What is the Experience Audit Process Anyway? Part Two
Last month, TALCB Appraiser/Investigator Marjorie Caldwell briefly described the experience audit process that all trainees must satisfactorily complete in order to become a licensed or certified appraiser in the State of Texas. Appraisers who want to upgrade from Licensed Residential Appraiser to Certified (Residential or General) Appraiser must also satisfactorily complete the audit process. The Appraiser Qualifications Board (AQB), state law (Texas Occupations Code 1103 (the Act) and the Texas Appraiser Licensing & Certification Board (TALCB/Board) rules set requirements that must be met by supervisory appraisers and trainees as part of the experience audit process.
The experience requirements for licensing can be found in TALCB Rule §153.15. Among other items, this rule addresses the appraisal experience log all applicants must sign under oath and submit with the application. We have seen problems with some of the experience logs we receive, and we wanted to highlight these concerns, so the audit process goes smoothly for applicants and supervisors alike.
First, the applicant signing the experience log and affidavit is certifying under oath that he or she either signed the appraisal report or was named in the appraisal report as having provided significant real property appraisal assistance. The applicant should take care to ensure data entered on the log is accurate, including marking the correct checkboxes, to indicate precisely who completed which task(s) during the appraisal process. Second, the supervisory appraiser must sign each page of the log and certify that the information contained in the document is true, correct and complete. Extreme care should be employed to not misrepresent the facts on any part of the experience log. Should you have a question or a concern about whether something is correct, do not hesitate to give our office a call to discuss the matter. We are here to assist when we can and want people to have an experience audit process free from problems.
One serious matter we have encountered on more than one occasion involves trainees participating in appraisal assignments without the supervisory appraiser providing active, personal and diligent supervision. This is a violation of TALCB rules that may result in disciplinary action, loss of experience credit, and denial of an application. In some instances, we have found the trainee performed all aspects of the appraisal process, including being the only person to inspect the property. Yet, the supervisory appraiser was the only person who signed the appraisal report and certification, thereby misrepresenting that the supervisory appraiser completed all of the work, without any real property appraisal assistance. This is a violation of the Act, TALCB Rules and USPAP, which may result in disciplinary action or potential criminal violations and penalties.
Another serious issue involves trainees claiming experience hours on their log for assignments in which the trainee was not named and did not sign the appraisal report. TALCB will often obtain original appraisal reports from clients as part of our review in the experience audit. There have been times when the appraisal report(s) submitted to the client do not disclose any significant real property appraisal assistance provided by the trainee and, therefore, do not match the reports submitted to TALCB in which the trainee was named as having provided significant real property appraisal assistance. This discrepancy violates the Act, TALCB Rules and USPAP, and may result in disciplinary action, including loss of licensure. It may also constitute criminal violations if the applicant and/or supervisory appraiser has knowingly submitted false documents to the Board.
Appraisers should carefully read the engagement letters associated with the appraisal assignment. Some clients do not permit the use of trainees in an appraisal assignment and do not allow transfer of the appraisal assignment to another appraiser. Appraisers should also review the certification pages in the URAR in order to gain a better understanding of what you are certifying. Representing to clients and then submitting appraisal reports that claim only the assigned appraiser completed the assignment, when in fact, a trainee provided significant real property appraisal assistance or completed the entire assignment themselves, exposes both supervisory appraisers and trainees to serious violations of the Act, TALCB Rules and USPAP. This conduct may also result in criminal penalties for making false statements to a financial institution in conjunction with a mortgage finance transaction.
In summary, please take time to ensure there are no misrepresentations on the experience logs, experience affidavits, appraisal reports or work files submitted as part of the experience audit process. TALCB staff has seen instances of deliberate misrepresentation that have exposed supervisory appraisers to disciplinary action and potential criminal consequences, including loss of their license and the denial of their trainee’s application for licensure. We do not want people to face those circumstances. We sincerely hope the experience audit process goes smoothly and results in the applicant obtaining their appraisal credential. Avoiding misrepresentations of any kind is an essential part of the experience audit process going well for the applicant and their supervisory appraiser.