate bubble. The trial court had dismissed the borrowers’ suit because they were not intended by the appraiser to use the appraisal, as the appraisal was prepared for the lender, and the Court of Appeal upheld that decision in a straightforward opinion. However, the opinion was not originally slated for publication, meaning that it would not serve as precedent for cases involving other appraisers.

      While it was a straightforward decision, an effort was made by Peter as well as the Northern California Chapter of the Appraisal Institute and the National Association of Appraisers to enable this case to be published so it could be used as a basis for future appraisal litigation.

      One key issue here that helps limit the liability to appraisers – in a mortgage appraisal, we aren’t responsible to the homeowner directly since they are not an intended user of the report.

      Feedback: AQB/AARO Spring Conference, Seattle, Washington May 2018 – Peter Gallo

      Here are appraiser Peter Gallo’s notes from the conference. I have placed a sampling of them below. His fill notes are a good summary of the issues appraisers are facing today:

      – “There is also a focus on redefining the term “inspection” as hybrid appraisals and other alternate valuations address an inspection differently from what the current definition describes.”

      – “The Appraisal Subcommittee (ASC) also gave a brief update and talked about the Tennessee bank appraiser waiver request that had been denied, saying that they had received 166 public comments including several from appraisers who worked with the bank that requested the waivers. The final order denying the waiver request has been posted to the federal register.”

      – “There was an update on AQB Certified USPAP Instructors. There are currently 432 instructors which is down 8.3% from 2017.”

      – “time was spent on the changes to the Real Property Appraiser Qualification Criteria and PAREA. The Board emphasized that the reduction in the criteria was not a result of or in response to any “shortage” or pressure from any groups. The sole purpose was to eliminate barriers or hurdles to entry into the profession.”

      – “The Board is currently speaking with and searching for education providers that can assist them with the development and approval of these practicum courses. Board members emphasized that the new generation of appraisers learn in a different way and that technology and simulation can be used to generate real life scenarios that can replace actual experience and that “boots on the ground” is not necessarily the only way to go in the new world of learning.”

      – Scott [Reuter] from Freddie Mac began the session with graphs depicting demand for appraisals, loan volume and the number of active appraisers showing the correlation between these factors. There were some interesting overlays that were shown including that trainees were mostly involved in appraisals being used for purchase transactions. He showed that while appraiser capacity or the number of active appraisers were somewhat steady over the years, there were spikes and valleys in the demand for their services and some of the spikes well outdistanced the supply of appraisers. He did review their property inspection (appraisal) waiver program and the factors that went into their use. There is a joint GSE (Fannie & Freddie) effort to redesign the current appraisal form (1004) underway. He described the current form as “archaic” and that they are in the first quarter of the first year of a three-year effort to revise the form (so they are at the very beginning of this process). They are considering all options including that there might not be a form at all, but it could even be some sort of online schematic or portal for a give and take of information. He said that the will be a lot of outreach to stakeholders and the pursuit of modernization will involve a lot of listening. He also mentioned that “big data is here to stay”.

      – Jim Murrett from the Appraisal Institute was next to speak, and he discussed the thresholds that had been raised as well as evaluations which banks would like appraisers to perform. He said that there are huge amount of evaluations being done and that they are easier for appraisers to complete them outside of USPAP. He described USPAP as something that is mostly a guideline for regulators and that appraisers are more than capable of working outside of USPAP and still developing a reliable/credible report.

      – Sharon Whitaker with the American Bankers Association gave a brief presentation that included a focus on how everything was being done online in their world and it has happened in a very short period of time. There are no more paper forms, everything is done by logging into online systems. She said that disclosures were also now being completed online and that the requirement for disclosures of fees with minimal allowances for changes put pressure on all to abide by tolerances.

      – “There was a discussion of a need for more consistent training where different supervisors train differently and practicum classes will create a more uniform experience for the trainee. AQB stated that experience is not seen as that critical to training and that the exam is the “gatekeeper” to demonstrate competency. AQB reminded the audience that their requirements are only meant to be a “minimum”.
      There was also discussion of the “trainee” nomenclature and that the AQB criteria allows for other names to be used, that there is not requirement to use the word “trainee”.”

      Jonathan Miller
      REIC Forum Moderator

    • #7994


      April 27, 2018

      Phil Crawford Provides Updates on Appraiser Fest!

      Listen to the podcast (you should be anyway!)

      ASA leads opposition to TriStar Bank waiver request

      That’s the headline from Valuation Review. Looks like ASA has better PR than AI National these days.

      Jonathan Miller
      REIC Forum Moderator

    • #7993


      April 13, 2018

      The Core-Facebook-Logic Consumes Us A La Mode

      This has been a tumultuous couple of weeks for Facebook. I’ve never been a heavy user of it, mostly a lurker. They constantly change navigation paths making it nearly impossible to update your settings frequently – and when you do, do you really trust them? I’ve always seen them as the “dark side” much like Mac lovers see PCs and Appraisers see CoreLogic. We all know by now that when you use something that is free, then you are the product. This was never more apparent when hearing Zuckerberg’s testimony before Congress this week – his long-term tactic since Harvard has been “its easier to apologize than ask permission.” There’s a great read on Quartz: 14 years of Mark Zuckerberg saying sorry, not sorry

      But now with other developments such as CoreLogic buying the dominant software provider in the appraisal industry with over 50% market share, a la mode, plus FNC, Landsafe, Dataquick and others, big data and big paydays seem to always come from the backs of frontline appraisers. CoreLogic powers a large share of MLS systems now through their Matrix software. How can that not be some sort of data grab from real estate agents? Likewise, how can the a la mode purchase not be a data grab from appraisers? I’m all ears.

      As for the a la mode decision to sell to CoreLogic, it is a free country and this is capitalism in action. If I were Dave Biggers, the founder of a la mode, looking at a giant payday and a stagnating user base, I’d find this offer hard to turn down. Corelogic has a reputation for paying whatever it takes to acquire someone which makes me think the end game is bigger than the sum of the parts.

      We use a la mode and I even provided testimonials for them in 2012, but now I am conflicted, and since we are heavily invested in their software, to leave at this moment doesn’t make economic sense. But this action opens my eyes to looking at alternatives, which are already cropping up, after the dominant appraiser form software brand, blinked. They will need to prove to appraisers they are not going down that path. This seems like a tall, if not impossible and improbable order. But our industry reaction isn’t about the seller. It’s about the buyer – what CoreLogic plans to do with this purchase, aside from the sterile press releases.

      And Zuckerberg got a much higher hourly rate than I ever have on the witness stand as an expert. He constant use the terms like “I’m sorry” and “we didn’t know” are things I’ve never said on the witness stand. If I did, perhaps I could bill at $1.5 billion per day? Just a thought.

      Jonathan Miller
      REIC Forum Moderator

    • #7992


      April 6, 2018

      It’s Time to Change the Narrative

      My friend and data management savant Mark Stockton penned a great article on statistics being tossed around by the major players in the valuation industry is misleading. Mark, Phil Crawford and I got to talking about this topic after reading a recent Appraisal Buzz article: Evolution in the Industry. Well intentioned I’m sure, but presents a tired and misleading message that I interpret as “embrace technology for the sake of technology” as if the default position on technology is that it always is “better” than the alternative.” The reality in valuation is that most of it is crap, but the big dogs in the space have a vested interest in making this 100% about automation.

      Here’s Mark’s article:

      It’s Time to Change the Narrative

      According to Fannie Mae:
      “Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.”

      This is a very nice, neat definition to describe something that is extremely elusive.

      In his introduction to “The Adverse Effects of Single Approach Appraisals and Single Point Valuations” (Recognizing and measuring the market impact of volatility in residential real estate purchase prices and valuations), written in 2015 by Bill King President, Chief Valuation Officer at Real Info, Inc., he states:

      “Real estate markets are imperfect markets; we should expect a certain lack of precision when measuring both sale prices and appraised values. Even in the most homogeneous neighborhoods, no two properties are truly identical, and no two buyers operate with the same information or motivations. Value, like fairness, is in the eye of the beholder. Values concluded in residential appraisal reports are said to be “in error” when those values disagree with actual sale prices. Closed sale prices are believed to be the best evidence of market value as defined in the federal register. While there are many studies of the error rates in appraised values, there are few studies of the error rates in sale prices.”

      Mr. King performs several analyzes in order to draw conclusions about error rates in sale prices. Among them, he looks at sales for a subset of homes that, “Aside from minor differences in maintenance and upkeep…are nearly as substitutable as stock certificates.” He observes price differentials reaching nearly 15% in a single month.

      Among his conclusions:
      “a purchase price variance of up to 10% should be expected when all other factors, including buyer ability to pay and overall motivation to buy are otherwise the same.”
      “Price variances must be expected because ultimately, there really is no one true market value number to the exclusion of all other numbers.”

      (Bill King has more than 35 years of housing industry experience, including work as a senior executive, qualified forensic expert, speaker, trainer, author, appraiser and real estate broker.)

      Fannie Mae’s definition of market value does not state that sale price equals market value. As Mr. King’s analysis makes abundantly clear, real estate markets by nature are imprecise, and the correlation between sale price and true market value can be difficult to reconcile. However, sale price is the benchmark most often used to test the accuracy of real estate valuation models.

      Every national valuation company that utilizes automated valuation technology represents their value estimates are accurate, within certain parameters. These accuracy statistics are generated in blind testing where value estimates are compared to actual sale prices (sometimes contract prices and appraised values, as well), and differences are reduced to a percentage of error.

      By way of illustration, “Zillow’s accuracy has a median error rate of 5.6%”, according to their website on June 15, 2017. The site elaborates on this statement: “This means half of the home values in the area are closer than the error percentage. For example, in Seattle, Zestimate values for half of the homes are within 5.4% of the selling price, and half are off by more than 5.4%.”

      Those of us who deal with real estate analytics on a day-to-day basis recognize that statements like these are entirely misleading. When the market itself is less than exact, how can one expect value estimates benchmarked against sale prices to be predictably accurate?

      We need to change the narrative from a discussion of accuracy to a discussion of “defensibility”.

      A valuation provides an estimate or opinion of value. The accuracy of that estimate cannot be conclusively determined from a mere representation of precision, unaccompanied by documentation that adequately supports that statement. The results of a test which compares value estimates with sale prices might seem reasonable at first blush, but we know without reservation that sale prices are not precise measures of “market value”. If our target or benchmark value is inexact, how can we make definitive statements about the accuracy of estimates that are compared to those values?

      In addition, accuracy statistics published by valuation companies relate to tests performed on large sets of data; they are not granular enough to be meaningful at the property level. It is doubtful that someone living in Houston, TX cares about the statistical accuracy of values computed for all of Harris County. They likely are concerned with the accuracy of the value estimate for their home – and they won’t get that from the valuation company.

      On the other hand, if each valuation is accompanied by thorough documentation that allows the recipient to understand with complete transparency how the value was derived, the recipient can then form an educated opinion as to the reasonableness of the value conclusion. If they can form an opinion about the value conclusion – whether they agree with it or not – the estimate becomes a useful tool that can be used in a decision-making process. Otherwise, it is useless.

      So, while the results of tests performed against large volumes of sale prices are useful to the analysts who strive to improve their valuation models, they have little or no application for those who are concerned about the accuracy of individual home values, or groups of values as might exist in a portfolio.

      Defensibility is key to understanding whether a value is “accurate”, i.e. reasonable in light of supporting documentation. We need to move away from the absurd reliance on accuracy rates we know to be false, and move toward reliance on definitive, factual documentation that allows us to form an honest opinion about the reasonableness of value estimates.


      The second to the last paragraph is powerful so I’ll repeat it:

      So, while the results of tests performed against large volumes of sale prices are useful to the analysts who strive to improve their valuation models, they have little or no application for those who are concerned about the accuracy of individual home values, or groups of values as might exist in a portfolio.

      FHFA: AMCs Provide No Contributory Value to the Mortgage Appraisal Process

      In reference to the damning FHFA white paper published last month, Phil Crawford breaks it down on his Voice of Appraisal Podcast: E196 The AMC Report Card…OUCH!

      Jonathan Miller
      REIC Forum Moderator

    • #7991


      March 30, 2018

      What A Time We’re Living In!

      One of the great things about the changes being seen in the appraisal industry today is through the actions of appraisers themselves. Appraisers are speaking out more often and pushing their thoughts about the industry and the techniques of the profession out into the ether. And most of all, these actions are causing change.

      – When Tristar Bank of Tennessee lied about the shortage of appraisers in their request to lend without appraisers, an often fragmented industry unified to call “BS.” One of the biggest pain points of the industry has been Appraisal Management Companies for fighting through their REVAA trade group to keep borrowers in the dark about who gets what part of the appraisal fee.

      – Some of the biggest appraisal-related publications were criticized for never giving appraisal industry coverage the perspective of the appraiser, these publications responded by reaching out and including appraisers in their content more often.

      – A number of appraisers have been frequently sharing their knowledge and insights to the appraisal industry narrative in a “can do” spirit that I find contagious. Ryan Lundquist, Tom Horn, Rachel Massey, (have I missed any other notables?!?!)

      – Appraisers have relentlessly fought the misleading narrative provided by appraisal management companies over the appraisal shortage, their lack of emphasis on quality, their drag on turn time and their increase in the cost of an appraisal. And as new blogger but experienced appraiser Mark Skapinetz so eloquently articulated in his first blog post: What’s not in your wallet?

      From My Experience I wonder If AMCs Add Weeks To The Appraisal Process?

      Despite being approached all the time to add our firm’s name to an appraisal management company, decline. However, when wealth management companies were forced by their parent company, they made arrangements to help attract better firms like ourselves to consider working with them:

      – Pay our fee
      – Respect our turn time quote
      – Not inundate us with clerical addenda requests

      Last fall we were approached by 4 different AMCs because their wealth management clients demanded they fix the problem of not attracting the better appraisers in their coverage area.

      In the first three that onboarded us, we got a lengthy addenda request that included things like inserting the “floor” level” of the office address of the client in the report. I’d push back and request a conference call with all the parties and to their credit, they rethought the review process and we rarely see addenda anymore and when we do, its fair. That’s how it should be.

      It also proves a very significant point – most of the laundry list items included in addenda requests are either over-interpreted or simply made to justify the AMC’s existence but on our time and money. They are not regulatory requirements that is claimed when appraisers give pushback.

      The fourth of these firms finally on-boarded us and our appraisal timeline looked like this:

      Day -3 – assumed it took 3 days to find a cheaper appraiser since it was ordered as a rush (borrower wasn’t in a hurry)
      Day 0 Rush appraisal requested
      Day 0-5 days borrower allowed access
      Day 5-8 we delivered report 3 days later as quoted
      Days 8-13 reviewed by AMC
      Day 13 – AMC delivers a 30 point review of clerical fixes that had nothing to do with the multi-million dollar valuation
      Day 14 – I send an email to both the bank and AMC requesting a call to discuss review process. AMC responded that chief appraiser would review
      Day 15 – no response yet

      By my math, this is a 18-day process although we don’t have a response yet. The appraisal part only took 3 days as a rush.

      Here’s a redacted partial (admittedly terse) response – “if [XXXX] continues to apply this approach to the high-end review function, we will no longer continue to accept assignments or will simply triple our fee quotes to reflect the incredible amount of time needed to complete the requested clerical busy work.

      I’d be happy to discuss this issue with you and members of the [XXXX] team to resolve this relationship…Let me know how you would like to proceed. We’d love to continue to work for you and I’m sure your high-end clients would like for you to continue to rely on our services.

      We don’t have this issue with lenders we deal with directly.

      AMCs Are There For A Bank To Say They Checked A Compliance Box

      I ran out of time to write about the FHFA paper on the appraisal process. I’ll elaborate next week. It’s important.

      Are Appraisal Management Companies Value-Adding? – Stylized Facts from AMC and Non-AMC Appraisals [FHFA]

      In the meantime, I’ll share my appraiser friend and colleague’s tweet on the topic:

      Jonathan Miller
      REIC Forum Moderator

    • #7990


      March 16, 2018

      The Appraisal Foundation Position on Tristar Bank Waiver Request to ASC

      I’ve written about the Tristar bank request many times here in Appraiserville. The first time I wrote about it, I “translated” their request letter into what I thought they were really saying. You might want to read the December 1, 2017 article: The Appraisal Waiver “Slippery Slope” Becomes A “Cliff”

      Hot off the press, here is today’s The Appraisal Foundation Tristar position letter to the Jim Park at the Appraisal Subcommittee on the controversial appraisal waiver request. Tristar Bank’s request to temporarily waive appraisals is a hotly discussed topic in the industry with no one seemingly coming to Tristar Bank’s defense. John Brenan of TAF lays out the case to ASC with the following headlines and I inserted snippets of his letter I thought were most important:

      – Those who cannot remember the past are condemned to repeat it. “Less than 30 years ago, a significant number of federally insured financial institutions failed, due largely to risky lending practices that resulted in the taxpayers of this country paying billions of dollars to bail them out. These practices incorporated the utilization of appraisers who were not required to meet minimum qualification criteria or adhere to minimum appraisal standards…The regulatory system established as a result of FIRREA has been very effective and, while imperfect, serves its intended purpose in protecting the federal deposit insurance funds (and thereby the public).”

      – Lack of available appraisers: fact or fiction? “In its waiver request and supporting documentation, TriStar claims between 2013 and 2017, the “wait time” to receive appraisals has doubled and the cost of appraisals has increased by 78.5%. However, the number of licensed and certified appraiser credentials increased by 28% since TriStar opened its doors, including an increase of 6.5% from 2013 to 2017, the same period TriStar analyzed.”

      – Full circle. “If TriStar’s contention of unavailable appraisers cannot be substantiated, it begs the question, “Why are they requesting a waiver?” TriStar’s own request appears to provide the answer, and that is increased profitability. While such a goal is not, in and of itself, problematic, placing profit before safety and soundness is. This intense desire for increased profit is exactly what caused financial institutions to fail in the 1980’s, and it took an act of Congress (and several billion taxpayer dollars) to save them, and to develop important safeguards to protect them from self-serving risky practices going forward.”

      To be clear, Brenan’s letter stated the following in bold: “The Foundation urges the ASC to deny TriStar’s request for a temporary waiver of appraiser certification and licensing requirements.”

      House Canary Won a $706M…Not In A Coal Mine

      If you were wondering how long startup House Canary funding would last as they try to break into a shrinking appraisal industry with new analytics and tools for appraisers, you can stop at least for now. They approached me when they started to provide product feedback. They seemed to be comprised of a lot of very nice, smart people. House Canary just won massive damages from Title Source Inc. It’s not clear whether there will be an appeal and this will be the amount paid out, it would seem to enable funding for many years.

      About that name, aside: Thinking of the hit song “Canary in a Coal Mine” by the band The Police makes me shake my head at this corporate name. It makes me think of the use of canaries to detect toxic gas leaks in coal mines. Every time I hear the name, I think of appraisers risking death in a dirty, underground, misunderstood industry, yet this company couldn’t be further from that in its intent. Certainly there must be an insider joke for this name choice?

      Imagining Holiday Family Dinners At the Blackledge Home

      In the case Mark Blacklidge v. Kent Blacklidge, the court ruled, and the subsequent appellate court agreed, that the son needed to pay back his father $40,623.55 for fees owed in their appraisal practice. Aside from basic ethics and morality concerns, what will be son’s the reputational damage in the appraisal community and their clients?

      Jonathan Miller
      REIC Forum Moderator

    • #7989


      February 23, 2018

      BREAKING: David versus Goliath Redux: Skapinetz versus Coester – Case Direction Favors Underdog

      Court Refuses to Dismiss Lawsuit That Coester and His AMC Hacked Appraiser Mark Skapinetz’s Emails

      My colleague and friend, Georgia appraiser Mark Skapinetz, sued COESTERVMS.COM, INC. and BRIAN COESTER in the U.S. District Court for the District of Maryland last year for hacking his email account. Here is the evidence submitted. Coester subsequently filed a motion to dismiss. On February 9th, U.S. District Judge Paula Xinis Denied The Motion to Dismiss for 3 of the 5 claims and the lawsuit will move forward.

      I find this whole matter very compelling – especially with Brian Coester & Co. representing the most prevalent and controversial AMC model – begins to crack. You know, the one where the mortgage applicant pays an “appraisal fee” at time of application, not knowing that the actual appraiser gets 50% or less than that market-rate fee. Brian Coester – with a trail of bad press, pushing the false narrative of an appraisal shortage and good PR as a charitable fundraiser protected by industry media gets “caught” by an independent fee appraiser for hacking the appraiser’s email. You get a better gauge of the Coester legacy when you read this Appraiserblogs post: Scheer Motion to Dismiss Coester vs Scheer Lawsuit

      Why does this process of outing the bad AMC players take so long? Al Capone was brought down for tax evasion rather than what he actually did for a living. Is this situation, aside from the gambling, prostitution, bootlegging, bribery, narcotics trafficking, robbery, “protection” rackets, and murder part, any different?

      Based on Skapinetz’s success in convincing the court to proceed on the meat of the lawsuit, I suspect this is going to result in a substantial settlement that CoesterVMS may or may not have the funds to pay. To all appraiser vendors of CoesterVMS: you may want to take a look at your accounts receivables for this client and start calling today.

      Here are some documents in the Skapinetz v. Coester matter. They are all fascinating reads.

      MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER [Original 2017 Complaint]
      MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER [Evidence in 2017 Complaint]
      MARK SKAPINETZ v. COESTERVMS.COM, INC. and BRIAN COESTER [2018 Denial of Motion to Dismiss]

      Jonathan Miller
      REIC Forum Moderator

    • #2255

      More on Tristar Bank’s Appraiser Shortage Lie to Waive Appraisals

      From the Tennessee Appraiser Coalition…

      In response to Tristar’s poorly conceived request to let them waive appraisals to save their customers money, falsely claiming there was a shortage of appraisers, the Tennessee Real Estate Appraiser Commission and a consortium of appraisal organizations used facts in their response to the ASC, requesting that ASC deny their request. This article on the Appraisal Institute website explains the implications of a waiver request.

      – Response to TriStar Temporary Waiver Request from Randall C. Thomas, Chairman
      Tennessee Real Estate Appraiser Commission [PDF]

      – Temporary Waiver Request of TriStar Bank from 20 U.S. appraisal organizations [PDF]

      On another note, I have heard that the second waiver request by City Bank and Trust out of Oklahoma at the end of last year was withdrawn. I am told that there was a lot of pressure from Oklahoma appraisers who, like Tennessee, exposed the appraisal shortage fallacy.

      See a pattern here? When appraisers speak for themselves, they get results. Times are changing folks. Keep at it.

      Jonathan Miller
      REIC Forum Moderator

    • #2254

      The Second Appraiserfest Trailer Gets Released!

      “THIS IS NOT AN EVENT…IT’S A HAPPENING!” November 1, 2, 3 in San Antonio Register now to take advantage of the early bird specials and get all the details of the “happening.”

      The video is Phil Crawford’s long-awaited inspirational take for appraisal professionals who largely have been beaten down for most of their careers when all they are trying to do is the right thing and protect the public interest.

      Jonathan Miller
      REIC Forum Moderator

    • #2253

      New AQB Requirements Remove College-Level Course Requirements from Licensed Residential Candidates

      This change in appraiser qualifications is effective on May 1, 2018. It is important to note that the AQB sets the minimum requirements. The 54 states and territories have to decide whether to reduce the standard or not. It is important for appraiser applicants to always confirm their own state requirements.

      Here is the summary of changes from the Appraisal Qualifications Board of The Appraisal Foundation. [PDF]

      While I do not disagree with this action, let us be clear that it in no way solves the challenge of attracting new appraisers into the profession. The problem is purely economic and in the residential arena, the problem sits squarely on the shoulders of most appraisal management companies. By many AMCs taking 50% to 70% of the appraisal fee paid by the mortgage applicant, the financial incentive to join the profession is eliminated. Who can afford to work below cost? Oh, and REVAA pushes to hide the breakout of the fee to the consumer so they won’t know that their payment goes toward the administration the appraisal process and not to the person estimating the value of their most important asset.

      Economics matter. Respecting the forces of supply and demand matter. Whats the draw for a new appraiser if they can’t make ends meet but the consumer has no idea this is happening?

      [click to open]

      Jonathan Miller
      REIC Forum Moderator

    • #2252

      Lori Noble Goes All Twitter On Us In Her Fight For Appraisers

      Housingwire’s new issue focuses on valuation – and has as of late – consistently included the appraiser vantage point in their coverage. Thank you Housingwire.

      Lori Noble was interviewed by Jacob Gaffney in the current print version, conducting a Twitter interview. Way to go Lori!

      Jonathan Miller
      REIC Forum Moderator

    • #2251

      First, it was “appraisal shortage” waivers and now it may become “rural appraisal shortage” waivers

      Either way, they are both misleading narratives (i.e. lies) to help the many in the AMC industry rationalize not having to pay the market rate and lobby their Congressional representatives.

      It has always been challenging to find rural appraisers and it is no more difficult now than it has ever been. The reason it has always been a challenge was economics. One appraiser covering a wide area with a thin dataset with the client forcing them to conform with “average fees” and average turn around times. This proposed solution allows lenders to lend on properties where no neutral valuation was established. If this passes, I may consider buying a rural home and then refinancing it for 100 times what it is worth – no one needs a pesky appraiser nosing around. What could go wrong?

      From Dave Towne…


      If you work in Rural Areas [that definition is referenced in (b)(1) below], your appraisal livelihood is threatened by this pending bill in Congress.

      This bill, if signed into law, will allow lenders to bypass appraisals for any property with a ‘transaction value’ of $400,000 or less (this is moving the de minimus goal post) if the lender was unable to find an available appraiser to complete an appraisal “within a reasonable amount of time” …. that time frame apparently as determined by a [regulatory] agency with jurisdiction over the lender. The bill shows ‘exceptions’ to this as per other laws.

      Appraisers working in rural areas who are affected by this bill should IMMEDIATELY start communicating with your state Senator. Plus, you should continue to monitor the [billing] process in Congress.

      This is the link to the bill, which was introduced on 11/16/2017 by Senator Mike Crapo [R-ID]:

      A hearing was held on 1/30/2018 by the Committee on Banking, Housing, and Urban Affairs. The [website] does not show what action was taken at this hearing, or the current status of the bill.

      The text of the portion of the S. 2155 bill affecting EXEMPTIONS FROM APPRAISALS IN RURAL AREAS:
      (I have added red type and underlines to key points – although the Yahoo forums won’t display this)

      Dave Towne

      Jonathan Miller
      REIC Forum Moderator

    • #2250

      Fannie Pulls Back Requirements on Field Reviews

      Here’s the first Selling Guide Update for 2018 (h/t to Tom Allen) Fannie is waiving their requirement for field reviews on properties over $1 million.

      I have some thoughts on this decision since our Manhattan housing market has a median sales price of just over $1 million. This ruling would have made sense to me years ago when appraisal quality was reliable and credible. This was before AMCs and desktop reviews accounted for 90% of residential mortgage lending and the work I have seen here really sucks. Out of market appraisers are the norm and they are appraising these properties without much local market knowledge (we do not have an MLS). And now reviews are being done by those same AMCs. So the data embedded in the desktop approach is contaminated and probably generating false positives.

      Here’s the announcement:

      Currently, we require a field review (Form 2000 or 2000A) on properties valued at $1,000,000 or more when the LTV, CLTV, or HCLTV ratio exceeds 75%. The purpose of this requirement was to mitigate the perceived risk of overvaluation on properties with high appraised values. Based on our analysis of field reviews, and advances in property valuation due to the use of Collateral Underwriter® (CU™), we are removing this requirement for field reviews. CU and the independent risk assessment it provides and other tools and advances in managing appraisal quality, enable us to mitigate this risk.

      Effective Date:
      Lenders can take advantage of this change immediately. The field review messages will be removed with DU Version 10.2 (weekend of March 17, 2018). Until that time, lenders may disregard the messages.

      Jonathan Miller
      REIC Forum Moderator

    • #2249

      The Fall Appraiserfest Conference in San Antonio Promises To Be The Residential Appraiser’s Counterculture Answer to The Current Dull and Boring National Norm

      As the current president of RAC, I am quite proud to say that our last two annual appraisal conferences have been the best I’ve ever attended in my 31+ year appraisal career and it’s not because I’m biased (ok, maybe a little).  They were thoughtfully produced and provided high-quality content.

      The evolution of 27 state coalitions to date with more coming and an alternative national appraisal conference that doesn’t overemphasize Appraisal Management Companies is the new way to help front-line residential appraisers be informed and make a living that has risen from the inaction of the old guard.

      Appraiserfest 2018

      Mark your 2018 calendars for November 1, 2, 3

      We hope you can make it!

      Here’s the first video cut of the conference announcement.

      Jonathan Miller
      REIC Forum Moderator

    • #2248

      Old Guard Continues to Lead AI National Into Oblivion By Not Understanding What Happened in 2017: Jim Murrett

      The latest edition of Valuation Review came out this week (I am a subscriber) and the cover story was an interview with Jim Murrett, the 2018 President. The interview quote struck me very hard because it made me sad that nothing has changed at AI National:

      “In May 2016, the Appraisal Institute announced a three-year strategic plan to address challenges and opportunities facing the organization and the real estate valuation profession,” he said. “We are continuing to implement that plan. AI also continues to enhance its reputation and leadership across the country and around the world by expanding its thought leadership.

      1. “Taking” Chapter Funds The 2016 Strategic Plan wasn’t fully disclosed to the membership as evidenced by the late 2016-2017 outrage after AI National leadership’s “pre-authorized by the board without sharing with membership in advance” vote to take nearly all chapter funds. This literally was a pre-planned looting of local members hard-earned and long-saved funds so that AI executives can continue to lead a lavish professional lifestyle. By saying they are “continuing to implement” means they are still planning to take nearly all chapter funds. To AI National, the money is clearly needed to offset the combination of rapidly declining membership, high salaries (guess how much Jim Amorin makes as interim CEO?), expensive and oversized Chicago office space and of course many, many trips (for years) to Europe and China via first class with spouses – to attend valuation conferences around the world while Rome is burning.

      2. Kicked out of TAFAC, Ostracized by the appraisal industry as irrelevant Aside from being rejected 2:1 by TAFAC membership, AI National received widespread criticism by its members in 2017 after realizing their leadership was “taking” chapter funds for no justifiable reason. AI National created the false optics of forming a residential committee to look into why they have fully ignored residential members for over a decade yet that committee already positioned itself to take a long time – it is run by the Old Guard. The committee was formed a year ago, and nothing has been accomplished to benefit the residential membership. The only leverage AI National still has is to threaten designated members who speak against them. The problem with their autocratic tendencies is that the value of their designation brands has diminished significantly over the past decade reducing their power.

      3. Old Guard is fully insulated from everyday appraising AI National top-down leadership style receives no direct feedback from their membership or chapters (outside of aspiring member politicos/wanna-be insiders) as evidenced by how AI National routinely approaches state legislators without notifying the local chapter boards in that state – largely because AI National actions wouldn’t be accepted by those local members.

      AI is also keeping a close eye on the many regulations and policies affecting appraisers. Some considered a bit “archaic” and clearly not keeping up with the changing times and appraisal environment have been widely addressed and officially discussed by way of direct testimony before Congress.

      Their continued efforts – at what must be a significant expense (Does Scott DiBiasio get to keep all his travel miles?) – to undercut The Appraisal Foundation by promoting $25 evaluations and especially by misleading Congress in the fall of 2016 about regulations and the false “appraisal shortage” narrative that has been proven overwhelmingly false. In reality, they have so little outside contact with the front line of the industry that they probably don’t have any idea it was proven false and that Jim’s quote is embarrassing.

      “While it’s impossible to predict what will happen in Washington, the Appraisal Institute is optimistic that Congress will address regulatory modernization this year,” Murrett told us. “Perhaps now more than ever, we see the need for an overhaul of the current U.S. appraisal regulatory structure as appraisers are crushed by a stack of growing, outdated rules and regulations. Regulatory modernization is an opportunity to fix a broken system.”

      The above quote is basically a lie, reflecting their self-serving agenda – probably to get their hands on the $13 million in annual appraiser registry fees administered by the Appraisal Subcommittee.  Those funds are needed to solve their pending financial crisis of declining membership and unabated spending – if the chapter “taking” doesn’t happen fast enough.

      What reasonably intelligent person out there thinks that confusing the marketplace with evaluations that allow switching on and off an appraisal license depending on the assignment – in a compressed fee environment – is to the appraiser’s benefit?  Our largest industry trade group is irresponsibly diluting what we do in the eyes of the public.

      When will the Appraisal Institute begin to work for the benefit of the appraisal industry and not themselves?

      The new president looks like he is running things on autopilot. His PR comments are already a disservice to the hard-working AI members who pay AI National dues.  Active AI members have to be asking themselves, why am I paying for the slow destruction of my livelihood with self-serving absentee leadership?

      I am not looking to see AI National go under soon as is their current trajectory. I simply want the appraisal industry to fully recognize what AI National really is:

      1. A threat to the residential appraisal industry’s future.

      2. A very real distraction from progress during our “moment” to influence our future.

      What other professional services industry has had to not only fight for its survival but fight our largest trade group at the same time?

      Good grief.

      Jonathan Miller
      REIC Forum Moderator

    • #2247

      In the Appraisal World, The Expertise Only Gets Ten Percent of Fee

      An Indiana state certified appraiser based in Indiana who is also certified in other states including Georgia did an evaluation of a number of properties in Georgia. The “appraisal fee” was $250 but the AMC (Clear Capital) got $225, and this appraiser got $25 for each evaluation. I’ve blocked out the specifics of one of the orders except for the fee – in this disclosure form required in Georgia.

      In other words, the administrative fees for Quality Assurance, Broker/CMA fee, Home Data Index Fee (whatever that is) and of course, the all-important “Data entry fee” is many multiples more important than actual valuation expertise.

      Key Points:

      1. The administrator (Clear Capital) gets 10x more to do administrative work than the valuation expert.
      2. The valuation expert is not a valuation expert because real local market experts can’t afford to accept evaluation requests. These evaluation assignments are built on a fraudulent premise that credible experts will do them*.
      3. The public perception of an appraiser gets lumped in with evaluation producers, doing significant harm to the appraisal industry’s reputation and violates the premise that these assignments are effective in protecting the public trust.

      *Note: You can’t become an actual market expert working for a $25 evaluation fee, especially from thousands of miles away – it requires shortcuts to do so.


      “Maintaining the public trust” is ignored with the evaluation product which is why the Appraisal Institute was booted from TAFAC  the non-profit side of The Appraisal Foundation) – I’ve mentioned this before – AI National refused to sign off on the mission statement of TAF that refers to protecting the public trust.

      TAF Vision Statement To ensure public trust in the valuation profession.

      TAF Mission Statement The Appraisal Foundation is dedicated to promoting professionalism and ensuring public trust in the valuation profession. This is accomplished through the promulgation of standards, appraiser qualifications, and guidance regarding valuation methods and techniques.

      Please absorb the ramifications of this situation to the boots-on-the-ground appraisal professional:

      – Someone based in Indiana, arguably not “just over the line” was hired to do a number of evaluations in Georgia for $25 each, presumably very quickly.
      – Borrowers relied on this “market expertise” for a $250 fee and used this expertise (from someone who only got 10% of the fee) to make decisions that could damage their interests (bring in the lawsuits!).
      – The Appraisal Institute has continued to hard-sell Congress and state legislatures on giving the ability of certified appraisers to flip the “on/off” switch of their license to do these $25 evaluations even though most of the AI residential membership – aside from AI Institute blind loyalists – would tell you that the three “key points” above will happen. In fact, top executives at AI National give the impression that their own residential members are desperately clamoring to do $25 evaluations yet, in reality, AI National never actually sought real input from their own residential membership other than from wanna-be insiders.
      – A living breathing human certified appraiser actually accepted this assignment and was able to sleep at night.
      – Clear Capital got 10x the fee the actual valuation expert did and was clearly super talented at data entry – presumably demonstrating a skill more vital than the valuation.

      Why are evaluations being allowed to normalize in the industry? Their reality is defrauding the public of expertise they think they are paying for and tarnishing the contribution and risk management the qualified appraiser provides to the mortgage process. It’s not a difficult concept to grasp – even ten percent of it.

      Jonathan Miller
      REIC Forum Moderator

    • #2246

      The Appraisal Institute Seems Hellbent On Breaking Florida’s Public Trust

      As I’ve said many times here on Appraiserville, the efforts by Scott DiBiasio and AI National senior leadership to undermine residential appraisers including those that pay for membership in AI National only to keep their designations – continues to damage the profession. AI National’s actions diminish the value of the role of an appraiser and the value of their AI designations in the marketplace as evidenced by declining membership.

      Scott has been working hard in Florida to jam through evaluation legislation to allow appraisers to turn off/on their designation so they can cash in on all that $25 appraisal work while confusing the marketplace on what constitutes an appraisal. In Florida’s case, it looks like he has AI insiders to work with on their real estate board.

      Thankfully I’m told that the AI National backed amendments to the Florida license law were sloppy, not well thought out and rushed through without much discussion to catch everyone off guard. Predictably the result is confusing to appraisers, regulators, and the public.

      But thankfully Florida appraisers are lucky to have my friend and colleague Frank Gregoire on our side who is one of the most respected appraisers in the U.S. He says:

      The Ethics Rule of USPAP has a Catch 22; services provided as an appraiser require compliance with USPAP. Public trust in the profession requires compliance.

      Here is his January 28, 2018, letter to the Florida Real Estate Appraisal Board to provide his views on the changes AI National is trying to ram through. Because I am not as smart as Frank, I translate this letter to:

      If it walks like a duck and talks like a duck – evaluations versus appraisals as terminology, then it will be subject to USPAP – and on top of it – the board will no longer have the ability to provide oversight of evaluations as well which means they can’t protect the public interest. Here is some good reading for you.

      Frank’s Letter to FREAB 18.1.28
      ETHICS RULE from USPAP 2018-19 (002)
      FDIC: Supervisory Expectations for Evaluations
      Advisory Opinion 13 from USPAP 2018-19 (002)
      Interagency Appraisal and Evaluation Guidelines
      Georgia Evaluation-Table of Contents 539-3-.04

      Jonathan Miller
      REIC Forum Moderator

    • #2245

      The Appraisal Question of 2018

      The Appraisal Institute is spending heavily to insert evaluations into state laws that confuse the public, dilutes the credibility of what an appraisal is and seemingly no one in their residential membership aside from a tiny sliver of wanna-be insiders or the industry at large, who are facing their own demons. Why? They’ve never told us “why” aside from lying that many appraisers are begging them to do $25 evaluations. Why?

      Jonathan Miller
      REIC Forum Moderator

    • #2244

      Craigslist is A Great Way to Find The Best Appraisal Talent on Complex Assignments, Right?

      Dave Towne sent me this example of a request for appraisal service on Craigslist which was pretty jaw-dropping:

      Certified NY State Real Estate Appraiser (Midtown East)
      compensation: $500
      employment type: contract

      One time gig. Need professional appraisal of two combined apartments. Unusual circumstances and layout. Not your everyday appraisal. Needed for current litigation, so must be thorough. Not under any time constraint. $500.

      Can discuss further on phone call if you contact me. Thank you.

      I can imagine how this case will go. I hope I am hired by the other side.

      Jonathan Miller
      REIC Forum Moderator

    • #2243

      Wall Street’s Appraiser Epic Fail

      There was an epic Wall Street Journal this week called: What’s a House Worth? Wall Street Turns to Drive-By ‘Appraisals’ (behind paywall) that got the appraisal industry’s blood boiling. Here’s another publication’s interpretation of the piece outside of the paywall and yet another interpretation (I’m in this one, LOL).

      BPOs for $10 bucks and outsourcing drive-bys from India…what could go wrong?

      It is clear to me that Wall Street views the value aspect of asset management as a piece of paper that needs to be completed and thrown in a file. To save a nominal amount of money, they are behaving like commercial banks and mortgage brokers during the housing bubble.

      Since the existence of the Federal backstop was confirmed by the bailouts in the banking industry in the aftermath of the housing bubble a decade ago, the take appears to be that there is no real need for competent asset valuation. Risk management is simply reduced to form-filling.

      I like to paraphrase Mark Twain who said: “History doesn’t repeat itself but sometimes it rhymes.”

      Jonathan Miller
      REIC Forum Moderator

    • #2242

      Appraiserfest, San Antonio, TX November 1, 2, 3

      Well my friends, there is a new appraiser-centric conference in town, and it’s called AppraiserFest. Why would you want to attend AMC-centric conferences that selfishly predict your demise based on the advertisers that have paid to play. Lead by Phil Crawford and Mark Skapinetz, Appraiserfest is going to be a happening, not just a conference. More details to come.

      I’ll be joining other thought leaders in our industry to talk about our part of the mortgage process that has been under siege since the financial crisis. We haven’t been speaking on our behalf until the past year and our influence is only going to scale higher.

      Give Phil Crawford a video editor and he’s soon competing for page views with the new Star Wars trailer. Here’s the Crawfordized announcement:

      Jonathan Miller
      REIC Forum Moderator

    • #2241

      RAC 2018 Conference Announced, Frisco, TX September 13, 14

      As the president of RAC and am excited to announce our 2018 conference will be held in Frisco on September 13th and 14th. It promises to be a productive, relevant and fun event.

      Founded in 1990, RAC continues to be the premier appraisal organization whose members focus on complex residential properties for relocation, litigation support, testimony and reviews.

      Jonathan Miller
      REIC Forum Moderator

    • #2240

      Lots of things starting to brew in the new year so lets recap last year’s roller coaster ride.

      REALITY DISTORTION FIELD: Guess the year the AI National new president’s interview was written?

      That all caps phrase is a marketing technique mastered by Steve Jobs of Apple.

      In appraiser speak, the effective date of the following press release is in 2018, but the actual age could be any time since AI’s inception with only slight modification. The new Appraisal Institute president Jim Murrett looks like yet another old guard inner circle executive as evidenced by this super generic press release-as-interview for Appraisal Buzz.

      Reading the release, you’d never know that AI National had a terrible year in 2017 that began with their self-serving actions in late 2016.  To be fair, AI National was very good in leading the industry’s response to the Tristar Bank appraisal waiver request outcry. I would encourage them to do more to look out for their membership using that event as a template.

      Here were the issues facing AI National in 2018 that the new president didn’t acknowledge in the slightest:

      – The “taking” of most chapter funds initiate and “pre-approved” by the board in late 2016 without vetting to membership or chapter leadership.  This action was merely paused but is still alive and was set to begin January 1, 2018.  No word on this but I do believe that is AI National’s poison pill.  If they go forward with their plans, that will be the end of AI National.

      – AI National now has a big competitor with the merger of NAIFA and ASA who lobby and work hard for their members.

      – Ignoring chapter boards when aggressively courting state legislators in 2017 to embed anti-USPAP regulations that would severely damage the residential profession by providing confusion to the marketplace – incredibly, claiming it was great to enable appraisers to turn off their certification at will in order to do $25 evaluations.  And all along I thought certifications were in place to protect the public trust?

      – A misleading congressional testimony in late 2016 that falsely characterized the fake “appraisal shortage” as the fault of USPAP and TAF when this was really an attempt to embed their own standards.  Ironically AI National gave their standards to TAF as the platform to build USPAP (how quickly they forget).  AI National aggressively lobbied individual financial committee members with this misleading narrative to make this hearing happen – I saw this firsthand.

      – Given the accelerated rate of membership decline last year, possibly triple the decline of the previous years, I don’t see how 2017 was a good year unless their goal was to shrink the organization?

      – After fleeing from the Appraisal Foundation a decade ago (and the reason I quit as an affiliate after their non-credible reasons by then president Leslie Sellers), AI National tried to re-join TAFAC but was rejected by a 2:1.  The reason I believe they were rejected was that they would not agree to the stated goal of the organization.  Some council members blindly loyal to AI National actually said not agreeing to the goal was the same as not agreeing to check a “little box” on an application.  Since there have been exciting developments in the industry, it was great to see an organization like TAFAC have a backbone and stop putting up with prima donnas.  As someone told me – “I’m sick of their crap, we’ve wasted enough time on them.”

      – And after the “middle of the night departure” of CEO Fred Grubbe, last August for no stated reason – although many tell me he has been a large part of the culture problem at AI National and many have told me what they thought the actual reason was. There has been no word on the nominating process for a replacement. I’m betting it is Jim Amorin.

      – 2017 marked the first year that AI National was recognized by the industry and their membership as a detriment to the future of the appraisal industry, taking actions that they themselves have been unable to explain to their membership. Who doesn’t find this bizarre? The reasons for their contrarian behavior are only understood by the inner circle of executives. Perhaps 2018 will be the year where membership is able to crack their code to understand why they are so eager to work against the industry i.e. USPAP, evaluations, promoting AMCs, the “taking” debacle, which is still alive, and more. Whether or not we ultimately learn what is going on internally, it matters less in 2018 since they have lost their actual leadership role and are essentially irrelevant.

      Now please re-read the press release and tell me how 2017 was a good year for AI National – our industry’s largest trade group and whether they as an organization learned ANYTHING from their recent mistakes, included a massive, unheard of, membership uproar. Former CEO Fred Grubbe may have been the only one to understand that after than a decade of leading the organization and its culture into irrelevancy, it was time to leave.

      View the press release on Appraisal Buzz

      Jonathan Miller
      REIC Forum Moderator

    • #2239

      Dave Towne: Revision to GSE forms coming?

      Most of my reports are narrative these days (unless you know of a form to appraise a “dumb-waiter airshaft.”)

      But here’s something from Dave Towne (send him a note and get on his essential mailing list).

      Jonathan Miller
      REIC Forum Moderator

    • #2238

      Just say NO

      On a personal note, multiple Wall Street and other large financial institutions have approached my firm this year after they neutered their AMC vendors, requiring that they use our firm for high-end work. We are to be paid our fee and allowed to provide our reasonable turn times. I was told many horror stories by those institutions who came to realize we are not robots, nor are we widgets. By taking this step, they invested in risk management.

      However, their initial stream of new business was met with 3-4 addendum requests per assignment that had nothing to do with any requirements, repeated prior requests or had no relationship to the credibility of the value. We nicely complained to the AMC and their institutional clients as to why this was a problem for us, indicating the relationship won’t work unless this is fixed – the idea that we are not to be treated as if we have no experience in our market. To their credit, they escalated the issues and responded with the utmost professionalism. Suddenly all those requests for clarifications stopped coming, but the new assignments didn’t stop. Win-win. We have one last new Wall Street client who is resolving their internal issues now and I am hopeful that they will make the necessary corrections. If they don’t, we’ll simply drop them.

      I do understand the default thinking behind superfluous addenda requests – Typically, AMCs are forced to rely on appraisers with no local market knowledge because most of the better local talent has other clients paying full fees and demanding reasonable turn times. As a result, AMCs often lose their muscle memory to engage critical thinking in their reviews. The idea that my high-end Manhattan property appraisal can be reviewed by an appraiser in Kansas who has never been here, for a California bank and the AMC engages in scary big worded USPAP talk that isn’t accurate is completely inappropriate. I’m not saying pushback always works but AMCs seem to be recognizing that their time is up for business as usual and are bringing outsiders with actual valuation experience to fix what’s broken – at least in my small window of AMC interactions.

      Life is too short. Don’t put up with what isn’t right. That’s how the appraisal industry killed the “appraisal shortage” lie in 2017. Do the best appraisal you can, operate with professionalism and integrity and know when to say “no.” After what happened in 2017, I think the few AMC clients we are engaged with are seeing a little bit of this light.

      Jonathan Miller
      REIC Forum Moderator

    • #2237

      Looking back at the appraisal industry in 2017 (catching up edition)

      – Appraisers became significantly more outspoken and legislatively active.
      – Longstanding chronic problems with the Appraisal Institute leadership and their disdain for residential appraisers was finally discussed openly.
      – A massive industry pushback of Appraisal Institute’s planned “taking” of most chapter funds was delayed (originally January 1, 2018).
      – The state coalitions expanded and continued to be more effective in their influence of policy.
      – Our industry learned that state-level policy influence is effective thanks to the coalitions getting the word out.
      – A great sense of community working for a common cause (survival) has blossomed.
      – The AMC grip on our industry formed cracks after the misleading “appraisal shortage” narrative was crushed by our providing enlightened economic facts.

      Jonathan Miller
      REIC Forum Moderator

    • #2154

      The Fall Appraiserfest Conference in San Antonio Promises To Be The Residential Appraiser’s Counterculture Answer to The Current Dull and Boring National Norm

      As the current president of RAC, I am quite proud to say that our last two annual appraisal conferences have been the best I’ve ever attended in my 31+ year appraisal career and it’s not because I’m biased (ok, maybe a little).  They were thoughtfully produced and provided high-quality content.

      By ignoring the needs of the residential appraisers nationwide, the Appraisal Insitute national leadership has inadvertently spurred the creation of 27 state coalitions to date with more coming and an alternative national appraisal conference that doesn’t overemphasize Appraisal Management Companies. This is a new way to help front-line residential appraisers be informed and make a living that has risen from the inaction of the Old Guard.

      Appraiserfest 2018

      Mark your 2018 calendars for November 1, 2, 3

      We hope you can make it!

      Here’s the first video cut of the conference announcement.

      Jonathan Miller
      REIC Forum Moderator

    • #2153

      Old Guard Continues to Lead AI National Into Oblivion By Not Understanding What Happened in 2017: Jim Murrett

      The latest edition of Valuation Review came out this week (I am a subscriber) and the cover story was an interview with Jim Murrett, the 2018 President. The interview quote struck me very hard because it made me sad that nothing has changed at AI National:

      “In May 2016, the Appraisal Institute announced a three-year strategic plan to address challenges and opportunities facing the organization and the real estate valuation profession,” he said. “We are continuing to implement that plan. AI also continues to enhance its reputation and leadership across the country and around the world by expanding its thought leadership.

      1. “Taking” Chapter Funds The 2016 Strategic Plan wasn’t fully disclosed to the membership as evidenced by the late 2016-2017 outrage after AI National leadership’s “pre-authorized by the board without sharing with membership in advance” vote to take nearly all chapter funds. This literally was a pre-planned looting of local members hard-earned and long-saved funds so that AI executives can continue to lead a lavish professional lifestyle. By saying they are “continuing to implement” means they are still planning to take nearly all chapter funds. To AI National, the money is clearly needed to offset the combination of rapidly declining membership, high salaries (guess how much Jim Amorin makes as interim CEO?), expensive and oversized Chicago office space and of course many, many trips (for years) to Europe and China via first class with spouses – to attend valuation conferences around the world while Rome is burning.

      2. Kicked out of TAFAC, Ostracized by the appraisal industry as irrelevant Aside from being rejected 2:1 by TAFAC membership, AI National received widespread criticism by its members in 2017 after realizing their leadership was “taking” chapter funds for no justifiable reason. AI National created the false optics of forming a residential committee to look into why they have fully ignored residential members for over a decade yet that committee already positioned itself to take a long time – it is run by the Old Guard. The committee was formed a year ago, and nothing has been accomplished to benefit the residential membership. The only leverage AI National still has is to threaten designated members who speak against them. The problem with their autocratic tendencies is that the value of their designation brands has diminished significantly over the past decade reducing their power.

      3. Old Guard is fully insulated from everyday appraising AI National top-down leadership style receives no direct feedback from their membership or chapters (outside of aspiring member politicos/wanna-be insiders) as evidenced by how AI National routinely approaches state legislators without notifying the local chapter boards in that state – largely because AI National actions wouldn’t be accepted by those local members.

      AI is also keeping a close eye on the many regulations and policies affecting appraisers. Some considered a bit “archaic” and clearly not keeping up with the changing times and appraisal environment have been widely addressed and officially discussed by way of direct testimony before Congress.

      Their continued efforts – at what must be a significant expense (Does Scott DiBiasio get to keep all his travel miles?) – to undercut The Appraisal Foundation by promoting $25 evaluations and especially by misleading Congress in the fall of 2016 about regulations and the false “appraisal shortage” narrative that has been proven overwhelmingly false. In reality, they have so little outside contact with the front line of the industry that they probably don’t have any idea it was proven false and that Jim’s quote is embarrassing.

      “While it’s impossible to predict what will happen in Washington, the Appraisal Institute is optimistic that Congress will address regulatory modernization this year,” Murrett told us. “Perhaps now more than ever, we see the need for an overhaul of the current U.S. appraisal regulatory structure as appraisers are crushed by a stack of growing, outdated rules and regulations. Regulatory modernization is an opportunity to fix a broken system.”

      The above quote is basically a lie, reflecting their self-serving agenda – probably to get their hands on the $13 million in annual appraiser registry fees administered by the Appraisal Subcommittee.  Those funds are needed to solve their pending financial crisis of declining membership and unabated spending – if the chapter “taking” doesn’t happen fast enough.

      What reasonably intelligent person out there thinks that confusing the marketplace with evaluations that allow switching on and off an appraisal license depending on the assignment – in a compressed fee environment – is to the appraiser’s benefit?  Our largest industry trade group is irresponsibly diluting what we do in the eyes of the public.

      When will the Appraisal Institute begin to work for the benefit of the appraisal industry and not themselves?

      The new president looks like he is running things on autopilot. His PR comments are already a disservice to the hard-working AI members who pay AI National dues.  Active AI members have to be asking themselves, why am I paying for the slow destruction of my livelihood with self-serving absentee leadership?

      I am not looking to see AI National go under soon as is their current trajectory. I simply want the appraisal industry to fully recognize what AI National really is:

      1. A threat to the residential appraisal industry’s future.

      2. A very real distraction from progress during our “moment” to influence our future.

      What other professional services industry has had to not only fight for its survival but fight our largest trade group at the same time?

      Good grief.

      Jonathan Miller
      REIC Forum Moderator

    • #2151

      In the Appraisal World, The Expertise Only Gets Ten Percent of Fee

      An Indiana state certified appraiser based in Indiana who is also certified in other states including Georgia did an evaluation of a number of properties in Georgia. The “appraisal fee” was $250 but the AMC (Clear Capital) got $225, and this appraiser got $25 for each evaluation. I’ve blocked out the specifics of one of the orders except for the fee – in this disclosure form required in Georgia.

      In other words, the administrative fees for Quality Assurance, Broker/CMA fee, Home Data Index Fee (whatever that is) and of course, the all-important “Data entry fee” is many multiples more important than actual valuation expertise.

      Key Points

      1. The administrator (Clear Capital) gets 10x more to do administrative work than the valuation expert.
      2. The valuation expert is not a valuation expert because real local market experts can’t afford to accept evaluation requests. These evaluation assignments are built on a fraudulent premise that credible experts will do them*.
      3. The public perception of an appraiser gets lumped in with evaluation producers, doing significant harm to the appraisal industry’s reputation and violates the premise that these assignments are effective in protecting the public trust.

      *Note: You can’t become an actual market expert working for a $25 evaluation fee, especially from thousands of miles away – it requires shortcuts to do so.


      “Maintaining the public trust” is ignored with the evaluation product which is why the Appraisal Institute was booted from TAFAC  the non-profit side of The Appraisal Foundation) – I’ve mentioned this before – AI National refused to sign off on the mission statement of TAF that refers to protecting the public trust.

      TAF Vision Statement To ensure public trust in the valuation profession.

      TAF Mission Statement The Appraisal Foundation is dedicated to promoting professionalism and ensuring public trust in the valuation profession. This is accomplished through the promulgation of standards, appraiser qualifications, and guidance regarding valuation methods and techniques.

      Please absorb the ramifications of this situation to the boots-on-the-ground appraisal professional:

      – Someone based in Indiana, arguably not “just over the line” was hired to do a number of evaluations in Georgia for $25 each, presumably very quickly.
      – Borrowers relied on this “market expertise” for a $250 fee and used this expertise (from someone who only got 10% of the fee) to make decisions that could damage their interests (bring in the lawsuits!).
      – The Appraisal Institute has continued to hard-sell Congress and state legislatures on giving the ability of certified appraisers to flip the “on/off” switch of their license to do these $25 evaluations even though most of the AI residential membership – aside from AI Institute blind loyalists – would tell you that the three “key points” above will happen. In fact, top executives at AI National give the impression that their own residential members are desperately clamoring to do $25 evaluations yet, in reality, AI National never actually sought real input from their own residential membership other than from wanna-be insiders.
      – A living breathing human certified appraiser actually accepted this assignment and was able to sleep at night.
      – Clear Capital got 10x the fee the actual valuation expert did and was clearly super talented at data entry – presumably demonstrating a skill more vital than the valuation.

      Why are evaluations being allowed to normalize in the industry? Their reality is defrauding the public of expertise they think they are paying for and tarnishing the contribution and risk management the qualified appraiser provides to the mortgage process. It’s not a difficult concept to grasp – even ten percent of it.

      Jonathan Miller
      REIC Forum Moderator

    • #2117

      REALITY DISTORTION FIELD: Guess the year the AI National new president’s interview was written?

      That all caps phrase is a marketing technique mastered by Steve Jobs of Apple.

      In appraiser speak, the effective date of the following press release is dated 2018, but the actual age could be any time since AI’s inception with only slight modification. The new Appraisal Institute president Jim Murrett looks like yet another old guard inner circle executive as evidenced by this super generic press release-as-interview for Appraisal Buzz.

      Reading the release, you’d never know that AI National had a terrible year in 2017 that began with their self-serving actions in late 2016.  To be fair, AI National was very good in leading the industry’s response to the Tristar Bank appraisal waiver request.

      Here were the issues facing AI National in 2018 that the new president didn’t acknowledge in the slightest:

      – The “taking” of most chapter funds initiate and “pre-approved” by the board in late 2016 without vetting to membership or chapter leadership.  This action was merely paused but is still alive and was set to begin January 1, 2018.  No word on this but I do believe that is AI National’s poison pill.  If they go forward with their plans, that will be the end of AI National.

      – Ignoring chapter boards when aggressively courting state legislators in 2017 to embed anti-USPAP regulations that would severely damage the residential profession by providing confusion to the marketplace – incredibly, claiming it was great to enable appraisers to turn off their certification at will in order to do $25 evaluations.  And all along I thought certifications were in place to protect the public trust?

      – A misleading congressional testimony in late 2016 that falsely characterized the fake “appraisal shortage” as the fault of USPAP and TAF when this was really an attempt to embed their own standards.  Ironically AI National gave their standards to TAF as the platform to build USPAP (how quickly they forget).  AI National aggressively lobbied individual financial committee members with this misleading narrative to make this hearing happen – I saw this firsthand.

      – Given the accelerated rate of membership decline last year, possibly triple the decline of the previous years, I don’t see how 2017 was a good year unless their goal was to shrink the organization?

      – After fleeing from the Appraisal Foundation a decade ago (and the reason I quit as an affiliate after their non-credible reasons by then president Leslie Sellers), AI National tried to re-join TAFAC but was rejected by a 2:1.  The reason I believe they were rejected was that they would not agree to the stated goal of the organization.  Some council members blindly loyal to AI National actually said not agreeing to the goal was the same as not agreeing to check a “little box” on an application.  Since there have been exciting developments in the industry, it was great to see an organization like TAFAC have a backbone and stop putting up with prima donnas.  As someone told me – “I’m sick of their crap, we’ve wasted enough time on them.”

      – And after the “middle of the night departure” of CEO Fred Grubbe, last August for no stated reason – although many tell me he has been a large part of the culture problem at AI National and many have told me what they thought the actual reason was.

      – 2017 marked the first year that AI National was widely recognized by the industry as a detriment to the future of the industry, taking actions that they have been unable to explain to their membership. The reasons for their contrarian behavior are only understood by the inner circle of executives. Perhaps 2018 will be the year where membership is able to crack their code to understand why they are so eager to work against the industry i.e. USPAP, evaluations, promoting AMCs, the “taking” and more. Whether or not we ultimately learn what is going on internally, it matters less in 2018 since they have become nearly functionally irrelevant.

      Now please re-read the press release and tell me how 2017 was a good year for AI National – our industry’s largest trade group and whether they as an organization learned ANYTHING from their recent mistakes. Former CEO Fred Grubbe may have been the only one.

      View the press release on Appraisal Buzz

      Jonathan Miller
      REIC Forum Moderator

    • #2102

      AI National Is Traveling Like There is No Tomorrow, But With 5 More German SRAs

      The following text was sent to me from an AI member who received this in an AI newsletter. I have already been told much of national executive travel is typically done via first class with wives or colleagues accompanying. I’m sure all U.S. AI members are glad that 5 members in Germany earned their SRAs. If the visit entailed 6 (the 3 members listed as attending and their wives) first class tickets and more than one night for at least 3 rooms at a 5-star hotel, plus dinner, ground transportation, etc. it will take quite a while for the new membership dues from these 5 new German SRA members to cover the cost.  If there are 5 more SRA members from Germany added next year, it is reasonable to expect the same travel expenses to occur.

      In earlier posts, a chart based on AI National data suggested there was a 3,000 member annual decline at mid-year 2017 to 15,000.  This announcement reflects little awareness of the troubling situation confronting the organization.  Why isn’t all international travel placed on hold for national executives until the drop in membership is stopped?  I don’t disagree that international discourse on valuation plays a role at some level, but maintaining priorities by fixing member criticisms are much more important and in fact, likely urgent.

      The backslapping pride embedded in this letter for all the great stuff they are doing for their members reflects an insulation from the real world that their members face every day. The reality is that this propensity for travel looks a lot like self-dealing that continues to run unabated. Do you really think this type of travel volume hasn’t been in place for at least a decade?  Or did the national executives say to themselves “we’d better ramp up first-class travel for speeches around the globe to save our organization.”?  Unlikely.

      Here is what the Jim Amorin newsletter said (the AI National execs and locations in bold are my emphasis):


      In keeping with the Appraisal Institute’s commitment to convey its thought leadership to real estate professionals and others, Immediate Past President Scott Robinson, MAI, SRA, AI-GRS, presented at Valuation Expo, Oct. 2-4, in Las Vegas, on “Reconciliation of Value.” AI also exhibited at this event.

      Additionally, I was joined by President-Elect Jim Murrett, MAI, SRA, and Vice President Stephen Wagner, MAI, SRA, AI-GRS, at Expo Real, Oct. 4-6, in Munich, Germany. We were able to extensively market our organization, and provide information to attendees at one of the world’s largest real estate conferences. In addition, five German members received their SRA designations at an evening reception.

      Scott also represented AI at the American Society of Appraisers’ International Appraisers Conference, Oct. 7-10, in Houston, and at the Federation of Valuers, AC (commonly known as FECOVAL) Congress, Oct. 10-13, in Tampico, Mexico. He also presented at The European Group of Valuers Association (commonly known as TEGoVA) Fall Conference, Oct. 26-28, in Marseilles, France, on “AVMs vs. Appraisals: A U.S. Perspective.”

      Stephen joined me at the Association of Appraiser Regulatory Officials (commonly known as AARO) Fall Conference, Oct. 13-16, in Washington, D.C., where I participated on a panel discussing “Appraiser Independence and AMCs: Is It True Independence?” Stephen and Amy C. McClellan, SRA, presented on “Appraisal Review for Appraiser Regulators” at the AARO event. I also delivered a presentation at the American Bankers Association’s State Issues Summit, Oct. 27, in Chicago, on “The State of the Valuation Profession.”
      International Relations Committee Chair and AI past president Ken Wilson, MAI, SRA, spoke at the Union of Pan American Valuers (commonly known as UPAV) Conference, Oct. 24-27, in Punta de Este, Uruguay, on the “Appraisal Institute Body of Knowledge.”

      Jonathan Miller
      REIC Forum Moderator

    • #2101

      AI Leadership hasn’t “missed a MIPIM in a decade”

      A high-up appraisal industry leader asks:

      “They haven’t missed a MIPIM in a decade – always in twos, always with the wives, always first class. Why? The US organization is failing so why are they spending all this money to go outside of the US instead of tending to their core constituency.”

      “Essentially, they want to go wide on International and are changing the bylaws to allow tiny and lots of chapters in non-US. While they take our money to support the failing US chapters.”

      Jonathan Miller
      REIC Forum Moderator

    • #2099

      FTC Grants a Settlement Conference In the Matter of Louisiana Real Estate Appraisers Board

      Here is the motion. There is no clear messaging being conveyed yet as to whether this motion is favorable or unfavorable to the Louisiana board since they requested the conference. h/t Michael Small

      FCC Timeline of the Case

      The Federal Trade Commission filed an administrative complaint against the Louisiana Real Estate Appraisers Board, alleging that the group is unreasonably restraining price competition for appraisal services in Louisiana, contrary to federal antitrust law. The complaint alleges that the appraisal board’s regulations exceeded the scope of the mandate outlined in the Dodd-Frank Act that required appraisal management companies to pay “a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.” Specifically, the board required appraisal fees to equal or exceed the median fees identified in survey reports commissioned and published by the board. The board then investigated and sanctioned companies that paid fees below the specified levels.

      Jonathan Miller
      REIC Forum Moderator

    • #2097

      AI National’s Executive Leadership Regularly Flys To International Events With Their Spouses At Membership Expense As Rome Burns

      I understand that the current and upcoming president and their wives are traveling to Munich for EXPO REAL which also coincides with Oktoberfest. According to a German banker, AI has sent 2 representatives and their wives to attend most European valuation events for years.

      Here’s the proper context for this behavior:

      – AI membership doesn’t know about this activity.
      – AI Membership numbers are hemorrhaging.
      – AI National intends to take nearly all chapter funds on January 1st to “help” relieve the chapter’s administrative burden (aka The “Taking”) when it is really looking like a money-grab to fund existing jet-setting lifestyles. All the outrage membership expressed in late 2016 and 2017 to date doesn’t seem to have quelled their thirst for travel.

      We’ve documented this behavior or heard membership share knowledge of many other destinations besides Germany, including China, Romania, and Serbia.

      Now ask yourself these questions:

      – How does this ongoing expense benefit the members of AI or solve the organizations chronically falling membership?
      – What is the AI National policy on paying for a spouse to travel on these junkets? Is this stated in a policy manual anywhere?
      – Do members have access to this or some other form of this benefit?
      – Did former CEO Fred Grubbe and his wife get these free trips over his decade of leadership?
      – Is there organizational documentation of where and when Grubbe and the executive committee have been traveling the globe, who accompanied them and how much of the costs were fully or partially reimbursed? i.e. spouses, friends, other couples, etc.

      In my view, this stealth international travel pattern is highly unethical and simply immoral, possibly criminal. The organization needs to be reimbursed by all who exploited the hard working membership for these boondoggles. There can be a parallel drawn to recent travel scandals in the federal government.

      The next time you see someone from AI National executive leadership, please ask them about their upcoming travel plans.

      Good grief.

      Jonathan Miller
      REIC Forum Moderator

    • #2087

      AMC management fees exceeding the appraiser’s fee more frequently

      Over the past year, the AMC industry growth model – taken from the backs of residential appraisers – has been broken by a growing number of residential appraisers that won’t accept fees below the custom & reasonable rate. So in order for AMCs to grow revenue, appraisers are seeing their fees surpassed by the AMCs themselves. In other words, hiring the valuation expert – the whole point of getting an appraisal to begin with – to make less than the company that manages them. We hear the GSEs and lending industry complaints that appraisal fees are getting too high so they need to automate, yet the valuation expert doesn’t share in that gain – it’s all due to the wildly bloated institutional middleman.

      The AMC is there to order the appraisals, do a simplistic review without local market knowledge, run analytics using tainted AMC feedback loop data, add unnecessary clerical scope, have 19-year olds chewing gum hound the appraiser every day for status and then follow up with addenda requests that have nothing to do with the quality of the valuation.

      What other industry pays the paper-pushers more than their actual experts but the experts get blamed for being too costly? It’s bizarre and unfair to any industry and we are vulnerable because we are without any political might.

      In order to save the consumer money, the actual valuation expertise is now being pulled out of the process with the introduction of “No Appraisal” waivers through the GSEs. I’m not saying there can’t be situations that it might be pragmatic, but the pattern has been laid out by the last 8 years of AMCs inserting themselves into the mortgage process. Are we over reacting? Of course not. The appraisal industry cannot trust the mortgage system to be self-correcting. If there was not a federal backstop, lenders themselves would take more interest in their respective mortgage process that is ultimately stamped with their name.

      Mark J Skapinetz via Twitter

      Jonathan Miller
      REIC Forum Moderator

    • #2085

      Rinse Lather Repeat: Appraisal Institute Has Not Made The Replacement Process of Vacant CEO Transparent

      Since the resignation of their longtime CEO in August, the appraisal industry’s largest trade group has not been transparent in their succession plans other than having two-time president Jim Amorin become the temporary CEO until December 31st. The former CEO, Grubbe began his term back in 2007. Given the recent membership survey questions and the outrage of national membership that exploded last fall with the “taking” effort, I would speculate that it could have played a role in his unexpected departure – that it quantified the backlash outside of the cocoon he had constructed over the past decade and he saw the writing on the wall.

      With the sharp decline in membership, largely of the CEO and executive committee’s doing, I believe this calls for a much more transparent recruiting process. Although I wouldn’t be surprised if Jim Amorin, as a consummate insider, is made permanent CEO.  The organization needs a fresh start to survive. The rapid decline in membership, adversarial lobbying against its residential members’ (evaluations, alternative standards) interests, dilution of the SRA designation, complete lack of transparency, bad judgment on FNC deal, stealth relationship with REVAA, the international recruiting boondoggle, etc. creates a situation that requires transparency with membership going forward.  Oh, and throw in the “taking” (the event that inspired this forum) that is on track for January 1, 2018.  I can’t imagine every chapter giving up all their funds without the destruction of the organization.

      Otherwise, AI National is finished in short order as members will continue to flee.

      How does a person go about throwing their hat in the ring for the CEO position?  It seems like new leadership is a requirement for survival.  Right now that looks to be impossible.

      Jonathan Miller
      REIC Forum Moderator

    • #2078

      In 2013, Brian Coester of the Coester VMS AMC tweets “we pay the least and get the least qualified appraisers.”

      The graphic below was sent to me so I looked for it on twitter and the conversation is still there.

      A long dormant appraiser twitter account @insidevalues engaged in a conversation with AMC founder Brian Coester back in 2013.  Brian responded 4 days after the question and then explained the “elite gold club” set up where appraisers would get more volume at a lower price point.  I kept trying to apply sarcasm to Brian’s (he has blocked me even though I don’t recall ever engaging with him?) responses to explain the context, but he would subsequently prove me wrong or he simply is clueless about social media nuances like sarcasm.  After Brian engaged with this appraiser, the appraiser continued to tweet at him lulled into the false assumption that Brian would see the error of his ways and change his business model to fairly compensate appraiser to maintain a higher quality level.

      This is a cavalier conversion about how an AMC can view an appraiser yet the industry doesn’t don’t talk like this in public.  We’re the widgets in their factory and the lenders are either clueless or don’t care because of the federal backstop.  It’s incredibly insane that most of the mortgage lending food chain doesn’t get that this is the norm.



      Jonathan Miller
      REIC Forum Moderator

    • #2057

      Appraisal Industry Letters to Party Leaders of House Committee on Financial Services and Senate Committee on Banking, Housing and Urban Affairs on “No Appraisal” Waivers

      The Appraisal Institute led the charge for the industry to write letters to the House and Senate that were critical of the GSEs new “no appraisal” waiver programs.

      See below attached.

      Jonathan Miller
      REIC Forum Moderator

    • #2031

      9 Unintended consequences from no appraisal mortgages by Tom Horn, SRA

      Editor’s note: I can’t seem to reconcile the incredible urgency toward super fast and cheap appraisals and now no appraisals by the GSEs, lending and appraisal management company industry with creating a long term disaster. I probably sound like grandpa whittling on his front porch reminiscing about a simpler time when he could “put a penny in a burnt out fuse” (borrowed from John Prine). Are consumers truly begging to save some money by not knowing if a seasoned market expert thinks the home they just bought is wildly over priced? While I’m sure there is plenty of concern about keeping costs low, is it at the level being shouted by industry stakeholders? How about if there was no Federal backstop this time around? I’d be willing to bet that the moral hazard of this path and where it eventually ends up would evaporate if there was no potential for future bailouts? What about a clear criminal culpability as the slippery slope gains speed with future steps by over confident GSEs with low credit score portfolios?

      Tom gave me permission to share his August 31, 2017, blog post 9 Unintended consequences from no appraisal mortgages in its entirety that sits on his must read Birmingham Appraisal Blog. Make sure you go to Tom’s blog and sign up for his weekly email and be sure to read through the comments on this post over at his site.


      Are no appraisal mortgages a wolf in sheep’s clothing?

      I’ve seen a lot of celebration recently from various players in the home purchase and mortgage game regarding the decision by Freddie Mac to skip getting a traditional appraisal. While it may sound good up front because they promise to reduce the cost to the buyer and reduce turn times, will this really occur? Are no appraisal mortgages too good to be true?

      There most likely will be some unintended consequences from the transactions where a traditional appraisal is not used. Today I thought I’d share my thoughts, however, I’d like to hear from you as well. What do you think about eliminating the traditional appraisal from a mortgage transaction? They say this option will not be used all the time but only for qualifying purchases. Will it eventually include all purchases? Tell me what you think in the comments section below.

      Possible consequences from no appraisal mortgages

      1. Independence is lost- The appraiser is the ONLY unbiased party to a home purchase transaction. Everyone else from the agent to the loan officer has a financial stake at risk if the loan does not close.

      When you remove the appraiser from the picture you risk removing the voice of reason. Appraisers are trained to measure the market value of collateral to protect the interests of the lender.

      The steps involved in the appraisal process include weighing and comparing sales to the subject property in order to properly reconcile value. When an automated valuation model is used it is possible to be overly optimistic when interpreting the data and the independent nature of the appraisal is lost.

      2. Inaccuracies in the size of the house will grow- When a traditional appraisal is performed the appraiser measures the home according to a generally accepted standard (ANSI). Using a set standard on every property helps the appraiser to compare apples to apples when it comes to the gross living area of a house.

      Comparables are selected based on bracketing the gross living area of the home. If you use an inaccurate square footage figure from county records or from the owner and then bracket this amount it will prevent you from getting an accurate value indication from the sales.

      Automated Valuation Models (AVM’s) look at the price per square foot of sales and then apply it to the subject. Whenever you have inaccurate square footage of the comps you arrive at a flawed price per square foot to apply to the subject. This inaccuracy is multiplied when you apply the wrong price per square foot to the subjects perceived living area.

      3. Comparable selection- Choosing comparables is more than picking the 3 most recent sales that occurred within a one-mile radius. It takes human reasoning to pick comps that are the most similar to the subject property.

      They say that choosing the right comps is 90% of the task in an appraisal assignment. If you choose the right comps the adjustments will be minimized and the value indication for the subject will be more accurate.

      Appraisers have had a taste of the quality of comps that an AVM would provide with the Fannie Mae Collateral Underwriter (CU). The Collateral Underwriter is supposed to provide an automated risk assessment of an appraisal report. Part of this is looking at the comps the appraiser used and then possibly suggesting other comps that were not used.

      The comparables that CU suggest are a joke at best. I have had lenders provide me with comps that the CU came up with that are not even in the same city as the subject. They include foreclosure sales when they are not even appropriate. We all know that school systems are a driving force in value, right? Many of the comps provided are from different school systems and would not provide an apples to apples comparison of properties.

      4. Checks and balances for AVM’s will be lost– It is possible to compare a real appraisal with a Zestimate or other AVM to see how they vary but if the AVM is the only thing used then you don’t know how accurate it is.

      Automated Valuation Models have been used for a long time, and in certain circumstances can be useful. They can be used to initially estimate a property value to make a preliminary loan decision, however using it exclusively is not prudent in my opinion.

      Numerous appraisers have analyzed Zestimates and other AVM estimates by comparing them to appraisals they have done to see how closely they match up. The AVM’s are not consistent in their accuracy and can vary by a wide range. For lenders interested in having the most accurate value for their loan portfolios this is definitely not the way to go.

      5. Consumers may not see the cost savings since the AMC or lender will keep charging a full appraisal fee- Will the consumer really see cost savings? Or will it be like it is now in areas where there are supposed shortages?

      Why didn’t my house appraise for what I thought it would?I have heard instances where the borrower was told that there was a shortage of appraisers and the lender had to charge upwards of $1,500 to get the appraisal done. The borrower was charged this amount but the appraiser was only paid $300-$400, if that much, and the Appraisal Management Company (AMC) pocketed the rest of the money. Sacramento appraiser Ryan Lundquist wrote of a similar situation about appraisal fees that you should check out.

      Why would a lender or AMC pass on the savings to the consumer and give up money that the borrower is used to paying anyway? In my opinion, this is just a way to increase profits. There may be a savings in time, but at what cost to the consumer?

      6. Owners will not know the true value of their assets- Sale price does not always equal market value. Some people think that if someone is willing to pay a certain price and someone is willing to sell for a certain price then that is market value, but that is not always the case.

      With all of the inaccuracies that AVM’s provide how will the homeowner know the true market value of their largest asset? It reminds me of several situations I have seen in the past when buyers were paying cash and did not get an appraisal to make sure that the price they were paying was too much.

      Life situations necessitated the owners sell shortly after they purchased the home, but they could not resell the home for what they bought it for because it was overpriced. If no appraisal mortgages result in a similar situation it can lead to short sales, which is discussed in #7.

      7. Short sales could increase- If a home sells for more than its true market value, and the AVM does not provide how to appraise in an appreciating marketan accurate value indication, the buyer could immediately be underwater in their mortgage. This could result in a short sale situation because the lender will need to accept less than the amount owed on the property.

      We all know how short sales affected overall property values during the recession, right? If you have enough short sales, overall price trends could take a dip downward.

      8. No brakes put on bidding war situation- The word on the street is that inventory levels are down across most of the country. This has resulted in a seller’s market with buyers becoming frantic that they will not get the house they want.

      One tactic that real estate agents have used for their buyer clients is to create a bidding war situation where they offer a price over the list price in order to have the winning contract. If the contract is accepted by the seller and the transaction qualifies for a nontraditional appraisal mortgage this could create a problem that was outlined in #6 and #7 above.

      In situations like this where a traditional appraisal is performed the high contract price would probably be questioned based on recent sales and active listings. The boots on the ground appraiser would be able to let the lender know that their collateral is worth less than what they are lending on it, which would help them make a better-informed loan decision.

      9. Lawsuits against agents could increase- Many of the above-noted situations could result in consumers becoming frustrated when they find out that they bought a house for more than it was worth. This could increase liability to real estate agents since buyers may choose to sue agents.

      Since an appraisal was not done, the true market value of the home was not determined. As I noted previously, some believe that if a buyer is willing to pay a certain price and a seller is willing to sell at a certain price then that should constitute market value, but in reality, it may not. A traditional appraisal determines the most likely price after looking at numerous transactions, including closed sales and active listings. It goes beyond the agreed upon price, although it also is taken into consideration.

      As you can see, there may be some unintended consequences from Fannie Mae’s decision to provide no appraisal mortgages. Appraisers provided valuable input into the last housing recession before it began to happen, although many did not listen. Will eliminating appraisers from future mortgage transactions be worth the risk to the housing market? Only time will tell.

      Jonathan Miller
      REIC Forum Moderator

    • #2025

      June 6, 2017, Appraisal Foundation Letter to FHFA over Waiver of Appraisals Issue

      Now that the false narrative of “appraiser shortage” by AMCs, Lenders and Large Appraisal Firms has been countered by the appraisal industry (absent AI National), the discussion of new policies from the GSEs concerning appraisal waivers seems especially irresponsible. In addition to the false shortage narrative, it was a reaction that was enabled by the refinance boom that is now over. It also shows how little the GSEs understand about the appraisal industry and the damage done by AMCs. FHFA has been spoon-fed an out of context storyline by parties with a financial gain. I also assume they are feeling particularly confident with a very high portfolio credit score created by mortgage underwriting disconnect from current risk reality.

      Here is the letter below sent by TAF to the GSE regulator FHFA that clearly outlines the FHFA disconnect.

      I like to paraphrase Mark Twain, “history doesn’t repeat itself but sometimes it rhymes.”

      Jonathan Miller
      REIC Forum Moderator

    • #2023

      Support Texas/Florida Appraisers In Need #Harvey #Irma

      We’ve raised $11,400 as of this morning but need to reach our goal of $20K. Please help!

      So it’s come to our attention that some appraisers are in need of help that were impacted by the flooding of Hurricane Harvey in Texas. We are an amazing group of people in this profession and group and we all know the hardships we face on a daily basis on any ordinary day. Well, now some of our very own have even more of a hardship than we could ever imagine. Please take the time to donate anything you can so that we can help them out. Let’s show our support and flex our muscles yet again. Thank you all.

      This is co sponsored by Mark Skapinetz, Joe Mier, Lori Noble, Jonathan Miller and Phil Crawford.

      Click here

      Jonathan Miller
      REIC Forum Moderator

    • #2021

      APPRAISER FORUM & FESTIVAL – Real Estate Appraisers Are Holding A Convention for Real Estate Appraisers

      In the rush to hold conferences for the real estate appraisal industry, the big stakeholders forgot about the real estate appraisers themselves. Next year there will be a new event and we hope you can make it. Details coming. I can’t wait.

      Jonathan Miller
      REIC Forum Moderator

    • #1829

      Feedback for July 2017 Governance Restructure Project Team (GRPT) Recommendations

      Attached is some very thoughtful feedback from Ron DeVries, MAI, SRA on the AI National governance proposal. The entire letter is attached below. Here is the closing paragraph:

      Once again, thanks to the team for putting the recommendations together. It appears however, as they relate
      to Education Delivery, the recommendations aren’t ready for prime time. They appear to be a starting point
      to flesh out a structure that has not yet been developed. This is coming across as “National is going to take
      over education delivery – what do you think?”

      Jonathan Miller
      REIC Forum Moderator

    • #1813

      Appraisal Institute Board of Directors Accepts CEO Fred Grubbe’s Resignation, Membership Heaves A Sigh of Relief

      I began to receive emails, calls, and texts this afternoon from colleagues around the country advising me that Fred Grubbe, the CEO of the Appraisal Institute for the past decade, had resigned. The notice came in the form of an email to the membership of AI (see the bottom of post). I quit AI early in Grubbe’s term – during the chaotic Sellers’ presidency as I saw the organization deteriorate into petty, self-serving squabbles and the specter of threats towards any dissent.

      I would like to see the organization survive and even thrive but this will only happen if complicit leadership is purged – just as Region III just tried to push for a few weeks ago.

      On a national level, AI National under Grubbe’s leadership ignored its membership for years, especially residential members. This action is only a first step towards returning the organization to its roots of servicing the interests of its membership.

      Time to Clean House

      Other leaders that carried the torch for Grubbe need to go. They were part of the problem – this inner circle could have stopped the deterioration of the organization by pushing back rather than carrying the water so to speak. This small inner circle of “leaders” were never really leaders at all. They followed Grubbe’s will and basked in the glow of the power they held in the organization with an arrogance to those outside their inner circle. They may have worked hard, were friendly people on an individual level and may have meant well, but they didn’t appear to question the changing direction of the organization as it hurtled towards failure – where it is now.

      I have listed dozens of poor decisions or actions of AI National senior leadership since late last year within this REIC forum but here are some of the key fails:

      – Ignored the residential membership and let the SRA brand deteriorate
      – Added additional designations such as AI-GRS which only served to dilute the value of MAI
      – Shamefully sought to undermine The Appraisal Foundation at all times
      – Went to Congress last fall and misinformed congressional leaders in sworn testimony that a non-existent “appraiser shortage” was the fault of regulations.
      – Was quoted in media – saying that there was an “appraisal shortage,” not understanding, as our largest industry trade group, that there was only “a shortage of appraisers willing to work for half the market rate” – AI is supposed to champion appraisers, not marginalize residential membership by their ignorance
      – Provided no transparency to membership on major and most minor decisions
      – Did not share relationships and objectives that were counter to membership interests – such as an FNC relationship that was hidden for a decade
      – Showed no compelling evidence of financial acumen yet decided without out input from membership to take nearly all local chapter funds in the “taking”
      – I’m have been told the BOD swears allegiance to the CEO and senior executives. They are there to serve them, not the membership
      – Bullied members or admin staff who spoke out against the organization (one chronicled on REIC)
      – Worked closely with REVAA (AMC trade group), undermining the residential appraisal industry they ignored
      – Reportedly spent millions (was not disclosed to membership) on international recruitment, giving speeches and jetting around the world with hopes of growing the organization with nominal, if any, success
      – Championed alternative valuation standards to allow evaluations so appraisers could have the chance to do $25 evaluations and confuse the marketplace with multiple standards
      – The combination of the bashing of ASC/TAF in public, the deal with FNC, the push for evaluations and alliance with REVAA suggested a financial upside for senior executives on a personal level, but there was no forum offered to membership to quell these widespread rumors
      – Had Scott DeBiasio flying all over the U.S. to champion alternative valuations but not tell local AI chapter boards
      – Had Scott DeBiasio flying all over the U.S. to champion alternative valuations but skip past state real estate boards and go straight to their legislature
      – Had Scott DeBiasio flying all over the U.S. to champion alternative valuations and not tell the residential membership they were undercutting their livelihood

      The following list of these insider names are too short, but I would hope these individuals resign now.

      – Jim Amorin, President, and Acting CEO (on his second term for an unexplained reason – yet plenty of other leaders outside Grubbe’s tight inner circle could have performed the job.)
      Scott DiBiasio
      Bill Garber
      – Scott Robinson, Immediate Past President

      CEO Resignation Announcement

      Jim Amorin’s farewell letter to CEO Fred Grubbe went beyond just being cordial. He was really straining to find any accolades of note, thanking Grubbe for bringing “national reserves” to a record high. I’m willing to bet that only a handful of AI membership even knows what that means. I know I don’t. Instead, I prefer to focus on the collapse of membership under Grubbe’s reign, financial mismanagement (i.e., international recruiting boondoggles, speeches in Serbia and Romania, trips to China and the toxic culture that now exists. Only a small number of members trust anything coming from AI National. It is a serious problem in the context of the organization’s survival.

      There is so much more needed to get the AI house in order, but this event is one important small step in the right direction.

      Jonathan Miller
      REIC Forum Moderator

    • #1804

      North Carolina Real Estate Appraiser Association (NCREAA) Responds to FTC Letter of June 30, 2017

      The NCREAA hired attorney Steve Cannon – the same lawyer representing Louisiana’s Licensing Board in their case against the FTC – to write a response to the FTC letter of June 30, 2017.

      NCREAA felt there needed to be a response rather than leaving the FTC letter to stand unchallenged. Here is the Cannon response letter:

      Jonathan Miller
      REIC Forum Moderator

      • #1825
        Dan Sciannameo

        A new broom sweeps clean. The AI Government Restructuring Plan is a catastrophe.  This will be fought tooth and nail by successful chapters. Out with the National Board of Directors. The chapters are the strength of AI and have always been. National is a drag on the organization and has shot itself in the foot numerous times over the decades. Many of us may be handing in our MAIs if this passes. Ideally, the National BOD should be composed of Chapter Presidents.

        • #2018

          Thanks for chiming in Dan. I agree. National leadership is now responsible for the near term survival of the organization. If the status quo remains, the organization will collapse with the “taking” and the exodus of people like you. If new leadership comes in, then there is a chance of survival. I do like you suggestion of chapter presidents sitting on the BOD.

          Jonathan Miller
          REIC Forum Moderator

    • #1796

      Appraisal Institute Membership Falls Sharply As ASC Registry Levels Off

      In the latest mid year numbers for Appraisal Institute membership, 15,000 members have paid their dues as of May 31, 2017. That’s 3,000 less than this year’s projected 18,000 total on their web site. AI National forecasted a 700 member drop in membership for 2017.

      In all fairness, AI National could see additional sign-ups but this will be tempered by the now spirited debates surrounding their governance proposal. The key issue in front of the organization now is the “taking” policy where they announced their plans to take chapter funds last fall. This was largely done without advanced warning or membership input and their recent governance committee came up with a similar recommendation.

      I assume the faster decline in membership occurred because of all the unknowns with AI National’s future or actual survival in the short term.

      In the following chart, I matched up the current ASC registry totals with AI membership through the middle of the year (May for AI National and July for ASC).

      Since the financial crisis, AI membership dropped by one-third while the appraisal industry fell 20.8%. The latter makes sense given the housing bubble peaked a decade ago. In what reality does a trade group’s leadership get a pass when their membership falls faster than the industry they claim to be leading?

      An URGENT request to my readers: I have only been able to verify AI membership totals back to 2007 and a 25,000 total for 1995. If you have any annual membership totals by year prior to 2007, it would be greatly appreciated. I would keep the source anonymous. I am interested in comparing the AI membership trend since 1992 when the ASC registry data begins.

      UPDATE A member contacted me to indicate that they had different 2007 membership results than I presented. In my renewed research, I found another membership count for 2007. So I opted to update the graph to reflect 2008 to 2017 and change the title to reference the 2008 financial crisis rather than the housing bubble. This doesn’t change the original concept – that AI membership is falling faster than the industry.

      Jonathan Miller
      REIC Forum Moderator

    • #1786

      “When Googling “Appraisal Institute Members”, My Blog Appears on First Search Page”

      This exercise merely shows this little ol’ blogger’s post can come up in the search results for a big national trade group. This likely means two things:

      1. AI membership outrage reflected in heavy traffic to my pages.
      2. AI National sees very little traffic as an ineffective large national trade group
      3. 1 & 2.

      Today my original post on December 6, 2016, placed 9th on the first-page search for “Appraisal Institute Members.”

      Jonathan Miller
      REIC Forum Moderator

    • #1783

      Questions for the Governance Structure Project Team Regarding their July 2017 Recommendations

      These are questions that will be asked at an upcoming chapter meeting with AI National in attendance. The one burning question I have always had and it has never been addressed in an open and credible way to the membership: “Why does AI National need to take each chapter’s money when that has not been an issue to all but a handful of the smallest chapters? since AI National was founded?”


      • If the survey of Chapter and Region leaders suggested that the minimum number of Chapter members should be 125, why did the Project Team recommend 300?
      • One Chapter in states with large numbers of members and significant distances to major cities, such as Texas, California and Florida, will make it difficult for many members to be involved and attend meetings/education programs. Conversely, the grouping of states to form Chapters of 300 members each will have similar challenges. This structure will likely result in worse communications between National and the Chapters/members than currently exists. In addition, the structure would make it very difficult to meet the needs of members in geographically widespread areas.
      • The Texas Chapters/members provide funding to support FACT. How will that funding be provided under the recommended structure?
      • The recommendations state that, “Existing or future chapter conferences will be reviewed as part of a cost/benefit analysis and managed as part of the budget process.” Many Chapters offer conferences and symposiums that provide significant revenue to Chapters and are very effective public relations tools. Why would the future of these successful programs be subject to National review?
      • If Chapters’ only involvement in AE, QE, USPAP and some CE education is to be available, if contacted, to provide local input and feedback on delivery locations, what is the process to ensure that Chapter members’ needs are met?
      • Networking is a benefit to members and their businesses, and it occurs, primarily, at programs that provide education credit. If Chapters have no control of education programs, then there won’t be any networking for the members.
      • How will Chapters be funded?
      • The recommendations about Chapter finances are more restrictive to Chapters than the Chapter Finance Management and Administration Policy. Why is it necessary for Chapters to cede all control of their money to National under the current recommendations, when it was acceptable to the Audit Committee that Chapters only cede control of the accounting functions to National?
      • One of the key takeaways was that, “Overall, roughly 1/2 to 1/3 of the membership has a strong relationship with Chapters.” This is a very strong number, considering the fact that many members are not interested in being involved.
      • Because of the inadequacies of some Chapters, all Chapters will be subject to the recommendations. The underperforming Chapters should be subject to the recommendations, and the high performing Chapters should not be subject to the recommendations so they could continue doing what they do the best – servicing the members.
      • Please explain the recommendation, “Chapter support to be provided locally, utilizing uniform job descriptions; supervised locally, directed nationally“.
      • Are the Chapter support staff paid by National?
      • If so, who at National do they report to?
      • The strengths of Regions could be maintained by, possibly, removing some of the burdens of Chapters.

      • With approximately 80 Chapters in the US, how many staff will need to be hired at the National office to perform the functions of these Chapters?

      National Board of Directors
      • As of 12/31/16, there were 309 international members and 18,508 US members. The recommendations provide for a decrease in the Board size from 21 Directors and 5 Officers to 11 Directors and 5 Officers.
      • Why is there such a disproportionate representation between international members (1/309) and US members (1/1,850)?
      • Why weren’t the number of Officers decreased? Perhaps the Immediate Past President and CEO positions should be eliminated, and the number of Directors be increased.
      • With so few positions available to members, why would up to 2 of the 11 Directors be non-members? This is a member-driven non-profit association and only members should serve on the Board of Directors.
      • Since candidates for the Board of Directors are selected by the National Nominating Committee, the general membership loses the ability to determine their representation on the Board of Directors. How does this benefit the members?
      • There is a possibility that the Director positions could be filled by members from private national appraisal groups, thus leaving a loophole wherein other members from these groups could be promoted to fill national leadership positions. This scenario could compromise the independence of the AI. What safeguards are in place to prevent this from occurring?
      • Why would members of the Board of Directors be paid for their service on the Board?
      • Why couldn’t the National Board of Directors members be elected by the membership at large?

      National Nominating Committee
      • Members of the National Nominating Committee should not be permitted to serve on other National Committees as this limits the opportunities for other members to serve.
      • The recommendations allow that a petition of alternate nominees for the Vice President position must come from 40% of sitting Directors.

      • Why was the charge to recommend a structure from scratch rather than utilizing the strengths of the current structure, which have been built over the past 85 years?
      • If there is a projection that implementing the recommendations might result in increased membership, please explain how that could occur.
      • One of the conclusions was that, “The existing three-tier structure is unwieldy and is expensive to operate. Moreover, the structure is not providing maximum value to all members.”
      • What are some of the maximum values to all members that will result from the new structure?
      • How will the recommendations provide more efficient delivery of services?
      • How will streamlining the organization facilitate communications?
      • There is a strong possibility that one of the consequences of implementing the recommendations will be a decrease in membership. Did the Project Team consider the possible loss of membership in their deliberations?
      • The AI has been a grassroots structure for 85 years.
      • Why are the recommendations centering more power with the Executive Committee and less with the members?
      • Centralized power is dangerous to the AI’s future. A loss of local control will diminish opportunities and benefits that members have now.
      • Has a financial analysis been performed to determine if the recommendations have a positive impact to the organization?
      • What are the organizations the GSPT reviewed that have undergone a similar governance restructure?
      • Why weren’t all levels of the organization reviewed, including National? There are potential savings and efficiencies that could be realized at that level.
      • What was the source of the research that was provided the Project Team?
      • When the AI surveyed members, did the surveys also include questions about their involvement in the AI?
      • A more reasonable approach to recommendations of this magnitude would be to apply changes in moderate, phased-in periods. This would allow for adjustments, as needed, and would prevent changes that could be catastrophic to the Appraisal Institute.
      • The recommendations could, potentially, provide fewer opportunities for members to be involved and give them less input/voice into issues. This will result in members not being invested in the AI and ultimately harm the Appraisal Institute. Isn’t this a disservice to members to develop a structure
      • The recommendations could, potentially, provide fewer opportunities for members to be involved and give them less input/voice into issues. This will result in members not being invested in the AI and ultimately harm the Appraisal Institute. Isn’t this a disservice to members to develop a structure where members could not be connected or involved?
      • Many members feel that their identity and value of membership has been a result of affiliation with their Chapter, not National. How will this structure change or improve members’ membership value and identity?
      • Why can’t the members see comments that are submitted on the AI website?
      • In the private sector, companies think of customers. In associations, you think of your members, and you’re trying to reach a service goal. Ask: (a) Is this good for the member; (b) Do they want it; and (c) Will they truly value it? The CFA Institute, a large global association of investment professionals, has 142,000 members in 159 countries and territories, including 136,000 members who hold its certification and 147-member societies. The CFA Institute found that the traditional business approach, or the top-down method, doesn’t work anymore. What is winning the members over is a new model focused on working locally with societies and supporting them under a new, global framework. The CFA Institute has changed the way it works as collaborative partners with its societies by working to serve the societies first, especially when it comes to membership resources and funding. (8/9/17 Associations Now Daily News)

      Jonathan Miller
      REIC Forum Moderator

    • #1743

      Region III drafted a “resolution for resignation” document, requesting the resignation of the current national leadership and CEO of AI.

      This resolution was sent to me as a Word document and was written to be used by all the regions. I have attached the Word document and a pdf. I believe it will be voted on this coming Tuesday in Region III. It is ironic that Chicago, the location of AI National, is in the same geographic area as the Region III chapters: Chicago, Great Lakes, North Star, Northern Illinois and Wisconsin.

      This is the long awaited “do or die” moment for Appraisal Institute members who love their organization. Although the outcry over the “taking” controversy began last fall and was suspended due to membership pressure, it could be implemented as soon as January 1, 2018. As I’ve noted before, I believe this governance move was done without any legitimate membership input as judging by the outcry, nor were any credible reasons provided to take millions of dollars away from local chapter control.


      This Resolution presented to the Regional Officers, Chapter Presidents, Regional Representatives and Alternates and other interested parties is offered on this 7th day of August 2017, as a part of the Region III third quarter meeting (conference call).

      WHEREAS, the Executive Committee of the Board of Directors of the Appraisal Institute is comprised of President Jim Amorin, MAI, SRA, AI-GRS; President-Elect James L. Murrett, MAI, SRA; Vice President Stephen S. Wagner, MAI, SRA, AI-GRS; Immediate Past President Scott Robinson, MAI, SRA, AI-GRS; and Chief Executive Officer Frederick H. Grubbe, MBA, CAE, and

      WHEREAS, the Executive Committee of the Appraisal Institute, in secrecy and without Region or Chapter consultation, developed, lobbied board members, promoted and attempted implementation of the policy sometimes referred to as The Chapter Financial Management Policy, and

      WHEREAS, the lack of transparency in the development and implementation process of The Chapter Financial Management Policy has led to the distrust of national officers and national governance within the Regions, Chapters and the Membership, and

      WHEREAS, this same Executive Committee has introduced, endorsed and promoted the Governance Structure Project Team’s recommendations which eliminates Regions and the ability of members to meet, interview potential candidates and select their representatives to the national board of directors; furthermore, this proposal wrests control of the Appraisal Institute from the membership and firmly places organizational control in the grips of even fewer insiders, and

      WHEREAS, the Executive Committee unnecessarily encouraged “exposure” of a policy permitting national assistance to Chapters in lobbying appraiser friendly state legislation including codifying Appraisal Institute’s Standards of Valuation Practice and Code of Professional Ethics – a move that could unnecessarily aggravate friendly and unfriendly organizations with little membership gain, and

      WHEREAS, members of the Executive Committee have not utilized the existing framework of the organization to foster a cohesive organization, develop a collaborative culture and in fact, have presided over the largest decline the Appraisal Institute has endured; furthermore, members of the Executive Committee have insulted members and Regional and Chapter staff and are responsible for the divisive “us against them” mentality that permeates Chapter, Regional and National relationships, and

      WHEREAS, the Regional Officers, Chapter Presidents, Regional Representatives and Alternates have lost confidence in the ability of the Executive Committee to lead this organization and face the challenges our changing and evolving profession presents;

      NOW THEREFORE, in the best interest of the public, the valuation profession and the Appraisal Institute going forward, a vote of no confidence is approved and it is hereby RESOLVED:

      1. Region III demands the immediate resignation of President Jim Amorin MAI, SRA, AI-GRS, President-Elect James L. Murrett, MAI, SRA, Vice President Stephen S. Wagner, MAI, SRA, AI-GRS, Immediate Past President Scott Robinson, MAI, SRA, AI-GRS, and Chief Executive Officer Frederick H. Grubbe MBA, CAE.
      2. Absent the immediate resignation of the Executive Committee, we call on the Board of Directors of the Appraisal Institute to hold a vote of no confidence and remove the entire Executive Committee as soon as practicable.
      3. A copy of this Resolution be forwarded to every Region and Chapter for discussion by their respective boards at the earliest possible opportunity – even if it must be by conference call.
      4. Region III recommends every Region interview their Regional Chair, Vice Chair and Third Director to insure those officers are committed to advancing policies that strengthen the Regions and Chapters.
      5. Region III further resolves the letter of transmittal distributing this Resolution to the Regions and Chapters contain a request that this Resolution be transmitted to their respective Chapter members.

      IN WITNESS WHEREOF, the voting members of Region III affirm this Resolution by a vote of _____ in favor and _____opposed.

      LA Anderson, Region III Executive Secretary

      Jonathan Miller
      REIC Forum Moderator

    • #1731

      Talking About Future Opportunities for Residential Appraisers as Guest Host of Phil Crawford’s ‘Voice of Appraisal’

      Phil Crawford of Voice of Appraisal asked me to cover for him while he took a well-earned vacation. While I don’t have his sweet, syrupy smooth radio voice, I can grow on you a little bit if you listen long enough. I talk appraisal war stories and appraisal business philosophy. Fun!

      Jonathan Miller
      REIC Forum Moderator

    • #1725

      AI Governance Recommendations Pave Way For “Taking” Chapter Funds Without Credible Rationale Ever Established

      All the membership outrage at last fall’s Appraisal Institute “taking” policy may be for naught if membership doesn’t take part in determining their future. This is the moment my friends. It is happening now, and AI National is counting on your complacency. I have been warning this would happen after Jim Amorin announced the suspension of the “taking” policy was announced at a North Texas chapter meeting earlier this year.

      Coincidentally, I was given an easy-to-read summary from the North Texas Chapter using the source document “Governance Structure Project Team Recommendations” posted on Appraisal Institute website July 2017.

      From the chapter mailing:

      The Governance Structure Project Team Recommendations have been distributed to all Appraisal Institute Professionals (members). The recommendations include significant changes to the existing governance structure of the AI, including:
      1) Diminished role and responsibilities for Chapters;
      2) Fewer opportunities for involvement in the organization at all levels by members; and
      3) Centralizing many functions at the National office, including Chapter financial responsibility, management and accounting.

      Please read the attached document.

      Jonathan Miller
      REIC Forum Moderator

    • #1724

      After 9 years, AMC TCValuations is ceasing operations and clearing their books by paying appraisers $0.25 on the dollar.

      This advice was shared by VaCAP who alerted me to this event:

      AMCs ceasing operation may be the beginning of a trend as more lenders stop using AMC’s. Stay on top of your receivables and be careful when granting credit.


      Jonathan Miller
      REIC Forum Moderator

    • #1722

      Why Pat Turner resigned from the Appraisal Institute after 45 Years of Active Membership (in his words)

      Many of you have asked why I resigned from the Appraisal Institute after 45 years, and I want to make it very clear as to why. It was not one incident – there were at least 10 reasons and I have provided them below. It took me years before reality decided for me. So many of you are younger (enjoy it while you have it, your youth, that is!), and you may not be aware of a lot of these items. I attempted to make a rough timeline of incidents.

      1) AI – SREA Merger – I supported it. SRPAs were told that the MAI designation would be exchanged for the SRPA with very little or no effort. False.

      2) AI put FNC on the map which in my judgment was the beginning of the decline of the income and demand for residential appraisers.

      3) AI denied, denied, denied any business relationship with FNC. For example: 2007 AI President Terry Duncan appeared in Richmond, VA at an AI dinner meeting. With John Wintrol’s letter in hand (A lawyer working for AI), I directly asked him: Does AI have any business relationship with FNC? He flatly said no. I then asked President Duncan if he would like to change that answer and he said no. I then read the letter from Wintrol outlining the entire deal and asked President Duncan who was lying – him or Mr. Wintrol. An AI board member in attendance jumped up and declared that this meeting was over.

      Yet, 10-years later AI clears roughly only $350,000 out of a $475 million sale of FNC to CoreLogic. This suggests that AI can’t make a smart investment decision.

      4) I attended the San Diego AI national meeting a few years ago. I was given the privilege to speak to various regions at the meetings. The idea was to implore AI to set up a competitive AMC because we had an instant national database of the best-trained appraisers in the country.

      The board of directors voted to put this idea into a study, belatedly. 2012 AI President Sarah Stevens named a committee, but I never saw a report. Are there any MAIs that own AMCs?

      5) The overseas effort has been and continues to be a drain on AIs efforts and finances. How many foreign members are there and what are the total dues derived from them?

      6) Alternative standards. AIs own membership does not have a clear grasp of this concept.

      7) AIs desire to damage or destroy the ASC and TAF. Who then would fill that gigantic void? The Appraisal Institute?

      8) Governance. Demanding local chapter turn over their funds was a major faux pax. First-year board members do not get to vote or even speak at the Board of Directors meetings. Why?

      Board of director members supposedly must agree that they serve National, not the regions or local members. Can you say top–down governance?

      9) Major disconnect between National AI and its residential members. Earlier this year President Jim Amorin said there is a shortage of residential appraisers by quantifying it in a PowerPoint that relied on the most distrusted and disliked AMC in the United States.

      10) The so-called “appraisal shortage” is a fabrication of the AMCs, so residential appraisers, with AIs help, are a pawn of REVAA. There is no shortage – check the number of licensees. There is a shortage at the AMC level of appraiser willing to work for half the customary and reasonable rate. REVAA appears on a AIs website, and AI appears on REVAAs website.



      P. E.-Turner (Pat), Jr., IFA, CRGA, Member of RAC
      P. E. Turner & Co., LTD.

      Jonathan Miller
      REIC Forum Moderator

    • #1550

      If you thought the AMC form of management was exclusive to appraisers, guess again.

      …consider Zillow as the first “Agent Mangement Company”

      Here’s a letter from VACAP warning real estate agents about Zillow – how they will damage the real estate brokerage industry much like appraisal management companies have damaged the appraisal industry to the detriment of consumers. It is an interesting way to create brand awareness for VACAP.


      Zillow, The First “Agent Management Company” (AMC) for the Real Estate Agent

      Brokers and Agents, welcome to the appraisal world. Zillow is the first “Agent Management Company” (AMC) for your side of the Real Estate Industry. Yes you read that correctly. Zillow’s actions have many similarities to Appraisal Management Companies, so it is fair to say, they are the first “Agent Management Company”

      “Zillow is hurting the people you are licensed to protect”

      Doesn’t that sound very familiar to what appraisers have been saying about Appraisal Management Companies? On the website, Greg Hague, a Real Estate Attorney, Broker and Huffington Post writer, describes Zillow’s actions as “deceptive, defective, and a glorified lead gen scam.”

      According the website, Zillow’s “Instant Offers” helps sophisticated investors buy homes from unknowledgeable consumers at thousands below market. In contrast, Appraisal Management Companies have been selling appraisals to unknowledgeable consumers, hundreds above market.

      According to the website, Zestimates have misled consumers for years regarding their homes value. Zillow continues the program as they profit from the sale of leads back to the agent. In contrast, Appraisal Management Companies have misled lenders on the value of their services. They continue as they profit from taking a percentage of the appraisers fee.

      And the kicker in all of this, the website is a petition for the National Association of Realtors to take a stand and force Zillow to stop. It has over 31,000 signatures. In contrast, Appraisers have been asking the Appraisal Institute and National Association of Realtors to take a stand and put a stop to Appraisal Management Companies abuses.

      And now we have silence from the two largest National Trade Organizations…..

      In the article Zillow Doesn’t Even Own the Photos it Threatened to Sue a Popular Blogger Over by Nilay Patel, posted on on 06/27/2017, Zillow attempts to brow beat an independent blogger for copyright infringement for photos they do not even own. In contrast, The FTC, encouraged by AMC’s, filed action against the Louisiana Real Estate Appraisal Board for enforcing The Dodd-Frank Federal Law.

      There is a quote on the website by Margaret Mead,

      “Never doubt that a small group of thoughtful
      committed citizens can change the world;
      indeed, it’s the only thing that ever has.”

      Join your state coalitions. Make a difference in your future.

      Please share this with your Broker and Agents.


      Jonathan Miller
      REIC Forum Moderator

    • #1546

      FTC warns North Carolina that new appraisal fee rules could violate federal laws

      North Carolina currently considering establishing set fees for appraisals

      Housingwire writes about the FTC letter to North Carolina.

      The FTC letter and NC bill are attached at the bottom.

      An appraisal colleague of mine shared a thoughtful and detailed analysis of the misguided FTC warning to NC but wished to remain anonymous. I am not the author of this response but am glad to share it. My favorite part of the response was in the beginning: “The free market left the day Dodd/Frank was put in place and the “Firewall/AMCs” were put between the lender clients and the appraisers.” This is so very true. Appraisers have not been allowed to play in the free market sandbox since May 1, 2009 (HVCC adoption) so it is ironic that they are being warned out of accurate context about their free market participation. I suspect that REVAA (organization of +80% of AMCs) is lobbying the FTC very hard with Louisiana and now North Caroline because the AMC industry is in crisis mode as individual appraisers begin to speak up.

      Enjoy the following read:
      This article is wrong on so many levels-

      1) The FTC states that if North Carolina begins dictating that AMCs use a fee survey as the basis for how they pay appraisers, the free market will be removed from any role in determining the price of appraisal services, and might inflate appraisal fees above competitive levels.

      Response- The free market left the day Dodd/Frank was put in place and the “Firewall/AMCs” were put between the lender clients and the appraisers. At that point, the free market of negotiating a scope of work and an applicable compensation amount was eliminated. The next day many of the AMCs started blasting an appraisal assignment to hundreds of appraisers at a time with a take the stated fee or get no work going forward because your client lender is now our client. Which by the way is not in compliance with Dodd/Frank presumptions of compliance. Many times the consumer is being told that the “appraisal fee” is say $800 and they assume that appraisers being paid the full amount that buyers are being charged for the appraisal, rather than AMCs taking a portion for their services. The AMC fee is NEVER disclosed to anyone so let’s say that the appraiser that accepted the appraisal assignment was paid $300 the balance of the $800 goes to the AMC instead of the AMC disclosing that the AMC fee is say $300 and the consumer would be getting a refund of $200.

      2)“In other states that have commissioned fee surveys, methodology issues have resulted in a report of appraisal fees that may not accurately reflect market rates, and may have been significantly higher than market rates,” the FTC states. The bill then states (COPIES DODD/FRANK) that “[r]ecent rates paid shall not include those amounts paid by appraisal management companies.” The bill further states (COPIES DODD/FRANK that “[c]ustomary and reasonable rates shall be based on objective third-party information, such as academic studies, government fee surveys, and independent private sector surveys.”

      Response- The states are following the Dodd/Frank law presumptions of compliance on determining a C&R Fee by getting a survey from an independent survey provider such as a University. An AMC can do the same thing they just have to follow the outline of DF.

      3)“These fees, when paid by AMCs, are then passed on to consumers,” the FTC continues. “Where surveys report only median or average fees, rather than a range, the surveys fail to account for the variability of appraisal circumstances and fluctuations in the real estate market.”

      Response- The increase in cost to consumers is caused by the insertion of the firewall between the lender and the appraiser. The only thing that is not right is the lack of transparency by many of the AMCs that do not disclose what their fee is up front. Many forbid the appraiser to discuss the appraisal fee with the borrower, and many cannot send a copy of the invoice that indicates the appraisal fee with the report to the borrower.

      4) The FTC states that the North Carolina legislation (like the Louisiana law) establishes a specific price schedule for appraisal fees that is not reflective of the market.

      Response- This is not factual- From the information disclosed they neither establish a specific price for appraisal fees but rather shows the range of fees for services with an indicated median fee for the products provided. It does not say anywhere in the survey that an AMC MUST pay a certain fee. As a matter of fact, I am sure if a complaint was filed and the fee paid to the appraiser was within the range of the fees in the survey, be it a little below the median fee or a little above the median the boards would be hard press to find them in violation. However, when the fee survey is indicating that a median fee is say $450, but the AMC is blasting out the order at $300, and the borrower has paid say $800 for the “Appraisal Fee” and gets no refund.I think that would result in a different outcome before an enforcement board. This should also get the attention of the CFPB due to consumers not being told where their funds are being applied.

      5) “Typically, the consumer pays for additional services beyond the appraisal (e.g., other services provided by the AMC), the costs of which might be recovered by the lender as a lump-sum fee for the loan,” the FTC continues. “Thus, this provision also might have the effect of inflating the prices paid by AMCs for appraisal services, above the levels that would otherwise exist in a competitive market.”

      Response- Appraisers do not care what the AMC fee is for the service that they are providing. However, if the appraiser has to disclose the fee for services, then the AMC and any other service provider should have to disclose their fees to the borrower so that they are well aware of where their funds are being spent and disclosed on the closing documents. This is CFPB issue that was not addressed when the new TRID rules were put in place.

      6)“We are concerned that, if HB-829 were enacted, real estate appraisal fees in North Carolina might not be based on competitively set market rates, and that AMCs – and, ultimately, consumers – might face higher prices for real estate appraisal services,” the FTC concludes. “As evidenced by the recent filing of the FTC Board Louisiana Complaint, we will continue to investigate and, where appropriate, recommend that the Commission challenge potentially anticompetitive actions by real estate appraisal boards.”

      Response- Appraisers are also concerned that if licensing boards do not enforce the FEDERAL DODD/FRANK LAWS on operating an AMC then were does it stop because now many AMCs are hiring staff appraisers and or completing the same assignments that they are supposed to be firewalls between the appraiser and the lender. This is WORSE than the problems of loan officers and appraisers communicating. This is truly the fox guarding the hen-house with free reign.

      In closing, Appraisers from across the United States are imploring that the FTC look into the Anti-competitive behavior of the AMCs that now control over 80% of the appraisal orders in the United States and confirm that they are following the Dodd/Frank Laws and the laws of Section 5 of the Federal Trade Commission.

      Jonathan Miller
      REIC Forum Moderator

    • #1544

      45-Day Notice of Proposed Amendments to Appraisal Institute Bylaws: Diluting the Value of AI Designations and Membership?

      AI National’s BOD issued a 45-day notice. Presumably the purpose is to make up for some of the lost revenue that has occured with the steady decline in membership. This action strikes me as being too late to have any real impact on revenue.

      Unsolicited, here is what an appraiser who holds the MAI and SRA designation told me:


      In my humble opinion, the AI’s Board of Directors plan to offer perpetual Practicing Affiliate memberships will do nothing but DILUTE the value of being a Candidate Member or Designated Member of the Appraisal Institute.

      The public is not going to go read the AI Bylaws to determine the difference between Practicing Affiliate of the Appraisal Institute, Candidate Member of the Appraisal Institute or Member of the Appraisal Institute.

      On resumes, qualifications, bios or whatever, all the public is only going to see is “Appraisal Institute” and this will allow Practicing Affiliates to ride the coat tails of the REAL Appraisal Institute Members into perpetuity.

      Again, the Board of Directors is going in the wrong direction. They should be increasing the value of the AI designations, not watering them down.

      If you agree, I hope you will contact your director and try to show him of her the light.


      And here is what an SRA, AI-RRS just sent me who thinks it is a good idea:


      It appears that someone at AI has received the old slap upside the head to wake them up…….

      Proposed rules change 45 day notice-

      If adopted, the proposed amendments will provide individuals who wish to be affiliated with the Appraisal Institute but not pursue a designation, a place in the organization in which they can remain long-term. Further, the proposed amendments if adopted will encourage individuals, who in the past may have delayed affiliating to avoid triggering time limits, to become Practicing Affiliates. Finally, the proposed amendments if adopted will enable the Appraisal Institute to recruit and retain more Practicing Affiliates, andto readmit more past Practicing Affiliates, who wish to become and remain affiliated withthe Appraisal Institute.

      Jonathan Miller
      REIC Forum Moderator

    • #1312

      The FTC Has Sided With the AMC Industry Rather Than All The Appraisers Those AMCs Have Gouged

      Today was a historic day for the appraisal industry, and not in a good way. After years of the expanding AMC monopoly on appraisal services to more than an 80% market share, with these third party companies taking as much as 50% of the prevailing appraisal market rate fees or more from appraisers in the mortgage lending space, the FTC has made a tone-deaf move with this action. The FTC made an announcement after what I heard was lobbying by REVAA (not verified), to challenge Louisiana Real Estate Appraisal Board on restrictions that they say hurts competition.

      The Louisiana Board came right back at the FTC with their own release later in the day. The state board’s counsel is considered one of the best antitrust lawyers in the U.S. so this is going to get interesting. Housingwire provides a summary of what we know at this point. Keep in mind that Housingwire’s editorial position has been decidedly pro-AMC given their lack of acknowledgment of the infamous AMC Coester v. Skapinetz lawsuit, they showed a willingness to report on this anti-appraiser legal announcement.

      Jonathan Miller
      REIC Forum Moderator

    • #1227

      North Star Chapter of Minnesota Successfully Lobbies for Significant Changes to Appraiser Law [HF 593]

      This shows what can be done when local AI chapters get involved in legislation pertaining to their own state. Kudos to the North Star Chapter of the Appraisal Institute. This is the genesis of the state coalition movement that fills a void in the future of our industry.

      Minnesota Makes Significant Changes to Appraiser Law []

      2017 Minnesota Session Laws [H.F.No. 593]

      Jonathan Miller
      REIC Forum Moderator

    • #1198

      Stephen Wagner, MAI, SRA, AI-GRS justifies implementation of “Taking” policy on January 1, 2018, saying vast majority of AI Chapters want AI National To Take Most of Their Money.

      The following feedback was shared with me by an attendee.

      The Regional 8 meeting was on Saturday. That is generally composed of Central Texas, El Paso, North Texas, South Texas, Houston and Austin. In short nothing has changed with respect to AI. Beta testing will begin in the next few months with some chapters for the new policy and most larger chapters are not. One stat that Stephen Wagner provided is that “only” 20 % of the chapters do not like the policy. Well, that means nothing – the chapters who do not want the policy “as is” are the large chapters with the highest number of members. So if some chapters need the AI Mothering FINE. But those of us who do not what AI to provide this mothering want an opt in opt out provision. In short after many of us telling them “they owe the membership more than they giving, provide this extra provision and that their arrogance is going to be the final straw that puts us down – they refuse to acknowledge these issues!! I am totally ashamed of our leadership and embarrassed at what this is doing to our reputation nationwide.

      As a reminder, Stephen Wagner is part of the inner circle of AI National leadership. He is also the co-chair of the Residential Appraiser Project Team (I addressed this previously in REIC on May 16, 2017). The 20% figure as cherry-picked either disqualifies him as co-chair as a defender of the leadership status quo, or it makes the new residential committee’s efforts moot. Or both. How about presenting a list of the chapters that are either for or against the “taking policy” in the interest of transparency, since there is so little trust between membership and AI National?

      ps. I remember when Saddam Hussein won re-election with 100% of the vote.

      Jonathan Miller
      REIC Forum Moderator

    • #1196

      Kenneth Harney, syndicated columnist writes: “Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth”

      The “Zestimate” AVM results are being tested by the courts as a homeowner (who happens to be a lawyer) sued them over the results. While I don’t know if the accuracy is an issue in this case, conceptually it always has been an issue. I’ve railed about this tool for a decade, specifically because the presentation infers a precision that doesn’t exist. I have been in several articles on the topic over the years relating to my own home’s value including the WSJ. When our market was stable, my home value plummeted 25% almost overnight. When I modified my square footage and number of bedrooms to reflect actual conditions (my house is a 200-year-old historic home) the value of my home increased 5 fold. I met former Zillow president Lloyd Frink and their chief economist at the time. Stan Humphries in my office to discuss it. Both very nice people who have a strong belief in this tool despite the real estate industry’s concerns, namely from appraisers and agents. Zillow’s response to me on this issue was along the lines of “the consumer is smart enough to know when the results are off.”

      Now that the AVM has been in use for more than a decade, it is ubiquitous. And the fact that it still continues to be presented as rounded to the nearest dollar, infers precision.

      Jonathan Miller
      REIC Forum Moderator

    • #1192

      Appraisal Institute Committee (RAPT) Working to Develop Recommendations To Address Neglect of Residential Members

      Woody Fincham, SRA, AI-RRS penned a summary piece on this effort in Joan Trice’s Appraisal Buzz site yesterday. His public reputation is one of absolute loyalty to the policies and practices of AI National, so it invites analysis to make sure a balanced message is conveyed.

      I’ve written about this residential committee before, here on REIC. Here are my thoughts after reading this post. I’ve broken it down into two viewpoints; cynical and optimistic.

      Cynical Viewpoint

      – The title of Woody’s blog post Appraisal Institute Addresses Residential Appraisers’ Issues is weakly worded. Full disclosure – Woody and I have a history. He has been critical of me in social media and behind the scenes with people I know. But still, I will pause and listen to anyone who enters the arena of discourse at a seminal moment in our industry’s history. I just wish he would rely on facts and not simply go with the default storyline of AI National. Critical thinking as a lucrative appraisal skill can apply to everyday life including the actions of a trade group or professional association. His post title choice infers that AI National is in the middle of resolving residential membership issues. They are not – based on my understanding from Woody’s recent email to me. Granted the committee has already been getting together to create recommendations for AI National to consider. This is great news. However, I don’t believe AI National has “addressed” anything yet and hopefully, when they do, they will tell their members. Better title: ‘Appraisal Institute Will Review Input From New Residential Appraisers Committee.’

      – Quoting from his blog post: “Appraisal Institute research shows that the number of licensed U.S. appraisers has declined nearly 23 percent since 2007, a drop of approximately 3 percent each year.” Unfortunately, the membership decline of the Appraisal Institute has fallen by 35% over the same period – relying on AI National statements and documents on their website (facts). The decline in membership can be seen in charts from an earlier post on REIC. In other words, the rate of decline of membership of AI National has been more than 50% faster than the appraisal industry itself since 2007. Because AI National membership decline is faster than market forces facing the industry, it is reasonable to suggest that the excess decline is due to the mismanagement including the lack of attention AI National has provided to their residential members.

      – Specifically, Woody gets passive-aggressive by lecturing bloggers like me with the “noise in the blogosphere” comment. The “blogosphere” on this issue is essentially me and a handful of others because we are the only people blogging about this issue. He pulled out an old family chestnut saying we (the blogosphere) are a bunch of whiners because we aren’t doing something about the damage done to the SRA designation (also see Brad Bassi’s eloquent response in the original post).  It looks like he forgot to consider that if it weren’t for my “whining” back in December with my “taking” post and Jim Amorin’s subsequent trip to Dallas to pause the “taking” action due to the massive organizational backlash, then Woody wouldn’t be on this residential committee because it wouldn’t exist, because Jim Amorin wouldn’t have been pressured to suggest it, and therefore Woody wouldn’t have felt the need to lecture us on not taking action.

      – Let’s remember that the Appraisal Institute’s lobbying thrust (advocacy) in 2016 was towards alternative valuation standards and was to the tune of at least $100,000 based on public disclosure filings. As far as we can tell – and their silly press releases aside – the key lobbying efforts were centered on the fight for an appraiser’s right to switch off and on their license to take $25 evaluation assignments. Jim Amorin, Bill Garber and Scott DiBiasio of AI National feel strongly that all their residential members want the option to do evaluation work and don’t believe it damages the value of the SRA and the standing of appraisers in the industry. Jim Amorin has formed this committee to provide solutions to stop their neglect of residential membership. Logic follows that because they don’t understand the needs of their residential members as evidenced by the formation of this committee, they don’t realize how Scott DiBiasio’s stealth lobbying effort on a statewide level severely damages the public trust and is a betrayal of AI National residential membership. I hope the committee addresses this specific issue and refutes what Bill Garber inaccurately represented to Congress last fall and what Scott DiBiasio asserted in various state legislatures.

      – The same people – literally the same leadership for at least a decade – that have ignored the SRA brand are the same people that are going to implement the committee’s recommendations: all, some or none.

      – As the article correctly states, this committee process will be a long slow effort. Unfortunately, the Appraisal Institute is in a state of crisis and doesn’t have the luxury of time.  In all due respect, how can this process not take more than a couple of months if it was of such importance to AI National? AI National is losing membership at an alarming rate. I have been told they spent heavily on their international recruiting and apparently it continues since Scott Robinson just spoke in Serbia. They are also spending on lobbying for alternative standards at a statewide level and in DC.  It feels like they see the end is near, and these are their last ditch efforts but aren’t sharing their strategy with anyone.  When the “taking” policy is enacted on January 1, 2018, as stated, and AI National – in theory – will have nearly all chapters’ money, how much will AI National care about the residential committee’s recommendations? My guess is they won’t need to care because the implementation of this committee appears to be done to appease residential membership during a significant membership backlash. “Throw the residential membership a bone to keep them occupied,” so to speak.

      Optimistic Viewpoint

      – The group includes some terrific residential professionals and good people – some of which I have the pleasure of knowing and some others I simply know from their reputations shared by people I respect.

      – I agree with Woody’s assertion that the SRA designation holds value to some clients. However one can’t hide behind that assertion and apply it to the whole membership, or otherwise, there wouldn’t be a reason to have this committee. A lot of time and money has been spent by the residential membership to earn their SRA designations. The responsibility of AI National is to create a branding value-add to hold such a designation. Let’s apply “paired sales analysis” to extract the value of the SRA designation. If you took the value of the SRA designation in 2007 and compared it to the value in 2017 –  What is the contributory value between the periods? Are they different? Yes, of course, they are quite different. Why are they different? Because AI National has largely ignored this designation for years relying on decades-early momentum. Running the same old ads isn’t supporting the brand.  I believe it can be revived to a limited degree if AI National gets behind it instead of funding speeches in Serbia and Romania.  However, deep down I suspect it is too late – AI National missed their moment.

      The time for lecturing those who criticize AI National is over because to do so is self-serving.  Criticism is the engine that promotes improvement.  Whining about critics like me about not having the facts is disingenuous when those being criticized literally have no material facts that we don’t.  Focus on the actual problem and help the membership…now.

      I truly wish the committee well and hope they are able to make effective recommendations to AI National to implement immediately for their residential members. The residential designations for AI members that possess them were hard-earned.  I’m with you and hope the committee does a thorough job keeping the membership informed and specifically recommends to AI National how important timely communication is to their residential membership.

      The time is now for the committee and roll up their sleeves and get something constructive accomplished for the hard-working residential appraisers in the Appraisal Institute sooner than later.  There isn’t a lot of time left. These efforts are greatly appreciated.  Fingers crossed.

      Jonathan Miller
      REIC Forum Moderator

      • #1309

        From: Bob Becker Subject: SRA Designation

        A reader sends me a post to place on REIC.

        “Johnathan, While I agree with you that AI is doing little to support the SRA designation. I feel the discount in the SRA designation comes with the AMC. If residential appraisers were able to solicit banks like they did in the “old days,” pre AMC then the SRA designation becomes much more valuable. Until AMC’s are eliminated residential appraisers and SRA designation will continue to drop. On a side note, I read the Appraisal Buzz article which you refer to in your blog. I think its ironic that Woody is a member of “The Trice Group” as he puts it, and on residential AI committee. The Trice Group should be residential appraisers enemy number 1. You seem to have a large number of readers of you blog. I wish you would consider opening up a section of the blog for readers to post comments. Keep up the good fight! Bob Becker.”

        Jonathan Miller
        REIC Forum Moderator

    • #1139

      What I’ve Leaned about AI National: The 100th Post

      Last fall I began to chronicle the actions of the Appraisal Institute’s national leadership – aka “AI National” after I read about the AI National “taking policy” – I was asked by many chapter leaders to create this site so everyone would have access to everything.

      Given today is our U.S. president’s 100th day in office, I thought it would be appropriate to look back over my journey in the Real Estate Industrial Complex’s 100th post. Here are my views so far using the facts I have sussed out or assumptions based on observations of AI National’s actions and items I have learned but can’t share the details. There is some satisfaction in the transparency gained, but there is no satisfaction from the lack of change at AI National. The following talking points are in no particular order of importance.

      1. Much like the tribalism that exists in national politics, there only appears to only be a handful of AI loyalists that trust AI National so much that they are unwilling to question AI’s actions in the “taking” policy and their lack of emphasis on residential membership. Ironically those loyalists are being ignored by AI National for positions within the organization.

      2. AI National has never spoken to me directly to discuss this issue, but did refer to me as that “New York blogger.” They only spoke to their membership in Dallas after the widespread outrage by membership forced them to.

      3. AI National has not withdrawn the “taking” policy that created the uproar and plans to move forward with it on January 1, 2018, based on chapter leaders who have heard AI National leadership speeches about this.

      4. AI National formed a residential committee exploratory committee, at the height of the membership backlash, only to appease membership. In a previous time, AI National would have set up this up through the chapters to promote better public relations with AI National.

      5. Scott DiBiasio has been traveling across the U.S., meeting with legislators to push alternative standards and not informing the chapters or membership in those states.

      6. AI National will abandon the “chapter” structure once the “taking” policy is made active.

      7. AI National will abandon the “regional” structure.

      7. AI National is not concerned about falling membership enough to curtail the millions of dollars assumed to be spent promoting their traveling boondoggle to foreign countries. No disclosures of expenditures have been shared, whether the speakers fly first class, whether they bring family members on the membership’s dime or friends and family.

      8. AI National finally did disclose their FNC relationship but buried it in a chapter newsletter.

      9. There is very deep distrust of AI National leadership. Even hardcore AI member loyalists acknowledge their distrust and are relegated to work from within effect change. I applaud them for their efforts.

      10. Multi-decade members are resigning specifically because of the distrust of AI National leadership.

      11. I have confirmed through all that I have learned about AI National, that I don’t want the organization to fail despite their anti-membership actions. All this drama goes away if the top 5-6 leaders were replaced overnight but that is technically impossible.

      12. The AI BOD has to swear allegiance to AI National rather than the membership. This confirms the leadership’s arrogance towards membership and infers that membership is beholden to AI National.

      13. AI National has done more damage to residential appraisers than any other organization directly or tangentially connected to the appraisal profession.

      14. Certain AI loyalists have told others I am a disgruntled ex-AI designated member who failed to take my CE classes and was kicked out even though I have never held an AI designation and left AI disgusted after the TAF exit boondoggle – which about the then president’s ego and not about the official AI reason they presented (excited about their future because their arms were no longer tied).

      15. My goal in this effort is to out AI National as a distraction to protecting the best interests of their residential membership and the residential appraisal industry – if they survive, great. I don’t care. I only care about the survival of appraisers and AI National is a distraction, working against the membership and industry for the leadership’s self-interest.

      16. If appraisers’ livelihood didn’t depend on the MAI designation, the Appraisal Institute as an organization would collapse overnight.

      17. The SRA designation brand has been ignored for so long by AI National that it carries little if any weight anymore. This is not meant to be disrespectful to SRAs – all worked hard to obtain them. It may carry more weight in some markets than others, but the bottom line is that the net effective is a tiny sliver of what it once represented.

      18. The MAI designation brand is following the same path as the SRA designation and will have little to no value within a decade.

      19. With the one-third decline in AI membership since 2007, coincidentally since the current CEO came on board – and the slowdown of incoming candidates, AI National has attempted to offset the revenue flow with additional offerings of new designations, a requirement of a recurring ethics course, and a significant expenditure on international expansion. All efforts have fallen short of creating financial solvency and have perhaps accelerated AI National’s demise. In the real world, leadership in such an organization would be removed, but that can’t happen in the existing structure.

      20. Most of the membership I speak with assume that AI National will go under within a few years.

      21. AI National has pushed alternative standards and provided misleading testimony last fall as a last ditch effort to save themselves by somehow replacing the ASC to collect the $40 registry fees. That concept combined with taking all the chapter monies, solves all AI National financial problems so leadership can continue to speak in exotic locales like Romania and Serbia. This theory explains their irrational behavior to date.

      22. AI National spent at least $100,000 in lobbying fees in 2016, an extraordinary amount for a relatively small organization.

      23. AI National has a stronger relationship with REVAA than is understood by the residential membership.

      24. There never was a shortage of appraisers as AI National mischaracterized in front of Congress for their self-interest, there has only been a shortage of appraisers willing to work for half the market rate.

      25. AI National leadership remains unmoved by the outrage of their membership because they have built a series of protections that prevent them from being removed from power.

      26. AI National pushed for support of AMCs back during the development of HVCC despite their own member surveys showing their membership’s strong feelings against it.

      27. I was told by an “AI National loyalist no matter was they do” that the AI is a professional organization, not a trade group. I still don’t see that, nor does the public.

      That’s it for the list now. I could go on but because you made it this far, I don’t want to monopolize your time. More on this at a later date.

      Jonathan Miller
      REIC Forum Moderator

    • #1132

      AI Immediate Past President Scott Robinson, MAI, SRA, AI-GRS, spoke in Belgrade, Serbia, on “Valuer Licensing in the U.S. and Lessons to be Learned by Serbia.”

      From the AI National Facebook post:

      AI Immediate Past President Scott Robinson, MAI, SRA, AI-GRS, presented at The European Group of Valuers Associations Valuation Conference, April 21, in Belgrade, Serbia, on “Valuer Licensing in the U.S. and Lessons to be Learned by Serbia.”

      Jonathan Miller
      REIC Forum Moderator

    • #1130

      Appraisal Institute President’s Message March 31, 2017 Regarding The Residential Appraiser Project Team

      Back on April 10, I wrote a post here that essentially pronounced the residential committee that Jim Amorin proposed was DOA since it had been months since there was any feedback shared. I received a few emails today that shared the month old email announcing the committee. Here is the header and the specific section of the letter that covers the committee.



      Sadly, I believe that this effort is a waste of time.  I hope I am wrong.  It is a noble attempt by AI members to repair the diluted SRA designation brand that so many worked so hard for.

      Now step back and imagine the leadership of a trade group or professional organization asking itself why they forgot about a large contingency of its members for a decade while under siege for the “taking” policy?  And then expecting those same leaders to embrace any recommendations from such a committee?  Let us remember that the idea to form this committee was by leadership that ignored residential membership during this critical decade.

      AI National leadership already knows what to do about the residential membership situation and the dilution of the SRA brand.  The top leadership are not children and there is no magic or complex research needed to solve the residential appraiser void at AI National.  It would take AI President Jim Amorin and his handful of executive peers 5 minutes (or less) to include residential within the organizational culture and start moving forward in a meaningful way.

      I believe it is simply too late and the residential profession has already passed them by.  I can foresee the acknowledgement process by senior leadership morph into a procedural labyrinth unlike the “taking” policy that was done without effective notice – evidenced by the widespread outrage at the end of last year.

      After/If the January 1 “taking” occurs, this effort will be moot – I can’t believe AI National leadership will care about residential once they have control of chapter funds – or the organization collapses as a result of the chapter outrage that will ensue.



      Jonathan Miller
      REIC Forum Moderator

    • #963

      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

      • #1133

        It is great to see that AI National fixed a web page a week after I pointed it out here on REIC.

        I am glad to see they still read REIC.

        The page in question was a landing page chronicling their state lobbying efforts – the page had been broken since October 2016.  The topic became a big issue for many after the House testimony last fall, whose misleading messaging from Garber dovetailed nicely with efforts on the state level by Scott D.  He has been tirelessly traveling at the state level to visit legislators, bypassing local chapters.  There is a lot of discussion about this on REIC

        At this point, I have no comfort level that what is represented on the page is what was actually undertaken. But hey, at least they fixed a web page on the internet.

        Jonathan Miller
        REIC Forum Moderator

    • #959

      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

      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

      • #1124

        I was just forwarded the AI National President’s message dated March 31, 2017, that includes some preliminary information on the residential committee that I pronounced DOA in this entry. I was sent this email two times today from committee members, so I am going to write about it in a new post up top. Working on it now.

        Jonathan Miller
        REIC Forum Moderator

    • #944

      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 <>; Stephen Wagner <>; <> <>; Fred Grubbe <>; Bill Godden <>

      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

      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

      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 <> 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

      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

      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

      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 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

      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

      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

      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

      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

      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

      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

      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
        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

          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

      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

      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

      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

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

      Jonathan Miller
      REIC Forum Moderator

    • #631

      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

      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

      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

      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

      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

      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

      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

      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

      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

      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

      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

      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

      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

      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

      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

      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

    • #478

      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

      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

      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

      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

      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

      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

      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

      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

      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 ( or Peter J. Fontana, Board Vice Chair (

      We have attached the link to the live stream of the congressional hearing.

      Respectfully Submitted

      Thomas G Stevens, MAI, SRA

      Peter J Fontana,
      Vice Chairman

      Jonathan Miller
      REIC Forum Moderator

      • #447

        Additional documents related to the above post: The Montana Board of Real Estate Appraisers Gave The 55 other Jurisdictions Important Information on AI Nationals Actions:

        – November 16, 2016 Testimony of Will E. Garber, Jr., Appraisal Institute.
        – November 16, 2016 Testimony of Joan N. Trice, SRA, Collateral Risk Network

        Jonathan Miller
        REIC Forum Moderator

    • #440

      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

      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

      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

      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
      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

      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
      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

        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
      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

      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
      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

        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

        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

      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

      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

      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

      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

      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

      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

      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

      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.

      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

      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

      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

      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

      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

      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


      “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

      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

      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

      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

      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

        Current and Former Employee Reviews of AI National via

        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
        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

      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

      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
      Gene Rhodes

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

      • #175

        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
          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 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

      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

        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

          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

      “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

      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

      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

      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

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

      Jonathan Miller
      REIC Forum Moderator

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