Reactions to Wells Fargo RVS Desktop Appraisal Announcement

UPDATE!! - The North Carolina Appraisal Board Weighs In ON RVS Desktop Appraisal Announcement - Scroll to bottom for full text.

In response to the nasty-gram emailed to me by the fine folks at Wachovia, this email was sent their way:

Mr. Ramirez,

Thank you for your message and expression of concerns.

You may wish to know the post you found to be offensive has been modified. Instead of the Wachovia email, I reference an email from another person/entity with essentially the same information. That email DID NOT come from Wachovia.

Of concern is the fact you did not take issue with any of the points made in my post on Appraiser Active. Instead, your preference was to avoid disclosure, openness and discussion.

This “product” referenced in the email sent to appraisers from coast to coast has been discussed and debated extensively among appraisers, state regulators, AQB Certified USPAP Instructors, past members of the Appraisal Standards Board and users of appraisal services over the past few days. The consensus is that there are serious problems with the terms of the offering by Wachovia.

• It is undeniably a contingent fee arrangement.
• The contingent fee arrangement does not comply with USPAP.
• The contingent fee arrangement does not comply with Florida law.
• Appraisers may be in violation of the Scope of Work Rule by accepting the assignment conditions dictated by the Client.
  
  In the event you would like to discuss these issues or make a statement with respect to making corrections or modifications, I would certainly be interested. State regulatory agencies from Florida to Washington State would be interested as well.
  
  In the meantime, I wish you well.
  
  Respectfully,
  
  Frank
  Francois (Frank) K. Gregoire IFA RAA
  Gregoire & Gregoire, Inc.
  Realtor - Appraiser
  
  P.S. Several folks with an interest in the outcome have been blind copied on this email.

Among the "several folks with an interest in the outcome" were a selection of Administrators, Members and Attorneys representing State Appraiser Regulatory Agencies from one end of the country to the other. My email, along with links to the Appraiser Active and Matrix blog posts, were forwarded to others in their regulatory agency network. Needless to say, the Appraiser Regulatory Agency group is concerned.

Here are a few comments. The names and states have been redacted because these are not yet "official" positions.

A letter from XXXXX could be directed to the Comptroller's office describing how such practices are contrary to their need for ethical, competent appraisers to provide appraisals for collateral decisions. Wells Fargo wants to engage an appraiser, but they only pay for the appraisal is the appraiser is able to report certain predetermined results (e.g. at least two comps in the last 120 days, at least 2 comps within 1 mile, all comps must be listed in MLS, etc.). The problem, of course, is that such fee arrangements are prohibited by USPAP because they inspire unethical behavior by the appraiser.

Since we are all appraisal regulatory agencies, we are bound to process the complaints that inevitably will result from such a business practice. If the appraisers agree to those assignment conditions, they have already violated USPAP. Whether it was Wells Fargo's idea is a moot point as far as our Board. If your friend recommends you break the speed limit, and you do it, you are going to get the speeding ticket, not them.
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I do not think XXXX should take an advocacy position on behalf of real estate appraisers; however, an advisory letter to the Comptrollers office on the above USPAP requirement, wouldn't be overreaching our mission statement, I think.
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My opinion is what Wells Fargo is attempting to do with it's desktop program, requesting a "hit" or "no hit" is a blatant attempt for appraisers to accept assignments based on pre-determined results.
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As most of you know I don't "weigh in" on most things, I sit back and observe what others are saying and doing. This group has, over the past 10 years provided me with a tremendous amount of very good advice and "food for thought" and for that I am very grateful. We have seen both good and bad times in this industry. I realize that our industry is constantly changing and evolving, some change is good and some is bad.

This current issue is bad. I only have two questions for now; 1. What are we as a group going to do about it or can we even do anything about it? 2. When the complaints start coming in (and they will) do we just accept it or do we hand it back to Wells etal and tell them that we, "Can't cure stupid"?
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After 4 years of college, 3 years of experience and years of learning, we now have the opportunity to earn $25.50 per day that won't even cover most of the fees that are required to maintain the data services that are required to complete this "product." Is this a hoax? Did they leave off the first number? A BPO is better than this. No wonder the banks have needed bail outs. This is the most insulting and incredulous thing I've seen yet.
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What a mess! Hard to be it could reach such a low. Seems like they will not be happy until they can have the value before the appraisal is completed!
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You go Frank! We are meeting today to finalize our position on this product and hope to send an email blast to our licensees shortly.
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The XXXXX Board may issue an official advisory opinion regarding this product that will address the contingent fee arrangement and advise licensees of the board’s position.

Interestingly enough, there has been no response from the fine folks at Wachovia and no defense of their "product".

From the North Carolina Appraisal Board

GUIDANCE CONCERNING DESKTOP APPRAISAL ORDERS


A new desktop appraisal product was released in February 2010. The Appraisal Board has received numerous telephone calls and emails about this product and others that are similar. Although the Board does not approve or prohibit specific forms or software used to deliver appraisal results, the Board does have several concerns about this type of assignment.


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