Who’s Afraid of the Virginia Wolf?

In this newspaper’s inaugural edition, we covered several problems in the AI XML standard and the way it’s managed (April 2008, "Paying To Use Your Own Bathroom: AI XML"). At the time of the original publication, there was already an inquiry underway by the Virginia Real Estate Appraiser Board into the Appraisal Institute/AI Ready/FNC/AppraisalPort scheme, triggered by a petition demanding that the board ban the use of appraisal portals which have not provided sufficient evidence that "ensures the integrity and unadulterated transmission of appraisal reports". (pq)

We ended that article by calling for four things to happen. First, we said that the Appraisal Institute needed to fully disclose what the financial relationship is between it and FNC. Second, we said that the AI Ready certification and AI XML format need to be "completely divorced from a for-profit, proprietary vendor and open to anyone who wants to use it". Third, we said that the AI XML format needed to mandate the inclusion of the original PDF file from the appraiser’s desktop software, so that the appraiser isn’t misled (intentionally or unintentionally) into sending something which isn’t what they think they wrote. Fourth, we said that the standard needed to remove any references to the appraiser’s signature, since there’s no good reason whatsoever for there to be an accessible copy of an appraiser’s signature in a document sent to lenders.

Nothing except the HVCC has generated the sort of response we saw to that article. It clearly struck a nerve with rank-and-file appraisers, which is perhaps why the Appraisal Institute addressed it in a national letter to its members, and why FNC has been busy in Virginia.

On the one hand, the Appraisal Institute’s letter served a good purpose by finally making it clear that the AI does indeed have a vested interest in FNC’s financial success, in the form of stock options. But on the other hand, it also posited the worn out theory that somehow a particular company (that would be us) is stirring the pot to make money from an alternative standard developed by them (our TOTAL XML).

To the contrary, we make the same money regardless of transmission format. We charge $299 for our entire suite of all delivery plugins. We don’t offer them separately. So, whether a lender or AMC standardizes on AI XML, MISMO XML, TOTAL XML, we make $299 per WinTOTAL appraiser that delivers to them.

Let’s walk through the scenarios: If FNC adds a new AI Ready client, we make $299. If FNC used MISMO XML, we’d make the same $299. If FNC magically switched to TOTAL XML, you guessed it… the same $299. It doesn’t matter if a lender goes direct, if they choose an AMC, if they use FNC’s AppraisalPort, or if they use all of those methods at the same time (some do). No matter how the delivery model works out, it’s the same to us. We make $299.

Just like the Virginia board, we don’t have to be making extra money on the side to be vocal about something that is wrong and possibly dangerous. But unlike the Virginia board, we don’t have regulatory power. Hopefully, the Appraisal Institute and FNC will finally fix AI XML, AppraisalPort, and the AI Ready certification process, and avoid being bitten by the real Virginia wolf.