Checkbox Chimps and Review Appraisals


“Checkbox Chimps” and Review Appraisals

by David Brauner & Isaac Peck

Appraisers are coining a new term for certain appraisal management company (AMC) staff – “Checkbox Chimps.”  These are the personnel who are “reviewing” appraisals, and no matter how solid they may be, are instructing appraisers to change their reports.

Are they really providing an “appraisal review” or are they just checking boxes on a form?

Are these personnel allowed to issue instructions to appraisers?  Are their demands crossing the line from standard requests for additional information to subtle attempts at illegal influence and improper intrusion into the process?

Appraisers are being inundated by irrelevant requests like – instructions to re-label photographs, additional alternative street scenes or explaining the obvious – for instance, asking whether a porch is covered.

AMCs defend their quality control requests, arguing that if appraisers did their jobs correctly the first time… but appraisers ask, what does a covered porch have to do with quality control?

What bothers many appraisers these days- even more than low fees- is the constant and what seems like “unnecessary” challenges to their reports by AMC staff, who in many instances, appear to be less than qualified or competent than they are.  Most appraisers know firsthand the extent to which this bogs down the process and negatively affects their efficiency and profitability. Not to mention delaying or killing deals. Few understand that some of this behavior may be at odds with state and federal regulation.

There are differences between what is proper and what is in violation of state and federal laws, according to expert Richard Hagar, SRA, as per the OREP/Working RE Webinar “Appraisal Reviews and the Law.”

Reviewing for “Completeness”
According to Hagar, employees of an AMC are permitted to “review” a report for completeness. They can ask questions to verify all required information is included- photographs, sketches, maps, flood numbers, certifications, signatures, etc.?; Is the address correct, the homeowner’s name spelled correctly?

AMC staff is allowed to ask for additional information and clarifications that help the client understand the report.  They are also allowed, in limited circumstances, to ask the appraiser to consider additional information that might not have been considered in the original appraisal.  However, as Hagar states, there are limits on what is considered “additional information.”  “In most of the instances that I’ve reviewed, the original appraiser already considered the ‘additional information’ that the AMC is asking about,” said Hagar.  “So it appears that the AMC did not read the entire report, or failed to comprehend what they read.”

Review Appraising
While any AMC staff person is allowed to look at an appraisal and verify that it’s complete, only a state certified or licensed appraiser is permitted, by various state and federal laws, to challenge the appraiser on value or criticize the adequacy of the appraisal.

AMCs are trying to ignore or find wiggle room in how laws define “appraisal review” or what constitutes a challenge to an appraiser’s value or methodology.  To most appraisers, this question is black and white.

According to Hagar, no one is allowed to have an opinion regarding the value of a property or the quality of an appraisal except a licensed/certified (review) appraiser.  “Are AMC staff just reading the report and ensuring that it is complete? Or are they critiquing the quality of the report? Once someone starts questioning the quality of your comparables, or offering an opinion on the quality of a report, they have to be a licensed/certified appraiser, or they’re in violation of state law in most cases,” Hagar says. “If you go on to have an opinion regarding the report’s USPAP compliance, you have to be trained in USPAP.”

Hagar says to look at some of the lawsuits launched by the federal government against LandSafe and Bank of America.  The suits contend that “reviewers” inside LandSafe were not just geographically incompetent and lacked proper training- in some instances they were not even licensed or certified.  Yet these people were “reviewing appraisals” and telling good appraisers how to do their jobs!

So, it’s one thing to correct a typo and quite another to criticize an appraiser’s approach to value or comp selection. The line is crossed when “requesting clarification” turns into passing judgment on an appraisal, Hagar says.

Chapter and Verse
There are at least 32 states that have already approved AMC regulation legislation-these laws have not only mandated that any appraisal review be done by a licensed appraiser in that state, but they define a “review appraiser” and an “appraisal review,” effectively establishing guidelines on who is allowed to offer an “opinion” on the adequacy of an appraisal or make certain requests of an appraiser.  For instance, the Arizona AMC Law states:

32-3601. Definitions
5. “Appraisal review” means the act of reviewing of the report that follows a review of an appraisal assignment or appraisal report in which a real estate appraiser forms an opinion as to the adequacy and appropriateness of the report being reviewed.
18. “Review appraiser” means a person who engages in the activity of reviewing and evaluating the appraisal work of others from the perspective of an appraiser, generally for compensation as a separate skill. This includes the function of reviewing an appraisal report or a file memorandum setting forth the results of the review process.

License or certificate use; exception A. All real estate appraisals and appraisal reviews performed on real property in this state shall be performed only by individuals licensed or certified in accordance with the requirements of this chapter.

According to Hagar, it’s not just state law, but there are also clauses in Dodd-Frank, FIRREA, and the Inter-Agency Guidelines that reinforce state laws and what they say about who can pass judgment on an appraisal.  He also cites language from the Truth in Lending Act (TILA) in the webinar, which mandates appraisal reviews be completed by appraisers certified and licensed in the state in which the subject property is located.

Quoting Hagar from the webinar (Appraisal Review and the Law), he says: “Reviewing is no place for an amateur. Only the unaware, the misleading, the foolish, or the people who are attempting quick, simple and, cheap are trying to get around the laws.”

His advice: Do the job right and according to the law and we will all be better off.

If you would like a copy of the lawsuit against Landsafe and Bank of America, regarding their alleged use of uncertified appraisers, send a request to Isaac at

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One Comment

  1. I agree with the points brought out in the article regarding “Appraisal Reviews” and he quite often unreasonable demands of AMC clients, regardless of USPAP Standards little regard given to Appraiser Independence, reasonable & Customary Fees, and other regulatory safeguards that were intended to protect all involved parties to the transaction including the Appraiser, Lender & Consumer/Borrower.

    Regardless of the tenants of Appraisal Independence, most appraisers are compelled to comply with AMC demands regardless of USPAP Standards or even the smell test of reasonability.

    I’ve been a certified residential appraiser involved in the appraisal business for an excess of 20 years and was trained by an MAI, Kern G Slucter. It amazes me that I’m continually asked to provide additional comparable sales and/or listings, regardless of availability to comply with “Guidelines” which are often referred to by AMC staff as requirements would be no additional compensation or regard to the assignment issues and detailed explanation provided by the appraiser.

    The system needs to be changed to a “Blind Pig” system of appraisal assignment order and it does not require the use of AMC in their traditional sense, but rather a blind selection of QUALIFIED appraisers, with very narrow guidelines for removal of an appraiser or lender blacklisting of that appraiser. A system of this type would Fully Support Appraisal Independence while reducing the cost to the consumer, ultimately paying for the appraiser’s services.

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