Posted by Jonathan J. Miller -Tuesday, September 7, 2010, 10:01 PM
[click to hear presentation by Appraisal Institute President Leslie P. Sellers, MAI, SRA]
In a period with perhaps the most turmoil in the history of the appraisal profession including The Home Valuation Code of Conduct (HVCC), Appraisal Management Companies (AMC) and Financial Reform legislation, the Appraisal Institute is needed now more than ever on behalf of the appraisal industry.
Despite this need for its members, the Appraisal Institute [AI] has decided to leave the Appraisal Foundation [TAF]. The Appraisal Foundation was founded in 1987 by eight major appraisal organizations to help regulate the appraisal profession within the US.
Here is the AI president’s announcement in addition to the video above. When listening to the way this situation is described, you’d have to be crazy to side with the TAF. And if you read the TAF letter, you’d have to be crazy to side with the AI.
I want to clear that I am not taking sides – that is not the point of this post.
Anecdotally, I am aware of many leading appraisers in the NYC metro area are sharply against the move so I find it curious how 100% of the comments on the video page are in in favor of it. Are these comments being filtered? Or are opponents afraid to speak up? Either way is unacceptable.
What a disaster. This will result in the dilution of MAI designation. The video suggests that the AI will now be free to do more for its members. If that were true, why wouldn’t they have done this years ago if it would be better for its members?
I’ve been following the soap opera for several months between the Appraisal Foundation and the Appraisal Institute. Frankly, the Appraisal Institute makes such a strong one-sided presentation that makes it sound like the Appraisal Foundation is randomly attacking them. Doesn’t pass the smell test.
Although I do have some inside perspective on this that is not being shared, I have learned the hard way that it takes two to make an argument and a response of righteous indignation is not a pragmatic solution – consider middle eastern geopolitics for a second and ask how that’s working out.
Here’s the suspension letter from the Appraisal Foundation.
Here is the withdrawal letter by the Appraisal Institute.
From the Appraisal Institute:
This dispute with the Foundation is based on AI committee discussions about possible legislative language with which the Foundation disagreed. The Appraisal Institute must be able to discuss freely issues of concern to, and advance the interests of, its members, the profession and the public, which The Appraisal Foundation has made clear, is inconsistent with Foundation sponsorship.
In other words, the Appraisal Institute is leaving the Appraisal Foundation because the Appraisal Foundation disagreed with proposed language in legislation that the Appraisal Institute proposed?
Seriously? Based on this, I’m speculating that the Appraisal Foundation was upset that the Appraisal Institute wanted to take some or all of their powers in financial reform legislation. Self-preservation. What else could prompt this type of blood feud? Certainly not the way it has been characterized in these letters.
I have read comments around the blogosphere about fighting the good fight. Good grief. If it comes down to a few bruised egos and a 3.5 month suspension…
Whatever the facts are, and I’m sure both sides can argue their points quite elegantly for days on end, but both sides have to be complicit for this lack of decorem.
Over the years, the weight of the SRA designation (for residential valuation) has been significantly if not completely diluted by licensing to most clients (no insult meant to SRA designation holders, but that is the reality) and now the MAI designation (for commercial valuation) is in danger of the same fate. How can the Appraisal Institute NOT be part of the solution to the serious problems facing our industry? Without membership in the TAF, I don’t see how they can help lead the industry.
AI membership is down sharply from peak, the costs of membership continue to rise, its members are seeing dwindling work volume, appraisers are being replaced by automated valuation models, they completely missed the boat on the appraisal management company phenomenon of the past two years, the predecessor to AI was complacent about licensing in the late 1980s and the AI was complacent about HVCC in 2009.
The Appraisal Institute needs to rethink this situation and begin to work for its members again if it wants to be relevant. For that matter, the Appraisal Foundation should rethink theirs as well.
AI has brought a host of educational and professional upgrades to the profession over the years and provided much of USPAP and other assets to TAF when it was founded.
I started writing this post out of frustration and ended up angry. However I have no solution other than replace the parties on both sides and start over.
It sounds like both parties need a desk review from a third party, and hopefully it is not an AMC.
UPDATE: [Kids in the Sandbox] Appraisal Institute pulls out of Appraisal Foundation [Commercial Grade]