160 E 300 S , SLC UT 84111

(801) 530 6747

realestate@utah.gov

www.realestate.utah.gov Division of Real EstateUtah Department of Commerce

Gary R. Herbert, Governor Francine A. Giani, Executive Director Jonathan Stewart, Division Director

Director’s Message . . . . . . . . . . . . . . .1RE License Renewal Reminder . . . . .2Mortgage Call Reports . . . . . . . . . . . . 3Appraiser Qualification Changes . . . . 3Thank You Commissioner Ashton . . . 4Kagie’s Korner . . . . . . . . . . . . . . . . . . 5Farewell Carla . . . . . . . . . . . . . . . . . . 6Appraisal Updates. . . . . . . . . . . . . . 7-8Appraiser Impartially Impractical?..9-10Welcome Commissioner Perry . . .. . 11Rule Developments . . . . . . . . . . . . . 11Lending Manager Licensing . . . . 12-132014 Instructor Workshop . . . . . . . . 13Appraisal Fee Study . . . . . . . . . . 14-15Division Question and Answer . . 16-17Mortgage License Renewal . . . . . . .18Licensing and Disciplinary . . . . .19-22

In This Issue

Several weeks ago I had the oppor-tunity to speak to a group of RealEstate Brokers about how to protectthemselves from violating statutesor administrative rules. For this arti-cle, I will focus on three things thatall licensees can do to protect them-selves.

1- Resolve issues before com-plaints are filed with the Divi-sion.

Director’sMessage

Something the Division sees prettyconsistently is a complainant whohas attempted to work out their con-cerns with a licensee with no reso-lution. Working out a problembefore a complaint is filed with theDivision can benefit you by helpingyou retain customers and possiblyget additional business. Whateverthe cost is to resolve the complaintup front, it will most likely save youtime and money in the long run.

Resolving problems early on willalso save you the time of trying todefend yourself to the Division,Commission, or Board—time thatcould be spent working with clients.It is an opportunity cost that can beavoided.

This can also help you avoid seeingyour name in a future Divisionnewsletter. We have been toldmany times that everyone turns tothe disciplinary section of the news-letter first to see who has “gotteninto trouble.”

That does not mean that all com-plaints can be resolved up front, orthat you should always do whatever

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Fourth Quarter 2014

Protect Yourself

Jonathan Stewart

Division of Real Estate

Paper License Renewal & CE CompletionForms No Longer AcceptedSince the third quarter of 2010 theDivision no longer processes paperlicense renewal forms or manuallyenters individual licensee continu-ing education (CE) course comple-tion data. Since the Division nolonger accepts or processes paperrenewals or CE credits for manualentry, real estate and appraisal li-censees need to complete their on-line license renewal in the DivisionRELMS System by the end of theirlicense expiration month. Adminis-trative Rule R162-2f-204(2)(b)(iii)(A) states that:

Completed continuing edu-cation courses will be credit-ed to an individual when thehours are uploaded by thecourse provider pursuant toSubsection R162-2f401d(1)(j).

Therefore, it is essential that licens-ees factor in sufficient time to allowfor course providers to upload CEcourse completion data into the li-censee’s individual RELMS ac-count, before they attempt to renewtheir license in RELMS. Licenseeswho delay completing their continu-ing education until the last few busi-ness days of the month run the riskthat their recently completed CEcourse completion documentationdoes not have sufficient time forcourse providers to enter it into thelicensee’s individual RELMS ac-count.

Despite the requirement to renew inRELMS by the end of the month,every month on the last day or two

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of the month, a few licensees objectto the Division that they have com-pleted their last continuing educa-tion (CE) class(es) and desire tosubmit their CE certificate(s) to theDivision to be manually processedin order for the licensee to renew ontime. Once again, the Division nolonger processes paper license re-newals or manually enters CE com-pletion data into licensee records.Licensees need to factor in suffi-cient time for the CE courseprovider(s) to bank their credits,and for those credits to be enteredinto their RELMS account.

You may recall that CE banking isnot an instantaneous uploading pro-cess or system. There is a time lagfrom when course providers enterCE course completion data, andwhen that data is electronically en-tered into the licensee’s individualaccounts.

The downside to the banking sys-tem we employ is the time delay fordata entry (typically several busi-ness days). The upside to thebanking system the Division em-ploys is the cost (zero). Neither ed-ucation providers nor individuallicensees are charged anything for

the banking service the Divisionemploys despite typical bankingfees of $1.50 per CE credit hourthat providers typically charge forinstantaneous CE banking. That isa huge savings of as much as$150,000 per year by Utah RealEstate Licensees not having to payCE banking fees assessed for “live”CE banking!

However, in order to ensure a time-ly renewal of their license, licenseestherefore need to either have proofof completion of their entire requiredCE by the 15th day of the month ofexpiration (R162-2f-204 (1)(a-c)),OR have renewed their license inthe RELMS system by the end oftheir license expiration month.

Please plan ahead in order to avoidpaying an unnecessary $50 late feeby completing your approved CE bythe 15th day of the month of licenseexpiration. The Division thanks andcongratulates the 95+% who com-plete their CE in a timely manner,renew their license with the RELMSsystem by the last day of the month,and thus avoid an unnecessary latefee.

Division of Real Estate

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Appraisal Qualifications Board (AQB) changes have now taken effect. Any candidate for Licensure or Certification nowmust meet all qualification criteria changes that were first announced by the Division back in March 2012. As statedpreviously there will be NO exceptions to the new AQB requirements.

Some candidates have contacted the Division and posed the question that since they were approved to sit for a Li-censed or Certification exam in 2014, “Can they submit their application once they pass the exam in 2015”? Other ap-plicants have asked “since my application was submitted in 2014, will I be evaluated and able to be tested under 2014AQB requirements? The response to both of these questions is that after December 31, 2014, any application for li-censure or certification must meet all 2015 AQB qualification criteria.

The Division appreciates the considerable amount of time and effort many applicants, educators, supervisors, volun-teer experience reviewers, and staff members took to assist and prepare candidates in advance of the 2015 deadline.Unfortunately some candidates failed to meet all necessary requirements and were not licensed or certified before yearend.

Thanks for your conscientious efforts and we look forward to the competent and quality work product produced by thewell qualified 1,241 Licensed or Certified appraisers in Utah!

Appraiser Qualification Criteria ChangesTake Effect

Mortgage Call Reports - Changes ComingUtah licensed entities have been submitting Mortgage Call Reports (MCRs) since the third quarter of 2012. This year,mortgage entities submitted their Call Reports in a more timely manner and fewer were held up in the renewal processfor failure to complete the reports. As of this writing 126 out of 844 entities have not submitted their Call Reports andtherefore have been unable to renew. That means 85% of our entities completed their Call Reports in a timely mannerand were able to renew early in the renewal cycle!

For a better understanding of the Mortgage Call Report, the MCR is a quarterly report of condition a mortgage compa-ny submits through the NMLS. These quarterly reports are comprised of two parts: the state-level “Residential Mort-gage Loan Activity Report” (RMLA) and the entity level “Financial Condition Report.” In addition, most companies filethe “Standard” version of the MCR. Companies that are Fannie Mae or Freddie Mac Seller/Servicers or Ginnie MaeIssuers file the “Expanded” version of the MCR.

The following enhancements to the MCR are set to be implemented:· The addition of nationwide servicing fields which will be required for all companies and additional state-specific

servicing reporting for Expanded MCR filers. This will require reporting starting in the first quarter of 2015.· The inclusion of fields to capture the amount and count of Qualified Mortgages (QM) and Non-QM loans that

are closed and funded during the quarter. This data reporting will also be required of all companies starting inthe first quarter of 2015.

· New data fields to capture changes in loan application amounts during a quarter for each state will be includedfor reporting in the first quarter of 2015, but enforcement on this reporting requirement will begin in the firstquarter of 2016.

· The addition of written guidance on the definition of the term “application” will be introduced in the first quarter of2015 as guidance, with the formal adoption as the official MCR definition delayed until the first quarter of 2016.

Division of Real Estate

plaint. The Division wants to find outwhat actually happened; if youchoose to not cooperate, we have tomake a decision based on the infor-mation we have.

3- Rely on up-to-date statutesand administrative rules.

This occurs less often, but is stillworth mentioning. Stay up-to-dateon the statutes and administrativerules and any changes that aremade. If you rely on outdated stat-utes and rules, you might think youare following the law, but actually bein violation. We have had peoplecome to the Division to defend them-selves against allegations using stat-utes or administrative rules that aresometimes years old. The Division isrequired to use the version of thestatutes and/or administrative rulesthat were in place at the time of theconduct. If the conduct happened in2012 and you bring in a copy of thestatute from 2009, it will be a prob-lem. This is why it is so important toread the newsletter, attendcommission/board meetings, andstay up-to-date on any changes thatmay occur with statutes and rules.

The Division would like to focus itstime and attention on egregious vio-lations. A lot of complaints againstlicensees can either be resolved pri-or to a complaint being filed with theDivision, or can be resolved morequickly if a respondent cooperateswith the Division. You can help your-self and your business by taking afew simple steps. All of us at the Di-vision of Real Estate wish each ofyou a happy, healthy, and success-ful new year.

it takes to resolve a concern, butit’s usually best to at least attemptto address issues before a com-plaint is filed with the Division.

For example, we have heard onseveral occasions about real estatebrokers that have been approachedby a client of the brokerage com-plaining about the agent that repre-sented them. The broker, withouttalking to the agent in question andwithout reviewing the file, will sidewith their agent instead of findingout as much as possible beforemaking a determination about whowas wrong. Maybe your agent didnothing wrong, but if they did,wouldn’t you want to know, resolvethe complaint, and avoid similarsituations in the future?

2- If a complaint is filed withthe Division, cooperate withus in the investigation.

This may seem counterintuitive, butmore often than not, it will speed upthe process and help to achieve amore favorable outcome. Part ofthe investigative process includesallowing the respondent to givetheir side of the story, provide doc-uments or testimony, and answerquestions the Division may have.Often people refuse to cooperate,but this part of the process is thebest time for a respondent to de-fend themselves. Many times a re-spondent will provide the Divisionwith information that helps us de-cide to close the case. By answer-ing our questions and cooperatingwith an investigation we get thewhole story and can make an in-formed decision about how to pro-ceed. Without this part of thepuzzle, we are forced to rely on on-ly what comes in with the com-

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Thank YouCommission

MemberAshton

We have been very fortunate tohave had Kay Ashton serve on theReal Estate Commission from June2006 – November 2014. Kay hasbeen serving as the public memberfor the commission and has an ex-tensive mortgage background. Hehas been working in the industry forover 30 years. Kay has also servedon many different boards and boardof directors in the mortgage industry.Kay is committed to the excellenceof licensees in the Real Estate andMortgage professions and servingfellow licensees in many capacities.

We appreciate the guidance and di-rection that Kay has provided thereal estate industry during his contin-ual years of service and wish himcontinued success in his future en-deavors.

Division of Real Estate

The Division continues to receivephone calls about referral fees,including when and under whatcircumstances a licensee may payor receive referral fees. I have pre-viously written about this issue,but I thought that with the recentincrease in questions on this topic,now would be a good time to re-address the issue and to give afew examples for the real estateand mortgage industries.

Real Estate

Q: May an inactive real estatelicensee be paid a referral feefor referring a client to an activeagent?

A: NO.

Utah Code § 61-2f-302 (2) (a) Aninactive associate broker or salesagent may not conduct a real es-tate transaction until the inactiveassociate broker or sales agentbecomes affiliated with a principalbroker and submits the requireddocumentation to the division.

A referral fee is a real estate trans-action because the act of pros-pecting for a fee requires alicense. In order to be paid a refer-ral fee, a licensee must be activelylicensed with a Principal Brokerand may only receive payment ofthe fee through the licensee's Prin-cipal Broker.

Q: May a real estate licensee

Kagie’sKorner

pay a referral fee to an unlicensedperson or entity for securing realestate transaction/prospects?

A: Generally, the answer to thisquestion would be no, althoughthere are a couple of exceptions un-der the rules depending on whetherthe transaction is a real estate orproperty management transaction.Administrative Rule R162-2f-401b(12) a licensee may not pay afinder's fee or give any valuableconsideration to an unlicensedperson or entity for referring aprospect, except that:(a) a licenseemay give a gift valued at $150 orless to an individual in appreciationfor an unsolicited referral of aprospect that results in a real estatetransaction; and(b) as to a propertymanagement transaction, a licenseemay compensate an unlicensedemployee or current tenant up to$200 per lease for assistance inretaining an existing tenant orsecuring a new tenant;

A real estate licensee may not go toa person or entity and say, “If yousend me a referral and it results in atransaction, I will pay you a referralfee.” This type of statement is a so-licitation and would violate this rule.However, a licensee's uncle mightsay to his neighbor, “My nephew isan agent, and he can help you sellyour house.” This would be an unso-licited referral. If the neighbor thenlists his home with the licensee andthe home sells, the licensee couldgive his uncle a gift valued at up to$150. The key question to determineis whether this referral is solicited. Ifsolicited, no referral fee can be paid.If unsolicited, a referral fee can bepaid in the amounts referencedabove. Be wary though about creat-ing an expectation for the fee, as

this could be seen as being a solicita-tion.

In a property management transac-tion, a referral fee up to $200 may begiven to an unlicensed employee ofthe management company, or a cur-rent tenant of the management com-pany, when they help secure a newtenant or retain an existing tenant. Ifthe individual is not in one of thosetwo categories, they cannot be paidthe referral fee.

Q: May a real estate licensee payan unlicensed individual or compa-ny for a list of potential clients.

A: NO.

Such action would be a violation of61-2f-401 (5) paying or offering to payvaluable consideration, as defined bythe commission, to a person not li-censed under this chapter, except thatvaluable consideration may beshared: (a) with a principal broker ofanother jurisdiction. The Division maytake action against the licensee forviolating the above statue, and alsoagainst an unlicensed individual orcompany for the unlicensed activity.All activity geared to generate a po-tential client requires a real estate li-cense to make the initial contact withthe prospective client.

Q: May a real estate licensee re-ceive a referral fee for referring aclient to a mortgage licensee?

A: NO.

Administrative Rule R162-2f-401bProhibited Conduct As Applicable toAll Licensed Individuals. (13) accept areferral fee from: (a) a lender; or(b) a mortgage broker;

A real estate licensee accepting any

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Referral Fees

Division of Real Estate

A: No. A mortgage licensee is pro-hibited by statute from either payingor receiving a referral fee.

Utah Code § 61-2c-301: (1) A per-son transacting the business of resi-dential mortgage loans in this statemay not (a) give or receive compen-sation or anything of value in ex-change for a referral of residentialmortgage loan business; or (c) giveor receive compensation or any-thing of value in exchange for a re-ferral of settlement or loan closing

services related to a residentialmortgage loan transaction.

If in doubt, or if you have any ques-tions about whether a proposed re-ferral fee would fall under any of theabove restrictions, I would stronglyrecommend that you talk with yourPrincipal Broker or Principal Lend-ing Manager. They are a licensee'sfirst line of defense for compliancewith the statutes and rules govern-ing referral fees.

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CarlaWestbroek

RetiresFrom theDivision

type of referral fee from a mortgagelicensee is prohibited by rule andstatue. If the mortgage licenseepaid a referral fee and it was ac-cepted by a real estate licensee,both licensees would be in violationof their respective statues and rulesand could face fines of up to $5,000per violation.

Mortgage

Q: May a mortgage licensee giveor receive a referral fee?

Any Trainee or Appraiser in Utahknows and has most likely interact-ed many times over the years withCarla Westbroek, the Division Ap-praisal Licensing Specialist. After asuccessful career, Carla has decid-ed to retire and spend more time athome with her family, especially hergrandkids.

Carla has been instrumental in as-sisting the Division and appraisalindustry in a number of ways, in-cluding, reviewing and advancingappraisal applications and renew-als, approving qualifying and con-tinuing education courses,submitting Utah appraiser rosters toThe Appraisal Subcommittee(ASC), and registering AppraisalManagement Companies (AMCs).

Mark Fagergren (Division Licensing& Education Director) will especiallymiss the thorough and conscien-tious efforts of Carla. “Carla hashelped the Division weather twomajor AQB criteria changes (in2008 and 2015). She assisted inthe introduction and implementationof appraiser trainee registration and

then licensing, and Appraisal Man-agement Company (AMC) registra-tion and subsequent surety bondingrequirements.

In addition, every two years the Di-vision is audited by the ASC, andthanks to her capabilities and atten-tion to detail the Division has com-plied with, and in a number ofinstances exceeded their stringentrequirements”.

We thank Carla and will miss hercontagious laughter and her meticu-lous work. We are also very happyfor her and wish her many goodtimes as she enters this new phasein her future as she now becomesan “Appraiser LicensingEmeritus”(ALE).

Carla would like to sincerely thankthe group of experience reviewerswho have devoted an incredibleamount of time to assist Carla andthe industry, the past and presentmembers of the Appraisal Licensing& Certification Board, and all thosewho have kindly and generouslyassister her over the years.

Division of Real Estate

on VA loans. As such, the VA is an-ticipating that it will look to increasethe number of complaints that arefiled with state licensing agencies.

The Fannie Mae panel member dis-cussed a large number of changesand issues related to Fannie Maeguidelines. First, Fannie Mae has aquality management process that itconducts. Typically, the process ofreviewing appraisals has been oc-curring three to four years after aloan is originated, but now FannieMae will conduct the quality man-agement process at the start of theloan origination process.

Fannie Mae's representative saidFannie has been gathering a largeamount of data from appraisals andon specific appraisers. Fannie thenuses all of this data to look at dis-crepancies between each apprais-er's work, such as reviewing thequality and condition ratings as-signed by an appraiser or adjust-ment amounts used. Fannie expectsthat the quality and condition ratingor adjustment data may change withnew information, but not when mak-ing changes within a particular as-signment.

For example, Fannie will review theamounts used by an appraiser foradjustments made to GLA. Fanniehas seen examples from appraiserswho make a consistent adjustment,such as $10 per square foot for GLAadjustments, regardless of otherconditions.

These other conditions, which couldaffect the adjustment basis, could be

things such as varying GLA sizes(e.g. 1,000 GLA homes v 6,000square foot GLA homes), quality andcondition of homes, or values ofhomes (e.g. $200,000 homes v multi-million dollar homes). Fannie recog-nizes that a flat adjustment rate of$10 per square foot of GLA may holdfor a particular class of house, butthat the amount may not be appropri-ate for other classes of homes in gen-eral.

Attendees were told Fannie usesmost of the data that it gathers to ed-ucate appraisers upon learning whereappraisers have potential issues intheir work. Fannie's rep said there isalso a misconception about how thedata is used. Fannie does not auto-mate reviews of all appraisalsthrough the data gathered. Fanniewill use the data to flag certain issuesthrough an automated process, butthen a person will review the apprais-als in question when addressing anyspecific issues with an appraiser'swork.

Fannie's rep also told attendees thatthere are a number of myths aboutFannie's requirements. The rep sus-pected that even though Fannie triesto correct the myths through trainingfor appraisers and underwriters,many myths continue to cause prob-lems for appraisers. As such, Fannieis looking to correct some of theseissues in the changes to their guide-lines.

One of the myths discussed wasabout adjustments related to qualityand conditions ratings. Fannie recog-nizes that even though a subject and

Appraisal Government-Sponsored EnterpriseUpdates

7

In October, Appraisal InvestigatorTheron Case and I attended the an-nual conference of The Associationof Appraisal Regulatory Officials.One of the subjects that I found ofparticular interest and thoughtshould be passed on to our apprais-er licensees was a session regard-ing Government-SponsoredEnterprise (GSE) updates in whichrepresentatives from FHA, FannieMae, and the VA were present todiscuss either recent changes totheir guidelines, or forthcoming up-dates.

FHA's representative told confer-ence attendees that FHA is workingon catching up with the 20th century,and would be making numerouschanges to their guidelines. Onechange that FHA is looking to makeincludes requiring a three year saleshistory on comparable sales. This iscurrently the case with the subjectproperty, but will also at some pointbe applied to comparables.

The VA representative discussedhow the VA has contracted withCoreLogic to use software to per-form checks on VA appraisals. Thespokesperson said by using thisnew software, the VA will be assist-ed in reviewing and verifying infor-mation about comparables used inappraisal reports.

The VA representative stated thateven though it is difficult for apprais-ers to become eligible to perform VAappraisals, the VA is aware of anumber of problem areas with ap-praisers authorized to do appraisals

Division of Real Estate

a comparable may be in the samequality range, there may be an ad-justment warranted. If that is thecase, Fannie asks for an explana-tion to be noted in the appraisal forthe reason an adjustment is made.

Another myth is in regard to compa-rable ages and distances from thesubject, specifically the "one mile"distance issue. Fannie's rep saidFannie does not have any require-ments regarding comparables beinga mile from the home, but suggest-ed any discrepancies be explained.

Also, the rep said adjustmentsmade on the grid above the GLAline generally just need an explana-tion in the appraisal. The rep saidGLA and adjustments made belowthe GLA line are generally under-standable. Fannie's rep again notedthat there may be some thoughtneeded about adjustment amounts.For example, appraisers may adjustbathrooms at $2,000 per bathroom,but does not take into account ahome selling at about $150,000 ver-sus a home selling for $650,000and that bathrooms were adjustedat $2,000 per bathroom 30 yearsago.

Finally, the last myth had to do withFannie's 15%/25% adjustmentguidelines. Fannie was fine withappraisers going past these guide-lines, but wanted explanations insupport of going past the guide-lines. Fannie's rep said that whenappraisers under-adjust differences,especially to stay within the15%/25% guideline, it leads to ap-praisers over valuing homes, canlead to larger issues, and is unac-ceptable.

The rep said he did not know why

why underwriters or others have notaccepted appraisals that go abovethe 15%/25% guidelines when ex-plained, as this is allowed by Fan-nie. The rep said since thisparticular issue has been problem-atic and has the potential to lead toover valuing homes, Fannie willsoon be removing this guideline inits entirety.

Lastly, each representative wasasked about whether they specifi-cally allow trainees to do work fortheir appraisal assignments. Fan-nie's rep stated that trainees can dowork on Fannie assignments, buttrainees can only sign reports if al-lowed by their particular state. (Utahdoes not allow a trainee to sign, buta person licensed or certified maysign if acquiring experience to ob-tain a different level of certification.)FHA's rep stated a trainee is al-lowed to do work, but that a certifiedappraiser must do the inspectionand analysis. FHA does require thatthe work done by the trainee be dis-closed. VA's rep said VA policy issimilar to FHA in that the VA ap-praiser must inspect the property,and the work done by the traineeneeds to be disclosed in the ap-praisal. The VA will hold a trainerresponsible for the trainee's work.

Certainly, one of the things to takeaway from the conference presenta-tion is this: ensure that your ap-praisals have enoughdisclosure/comments regarding thereasoning for adjustments made orfactors considered. This seems tobe a common issue that the Divi-sion sees as well, and usually iswhere we spend our time question-ing appraisers and their reports.Also, this shows that guidelines areuseful, but are not necessarily amake-it-or-break-it issue when com-ments are provided.

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Utah! Division of Real Estate

Director ………… Jonathan StewartEditor/Contributor . Mark FagergrenContributor/Layout … Mykah TravisContributor …………… Jeff NielsenContributor ………… Justin BarneyContributor …………….. Jan BuchiContributor …………….. Van KagieContributor ……….… Theron Case2014 Published by

Utah Division of Real EstateDepartment of Commerce

160 E 300 S (84111)PO Box 146711SLC UT 84114(801) 530-6747

Real Estate Commissioners

Russel K. Booth, ChairLerron E. Little, Vice ChairLori ChapmanCalvin MusselmanWilliam O. Perry IV

Residential Mortgage RegulatoryCommissioners

Steve A. Hiatt, ChairLance Miller, Vice ChairJohn T. GonzalesCathy J. GardnerGeorge P. Richards

Appraiser Licensing andCertification Board Members

John E. Ulibarri, II, ChairKristin Coleman-Nichol, Vice ChairDaniel BrammerPaul W. ThrondsenJames S. Bringhurst

Division of Real Estate

Standards of Professional AppraisalPractice (USPAP) gives a why it isneeded when it states, "The pur-pose of USPAP is to promote andmaintain a high level of public trustin appraisal practice by establishingrequirements for appraisers."

For this article, I would like to dis-cuss "why" appraisers need to beimpartial. And "why" those involvedin any transaction using an apprais-al need an impartial party involved.To have us all on the same page Ihave found a reasonable definitionof impartiality.

Impartiality (also called evenhand-edness or fair-mindedness) is aprinciple of justice holding that deci-sions should be based on objectivecriteria, rather than on the basis ofbias, prejudice, or preferring thebenefit to one person over anotherfor improper reasons. 1

The first question of "why" apprais-ers need to be impartial has aneasy answer: the law requires youto be. Under the Conduct section ofthe USPAP Ethics Rule it states,"An appraiser must perform assign-ments with impartiality, objectivity,and independence, without accom-modation of personal interests." 2

Sure, there are other possible an-swers to this question, but I thinkthose can also be addressed withmy second question: Why do thoseinvolved in a real estate transactionusing an appraisal need an impar-tial party involved?

Probably the best analogy is sports.

Each of the teams and fans hastheir agenda. Win, that's what reallymatters, right? In sports emotionsrun high. At times there is a lot onthe line and hours upon hours havebeen spent training for those gametime moments. An important aspectof sports is that neutral parties (ref-erees) are impartial and act inde-pendently of the parties involved.Anytime allegations of lack of im-partiality arise, people become up-set and leave the event with afeeling of being cheated.

In real estate, emotions also runhigh. Each transaction has a num-ber of players with a lot on the line,and at times parties involved havemany hours devoted to the propertyor ability to obtain the property.

Because each of the parties in-volved has their own best interestsin mind, the information they arewilling to share is that which bene-fits them. They are their own bestadvocate and rightly advocate fortheir position. But they are also of-ten blinded to the positions that donot support their interests. I guesswe would attribute this to humannature.

It is vital to have a disinterested par-ty who everyone can recognize asbeing impartial to each other's posi-tion, of being objective in their deci-sions and rational, and independentof all parties involved.

Having the "right" or "correct" valueplaced on a property is in each par-ty's best interest. No one likes to be,or feel, cheated. Feeling cheated

9

Is Impartiality Impractical, Impossible, or abasis for the appraisal profession?I recently had a late night discus-sion with my old business partner,cousin, and friend. He left the ap-praisal profession to pursue otheropportunities with computer soft-ware and brings to our discussionsinteresting thoughts on current busi-ness practices and systems.

One of the issues he faces in hiscurrent work environment is helpingthose with whom he works to re-member why they are in business,and why it is that their customerspurchase software from their com-pany.

It brought up in our discussion the"why" question. He mentioned howoften in the pursuit of the how andwhat, the why is forgotten.

In looking further into this question Ifound a number of thoughts andarticles investigating the "why"question.

Mark Twain is often attributed withsaying ,"The two most importantdays in your life are the day you areborn and the day you find out why."

The Division of Real Estate missionstatement first tells us why the Divi-sion is here and then explains howwe accomplish the why. It states;"The mission of the Utah Division ofReal Estate is to protect the publicand promote responsible businesspractices through education, licen-sure, and regulation of real estate,mortgage and appraisal profession-als."

The preamble found in the Uniform

Division of Real Estate

instigates the fight or flight instinct.A buyer that finds they have over-paid for a property is then left toseek a legal recourse, if possible, tocorrect the situation or walk away,leaving the lender to deal with theproblem. It may be possible for aseller to benefit from this situation.However, if a resulting lawsuit en-tangles the seller, any benefit willlikely be erased.

The appraiser is the stabilizing forceamong the parties involved in atransaction where each has theirown needs and agenda. An ap-praiser is able to gather and devel-op the necessary information tosolve the problem. An appraiserwears many hats. First, an apprais-er is an investigator, who research-es and develops the relevantinformation needed to solve the val-ue problem. This often involvestalking with knowledgeable parties,performing research and inspec-tions, and then gathering all of theinformation to perform an objectiveanalysis. But it is not enough togather and make an opinion of theinformation. An appraiser thenwears the hat of a reporter in howthey take the information and theresulting analysis and create a re-port which the parties involved canunderstand.

Too often, I find the parties involvedare unable to follow how the ap-praiser jumped from A to B. Theappraiser needs to remember whothe client and intended users are.Doing an appraisal for a lender thathas an underwriter who has readand reviewed thousands of apprais-al reports would require a differentamount of explanation than one thatis done for a divorce. In a divorcesituation, the client or intended us-ers may have only seen a few ap-praisals.

An impartial party (appraiser)should see through the smoke cre-ated by the bias or agenda of otherparties involved. Often both sideshave valid arguments to put forth asto why a value on the high range orlow range is supported, but moreoften it is the smoke of their person-al needs that is given or used to tryto influence the appraiser.

There are many professions thathave a primary focus to advocatefor their client. When you hire a realestate agent or an attorney, youreally hope they are your advocateand have your best interest in mind.The parties involved also know orexpect those types of professions tobe in an advocating position, where-as the expectation of an appraiserby participating individuals, whetherthose parties are a client or not, isthat the appraiser is impartial, ob-jective in their decisions, and actsindependently of all parties.

Often, while investigating com-plaints here at the Division, thereappear to be times where an ap-praiser may have been influencedby one or more of the parties in-volved. Over the course of time, I'venoticed a pattern mostly in nonlending situations, but this is notalways the case.

Here is an example of the type ofcase I am describing. An appraisalis ordered, and one of the partiesinvolved does not like or understandthe resulting opinions (e.g. value). Anew appraisal is ordered by the par-ty not agreeing with the first ap-praisal.

When ordering the second apprais-al, the first appraisal is used as areference by the non-agreeing partyto show the second appraiser theirissues and problems with the first

report. This party is trying to influ-ence the second appraiser as towhat is wrong in the first appraisal,and why. Often, the party who or-dered the original appraisal is notoffered a chance to express theiropinion of the first appraisal or offerinformation they have about theproperty to the second appraiser.

In some of these types of com-plaints we review, both reports areat opposite ends of the value spec-trum. It is also not uncommon thatboth reports share at least onecomparable. Oftentimes, that com-parable value adjusts at the mid-way point between both appraisers'opinion of value. In one case in par-ticular, that common comparableappeared to be the most similar ofall the sales used in both reports,yet, in one appraisal, that was thehigh sale used, while in the other, itwas the low sale.

Although I do not think an appraiserpurposefully tries to be influenced, Ioften wonder what their opinionwould have been if they had heardthe other side's thoughts as part oftheir review of information. Althoughthis is often not possible because ofthe confidentiality rule, an appraiserneeds to remember the USPAPEthics Rule requires them to be im-partial, objective, and act indepen-dently.

It is this impartiality, objectivity, andindependence that sets the apprais-al profession apart from other valu-ation or price experts, and it allowsthe parties involved to know theywere treated fairly.

1 http://en.wikipedia.org/wiki/Impartiality2 Uniform Standard or Professional Ap-praisal Practice. Ethics Rule, Conduct,Line 229-230 page U-7

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Division of Real Estate

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To view and comment on any proposed or amended rules, please visit the Utah State Bulletin athttp://www.rules.utah.gov/publicat/bulletin.htm

Appraisal ManagementRule 162-2e-401. A proposal to amend this rule was filed November 21, 2014. The proposed amendment providesthat failure by an Appraisal Management Company (AMC) to pay an appraiser within 45 days of completion of an ap-praisal assignment is unprofessional conduct by the AMC, subjecting the AMC to disciplinary action. The proposedrule amendment is open for public comment until January 14, 2015.

AppraisalRules 162-2g-102, 304a, 304b, 304c, 304d, 502b, and appendices1-3. These administrative rules were amended toupdate the education, experience, and supervisory/trainee rules which go into effect January 1, 2015. In addition, therule amendment specifies prohibited conduct by continuing education providers.

MortgageRule 162-2c-201. A proposal to amend this rule was filed December 4, 2014. The proposed amendment provides athird option by which an applicant for a lending manager’s license may demonstrate the required industry experience.In addition, the amendment allows an applicant for a lending manager license to request approval from the Division totake the prelicensing education prior to verifying the applicant’s experience if verifying the experience could affect theapplicant’s current employment status. If the applicant is approved for the prelicensing education prior to documentingthe necessary experience, the applicant assumes the risk of time and expense of prelicensing education, testing, andapplication fee with no assurance that applicant’s experience will qualify the applicant for licensure as a lending manag-er. The proposed rule amendment is open for public comment until February 2, 2015.

Real EstateRule 162-2f-206. A proposal to amend this rule was filed November 21, 2014. The proposed amendment would addthe topic of water law, rights, and transfer to the list of continuing education core topics. The proposed rule amendmentis open for public comment until January 14, 2015.

Rule Developments Since October 1, 2014

Welcome Commission Member William O. Perry IVI am honored to serve as a new Commissioner of Real Estate for the State of Utah. I look for-ward to working with the real estate industry in our great state. I am currently employed as VicePresident and General Counsel of Perry Homes, Inc., a Murray, Utah based conglomerate ofhomebuilding and real-estate development companies with operations and properties in Utah,Idaho and California. Our company has built over 9000 homes and been deeply involved in realestate development in Utah since its inception in 1976. I have been in my current position for 12years.

Prior to joining Perry Homes I was a corporate attorney at Dechert, LLP in Philadelphia, Pennsyl-vania where I specialized in corporate mergers and acquisitions. I received my Juris Doctoratefrom Brigham Young University in 2000 and continue to teach at Brigham Young University asan adjunct professor at the David M. Kennedy Center for International Studies. I reside with mywife Kacey and our four children in Draper, Utah. I look forward to interacting with you as a com-missioner and helping Utah continue to be a great place for the real estate industry in the future.

Division of Real Estate

Commission Considers Additional MortgageLending Manager Licensing MethodThe Utah Residential MortgageRegulatory Commission is consider-ing expanding the methods of ap-proval to qualify to take prelicensingeducation and the Lending Manager(LM) exam, to ultimately becomelicensed as a LM in Utah. Beforediscussing the new method beingconsidered by the Commission andDivision to become a Utah LM, let’sreview the two current methods anapplicant may now use to qualify totake LM education and exam. Cur-rently applicants to become LMsare required to complete one of twoapplication methods:

1) Submit a LM application with aminimum of three years full-timeexperience in the past five yearsoriginating first lien residential mort-gages, and having performed atminimum 45 first lien residentialmortgages.

The Mortgage Commission and Di-vision recognizes and appreciatesthat other associated professionalexperience might also help to quali-fy an individual to become a LM.Thus a second application methodcurrently allows applicants to be-come LMs. The second methodwaives up to one year of full-timelending experience and lowers theminimum number of first lien resi-dential mortgages performed to 30;by completing other Commissionapproved alternative experience.The second application method isfurther described as follows:

2) Having up to one year’s full-timeexperience originating first lien resi-dential mortgages waived by accru-

ing at least 15 additional points bycompleting approved optional expe-rience; having two years (minimum)full-time experience in the past fiveyears originating first lien residentialmortgages; and having originated aminimum of 30 first lien residentialmortgages.

Thirty months of full-time experi-ence in the following activities shallbe considered equivalent to oneyear of experience as a first-lienresidential mortgage loan originatorwith possible points accruing at arate of 0.5 points per month:(a) loan underwriter;(b) mortgage loan manager;(c) loan processor;(d) certified mortgage prelicensinginstructor; and(e) second-lien residential loanoriginator

The Division process to become aLM has operated under the twomethods just described in this arti-cle for the past couple of years,however the Commission now con-templates a third qualification meth-od to accommodate individualsfunctioning as non-originating man-agers of loan originators who havenot been practicing as loan origina-tors for a number of years. Many ofthese individuals have extensiveexperience in the mortgage lendingindustry yet they currently do notqualify to become a LM becausethey have not originated loans whilefunctioning as a manager, and theirexperience is too dated. It is thistype of scenario that the Commis-sion now seeks to address with athird application method.

The third method is a proposed Ad-ministrative Rule amendment whichcan be found to view and/or com-ment on at:http://www.rules.utah.gov/publicat/bulletin.htm

In brief, this third method requiresthe following experience in order toqualify to take prelicense educationand the LM exam:

3) Submit a LM application with tenyears of full time experience provid-ing direct supervision as a loanmanager in the residential mortgageindustry within the past 12 years;

Provide evidence of having directlysupervised during the ten years, noless than five licensed or registeredloan originators;

[Note: Although the five individualslicensed or registered describedmay have changed over time, thenumber of individuals being man-aged or supervised by the LM appli-cant, must have remained at aminimum of five individuals at alltimes during the ten years and besupported by documentation]; and

The LM applicant must documenthaving personally originated a mini-mum of 15 first lien residential mort-gages within the past 5 years.

In addition to the proposal to add athird method to document the re-quired experience to apply for licen-sure as a LM, another proposedamendment is being considered forapplications under the third option

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Division of Real Estate

for applicants who may wish to pur-sue the education and testing prior toobtaining pre-approval.

LM applicants under this third pro-posed method may request approvalfrom the Division for approval to takethe prelicensing education upon theapplicant’s affirmation that:

a) the applicant’s current employmentstatus could be negatively affected bydocumenting the applicant’s experi-ence;

b) the applicant requests approval toproceed with the prelicensing educa-

tion despite not having documentedthe necessary experience;

c) the applicant understands that ifthe Division approval is granted, theapplicant assumes the risk of thetime and expense of the prelicens-ing education, testing, and applica-tion fee with no assurance that theapplicant’s experience will qualifythe applicant for licensure as a LM,and

d) the applicant would then need toapply for approval prior to request-ing the license and have their expe-rience and qualifications determinedat that time.

This third proposed method to quali-fy to take prelicense education andthe LM exam addresses those indi-viduals who have extensive industryexperience that otherwise are cur-rently precluded from qualifying tobecome LMs.

Each of the three qualification meth-ods require specific standards thathave been determined only afterlengthy public commission meet-ings. Once again, feel free to com-ment on the proposed adoption ofthe new rule allowing loan manag-ers with extensive prior experiencebut little recent experience to qualifyto become LMs, at:http://www.rules.utah.gov/publicat/bulletin.htm

2014 Instructor Development Workshop HighlightsDivision staff started off the annual IDW with several presentations. Division Director Jonathan Stewart spoke on manydifferent topics; including, industry specific legislative updates, and an introduction to the new online application pro-cess coming soon for initial applications. Director of Licensing and Education Mark Fagergren spoke on licensing up-dates in the appraisal, real estate, and mortgage industries. Lastly, Chief Investigator Jeff Nielsen’s presentationincluded information on advertising violations, unlicensed activity, and other enforcement issues.

After Division staff presentations, there was a panel discussion of experts. We were lucky to have Representative andPrincipal Broker Gage Froerer on the panel as well as a member of our Real Estate Commission (Russ Booth), Ap-praisal Board Chair (John Ulibarri II), Appraisal Board Member (Daniel Brammer), Division Director, Jonathan Stewart,and Chief Investigator, Jeff Nielsen. They each responded to questions from attendees.

On the afternoon of day one of the Workshop, the Division introduced Karel Murray. Ms. Murray’s eager and friendlypersonality made for a powerful and very humorous demonstration on how to best engage students with a dazzling pre-sentation. Instructors came away with new and innovative ideas on how to be better instructors.

Attendees for the 2014 IDW made the following comments on their evaluations:

“Absolutely love her ability to combine humor with learning/teaching.”“Excellent material and delivery! Thank you!”“Best classes I’ve been to!”“Karel did an excellent job! Her presentation was crammed with apply-able content and yet was not dry or boring. Plus Iloved her humor. Bravo!”“I loved her enthusiasm, energy, and was impressed with her experience and knowledge.”

We would like to thank Representative Froerer, industry commission/board panel members, Karel Murray, and the at-tendees of the 2014 IDW for helping to make this event such a success. We are lucky to have so many educators inthe state of Utah that take such a sincere interest in the well-being of our licensees.

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Division of Real Estate

Utah Residential Real Estate AppraisalFee Study: 2013By: Barrett A. Slade, PhD, MAI and Professor of Finance at the Marriott School atBrigham Young University

In May 2009, Freddie Mac, the Fed-eral Housing Finance Agency, andthe New York Attorney General,jointly issued a document entitledHome Valuation Code of Conduct(HVCC). This document changedthe method by which residential realestate appraisal services were pro-cured for secondary mortgage loansby requiring that appraiser selectionand mortgage production be sepa-rated. This led to significant growthin appraisal management compa-nies (AMCs).

As AMCs became more dominant inthe procurement of residential ap-praisals, so did concerns that AMCswere using their position to compen-sate appraisers unfairly. This led toinclusion of customary and reason-able fee language in the Dodd-FrankAct. Specifically, the Dodd-FrankAct requires that “lenders and theiragents compensate fee appraisersat a rate that is customary and rea-sonable for appraisal services per-formed in the market area of the

property being appraised. Evidencefor such fees may be established byobjective third-party information,such as government agency feeschedules, academic studies, andindependent private sector surveys.Fee studies shall exclude assign-ments ordered by known appraisalmanagement companies.” 1

Based on this regulation, the UtahAssociation of Appraisers commis-sioned a study to determine custom-ary and reasonable fees for residen-tial appraisals throughout Utah for2013 by surveying lenders and ap-praisers. Two separate surveyswere prepared, one for lenders andone for appraisers, to capture theunique demographic and back-ground information of each group;however, the questions pertaining toappraisal fees were identical in bothsurveys. Specifically, both groupswere asked to provide their estimateof typical appraisal fees for 2013 forfive different appraisal types forproperties located in urban, subur-

ban, and rural areas of the 29 coun-ties in Utah.

To support the study, the Utah Divi-sion of Real Estate sent email invita-tions, including links to the surveys,to all licensed and certified real es-tate appraisers, as well as to all li-censed mortgage lenders, four timesover an eight-week period. The firstemail was sent on April 16, 2014,with each succeeding email sent ev-ery two weeks. The surveys wereclosed on June 11, 2014.

Federal regulation pertaining to cus-tomary and reasonable fee studiesspecifically “excludes compensationpaid to fee appraisers for appraisalsordered by appraisal managementcompanies.” Therefore, the studydid not include appraisal fees paidby appraisal management compa-nies to Utah appraisers.

The following table summarizes theprincipal “statewide” findings of thestudy including fee comparisons forlenders and appraisers.

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1 Dodd-Frank Wall Street Reform and Con-sumer Protection Act, Public Law 111203—July 21, 2010, Title XIV-MortgageReform and Anti-Predatory Lending Act,Subtitle F—Appraisal Activities, Section1472 Appraisal Independence Require-ments, (i) Customary and Reasonable Fee.

Division of Real Estate

Form 1004 (full appraisal)

Form 1004 FHA (full appraisal for FHA)

Form 1025 (small residential income property: 1 – 4 units)

Form 1073 (individual condominium unit)

Form 2055 (exterior-only inspection appraisal)

Complete details of the study, including the individual findings for each county, can be found athttp://realestate.utah.gov/documents/UtahResidentialAppraisalFeeStudy.pdf

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Division of Real Estate

Do you have a question you have been wanting to ask an investigator but have not had the time to call? Do you havequestions about your license? We want to hear about your ideas and suggestions. All questions and suggestions willbe anonymous. Selected questions will be answered in the next newsletter.

Submit questions to: DREnewsletter@utah.gov

Division Question and Answer

Q: How can a person be approvedto speak before the MortgageCommission at a monthly meet-ing?

A: The Division works primarilywith three industries, the real es-tate sales industry, the residentialmortgage industry, and the realestate appraisal industry. Each ofthese industries has an appointedBoard or Commission which gen-erally meets once each month. Ifa comment or suggestion isbrought up during the course of areport or discussion, it will be add-ed to the agenda for the followingmonth. No discussion can be tak-en if the topic is not previously list-ed on the agenda.

The preparation of the agenda fora Commission or Board meetingbegins several weeks or evenmonths in advance. Sometimes ameeting will include one or morematters which are set for hearingat a predetermined time. Not allrequests for time to speak beforea Commission or Board at a spe-cific meeting can be approved. Alicensee who is concerned abouthis or her individual license orsome other matter pertaining tothe industry may request to beplaced on the agenda for an up-coming meeting. If a request tospeak before a Commission orBoard is approved, the amount oftime for the topic will be limited.

The process is essentially thesame to be able to speak before

the Real Estate Commission, theResidential Mortgage RegulatoryCommission, or the Real Estate Ap-praiser Licensing and CertificationBoard.

The approval process requires thefollowing steps:

1. Contact the Commission/Boardsecretary, Renda Christensen. Ms.Christensen’s email address isrendachristensen@utah.gov.

2. Explain why you want to addressthe Commission or Board, includinga description of the topic you wantto address.

All meetings of the Commissionsand Board are open to the public.Meetings are generally held on thesecond floor of the Heber Wellsbuilding at 160 East 300 South inSalt Lake City, Utah, near the Divi-sion offices. We welcome your at-tendance and participation at thesemeetings.

Q: Any chance you can run an arti-cle regarding licensing requirementsfor HOA managers who managemore than one HOA? I'm findingsome managers don't understand orknow and don't have licenses, thusmanaging against the law. Not fairfor the legal guys!

A: Currently, under Utah state law,when an HOA is formed, there hasto be a filing made to the Depart-

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ment of Commerce through the De-partment's Administration Division.This filing is not a requirement of theDivision of Real Estate, and, assuch, the Division does not reviewor regulate the filing.

As for the need of any individual orentity to hold a license to operateone or more HOAs, there is no cur-rent state requirement to do so bythe Division or any other state agen-cy. This is a commonly misunder-stood issue.

As a side note, the Division is awarethat many people with propertymanagement backgrounds act as"Community Managers" and operateone or more HOAs. This does notrequire a license from the Division.These "Community Managers,"even if they hold a license throughthe Division for other purposes, arenot required to hold a license withthe Division to run an HOA. The Di-vision has received numerous com-plaints regarding "CommunityManagers", but since there is norequirement for licensure throughthe Division, the Division does notreview complaints regarding these"Community Managers".

Some states require a license tooperate one or more HOAs. Otherstates are considering a similar re-quirement. However, Utah does notcurrently have this requirement.

Q: I frequently get agents asking meabout the process when a complaintis submitted to the DRE regarding

Division of Real Estate

aint, the Division may decide toopen a separate complaint. Also,the Division may gather informa-tion through undercover commu-nications and may open casesbased on the information ob-tained through that process.

When the Division receives acomplaint, it is first handled bythe Division's Enforcement Sec-retary to be assigned a casenumber and to be entered intothe Division's system. Once thishas occurred, complaints arereviewed by the Chief Investiga-tor. The Chief Investigator re-views complaints to ensure thatthe alleged violations are in factpotential violations of the Divi-sion's statutes or rules, and toensure that the complaint subjectmatter is under the jurisdiction ofthe Division.

For instance, complaints aboutethics violations and commissiondisputes are not under the Divi-sion's jurisdiction specifically.Complaints of this nature will bereviewed to ensure that theremay not also be a separate viola-tion of the Division's statutes orrules. Complaints that do not al-lege facts that may be a violationof the Division's statutes or rulesare closed with no further actiontaken and the complainant issent a letter discussing othercourses of action the complain-ant may pursue.

If the Chief Investigator believesthe allegations point to potentialstatute or rule violations, thecase will be assigned to an in-vestigator. Due to the number ofcomplaints filed with the Divisionand other factors, such as cur-rent case load of investigativestaff, complaints may not be as-

signed to an investigator right away.

Prior to an investigator being as-signed, the Division may contactvarious parties, including the Re-spondent (the person who is allegedto have violated statutes or rules) fordocumentation to assist in eitherhelping to determine whether a caseshould be assigned, or to get someof the necessary documents for re-view in advance of assigning an in-vestigator.

Once a complaint is assigned to aninvestigator, the investigator gener-ally will contact the various parties,including the complainant, third partywitnesses (e.g. brokers, otheragents, appraisers, other clients,etc.), and the Respondent(s) to in-terview, gather documents, etc. De-pending on the case allegations orother factors, a Respondent may notbe contacted until near the end ofthe fact gathering process.

Once an investigator has gatheredand reviewed the relevant facts in acase, the investigator will draft a re-port summarizing the facts. Thisreport is reviewed by the Chief In-vestigator for determination as towhether statute or rule violationsappear to have occurred. If the ChiefInvestigator determines there are noviolations, the case will be closedwith no action taken. Cases mayalso show problems that do not nec-essarily rise to the level of warrant-ing action. If so, the Division mayprovide feedback to Respondentsand warn them about future viola-tions based on those concerns.

If a complaint summary is reviewedand it appears there may be viola-tions by a Respondent, the case willbe referred to one of the AssistantAttorney Generals that represent the

the possible steps that can be tak-en, how it is handled by investiga-tors, and what should be expected.Can you explain this process?

A: Absolutely! But a note of cautionshould be made before delving intoa general outline of the process.Each complaint or case is fact spe-cific, so the way one case may behandled in regard to one situationmay not apply to a case that ap-pears to be similar in nature, butcontains a different fact pattern.Also, depending on what the Divi-sion is provided or learns duringthe course of gathering facts mayalter the process or cause steps tobe necessarily changed. With thatin mind, below is a general outlineof how a complaint is handled bythe Division.

The first step in the process gener-ally involves information being sentto the Division in the form of a com-plaint. This can be through a letter,email, telephone call, or throughthe actual completion and submis-sion of the Division's complaintform. Though not required specifi-cally, it is generally most helpful if acomplaint form is completed andsubmitted to the Division. Regard-less, the Division will generallyneed the individual filing a com-plaint to also provide any relevantdocuments to support the allega-tions made to the Division.

As a side note, not all complaintsare brought to the Division by athird party person or entity. TheDivision can, and has, opened anumber of cases without havingreceived a specific complaint froman individual. For instance, if theDivision learns of violations by oth-er people while reviewing a compl-

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Division of Real Estate

Second, the Division will at the veryleast notify the relevant parties ofthe outcome of the complaint. If thecomplaint is closed before it is as-signed to an investigator, the Re-spondent may never know thecomplaint was filed, as the Divisionwill not notify Respondents of thecomplaint if the Division had notcontacted the Respondent by thattime.

Third, information submitted to theDivision is generally classified as aprotected under the state's GRAMAstatutes (Government Records Ac-cess and Management Act). Assuch, information provided to theDivision will not be provided to or

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Division in administrative actions.Once this occurs, the case will ei-ther eventually be brought beforethe respective Commission orBoard for a hearing, or the ChiefInvestigator or Assistant AttorneyGeneral may settle the matterthrough a stipulated agreement withthe Respondent.

A few things should be noted aboutthis process as well. First, the Divi-sion will not generally provide updates on a complaint to the parties.An investigator on a case by casebasis may provide very general up-dates to a complainant, but this is

otherwise released as evidence dur-ing the hearing process. For licens-ees, this means that the Division willnot provide you with information or acopy of any complaint when re-questing information. Even thoughRespondents want to know the ba-sis of a complaint, if they do notknow already, the Division will notrelease that information unless oruntil it is appropriate to do so.

As stated, this is a general idea ofhow the complaint process goesfrom its start until action is taken.Hopefully this is helpful to our licens-ees to understand what to expectwhen filing a complaint or having acomplaint filed against them.

Mortgage Renewal 2014 is Now History!We made it through another renewal and time seems to be making it easier on all of us as we learn the NMLS system andadapt to the changes. This year all mortgage licensees were required to complete an additional 2 hours of Utah Law aspart of their continuing education requirement. Utah mortgage regulators have been very pleased to see the number of li-censees who completed this requirement in a timely manner and then requested and paid for their renewal. At the time ofthis writing 78% of our licensees have requested their renewal and 71% have been approved. There are 708 who have nothad their renewal approved yet pending the clearing of deficiencies on their license. If you have not received an email con-firmation through the NMLS system that your license renewal is approved and you requested it more than a week ago,please log into your filing and see if there are deficiencies on your license, license items that are holding up the approval. Ifyou requested your renewal prior to the December 31, 2014 deadline, you can continue to use your license in its currentstatus while we process the approvals for your license. In addition to receiving a confirmation email from the NMLS statingthat your renewal has been approved, you will also receive an email from the Division of Real Estate with your Mortgagelicense attached. You can print this off at your convenience.

For those who have not received an approved renewal email, please check your NMLS filing in the following manner. Login to your NMLS account and under “composite view” click on “license/registration status” and then you can click on “licenseitems.” Generally, there are corrections or additions required on your filing that you can take care of fairly easily. Mostlythey are for updating your employer history, completing the Utah two-hour CE course, or providing required documentation.If you see a deficiency for failure to complete the Utah two-hour Law course, and you know you completed it, you can emailor fax a copy of your certificate of completion and we can get the deficiency cleared and your license renewed quickly.Email to: realestate@utah.gov or fax to 801-526-4382.

If you find that you have not requested renewal prior to the end of the year and you still wish to maintain your mortgage li-cense, you can reinstate your license during the 58 days prior to February 28, 2015. You will still need to complete the con-tinuing education requirement in addition to the 2014 Late CE and the Utah two-hour Law course. Request your renewalthrough the NMLS, and pay the renewal fee and the late fee. There is an additional $50 late fee for this reinstatement. Ifyou completed your CE prior to the end of the year, but did not request renewal, you will not need additional CE, you willjust need to request and pay the renewal and late fee through NMLS prior to February 28, 2014.

Note the importance of the February 28, 2015 deadline. After that date, licensees who wish to reinstate their license will have additionalrequirements and additional fees.

Division of Real Estate

Fourth Quarter Licensingand Disciplinary Actions

APPRAISAL

MILLER, DAVID G., Farmington,certified residential. In a stipulat-ed order dated September 24,2014, Mr. Miller admitted to sever-al errors in the appraisal of a prop-erty such that the series of errorsin the aggregate affects the credi-bility of the appraisal results inviolation of Utah law and USPAP,even though the errors individuallymight not significantly affect theresults of the appraisal. Mr. Milleragreed to pay a civil penalty of$1,500 and to take the 15 hourUSPAP course. Case numberAP-12-60860

MORTGAGE

CASTLE & COOKE MORT-GAGE, LLC., Salt Lake City,mortgage entity. In a stipulationand order dated October 1, 2014,Castle & Cooke was alleged tohave committed false and mis-leading advertising. Castle &Cooke did not admit the violationsbut agreed with the Division toresolve the matter through stipula-tion. Castle & Cooke agreed topay a civil penalty in the amountof $10,000 and to update the an-swers on its disclosure form to thenationwide database. Case num-

ber MG-13-64303

TODD H. WHITAKER, Salt LakeCity, mortgage loan originator. Inan order dated October 20, 2014,the Utah Residential Mortgage Reg-ulatory Commission denied Mr. Whi-taker’s application for licensure as amortgage loan originator after deter-mining that Mr. Whitaker failed todemonstrate the financial responsi-bility, moral character, integrity,truthfulness, and competence re-quired for licensure. The Commis-sion’s decision relied upon the factsthat Mr. Whitaker had been convict-ed of communications fraud, hadunsatisfied civil judgments, tax liens,and a child support delinquency,and previously had his mortgagelicense revoked although the revo-cation was subsequently convertedto a suspension. Case number MG-14-72272

NETWORK CAPITAL FUNDINGCORPORATION, Irvine, CA, mort-gage entity. In an order dated No-vember 24, 2014, Network Capital’sapplication for renewal was grantedand placed on probation due to alle-gations by the regulatory authoritiesof several states seeking disciplin-ary action against Network Capital’slicenses in those other states. Net-work Capital has not admitted thealleged violations. Case numberMG-14-73742

NGUYEN, TRI MINH, Irvine, CA, lend-ing manager. In an order dated No-vember 24, 2014, Mr. Nguyen’sapplication for renewal of his lendingmanager’s license was granted andplaced on probation due to allegationsby the regulatory authorities of severalstates seeking disciplinary actionagainst his licenses in those otherstates. Mr. Nguyen has not admittedto the alleged violations. Case num-ber MG-14-73729

REAL ESTATE

ANDEREGG, JULIE, Lehi, salesagent. In a stipulated order dated No-vember 19, 2014, Ms. Anderegg ad-mitted to acting as a sales agent whilenot affiliated with a principal broker inviolation of Utah Code 61-2f401(3)(a). Ms. Anderegg agreed tosurrender her license in lieu of the fil-ing of a complaint and the holding of ahearing. Case number RE-13-64005

ATKIN, RANDY, Salt Lake City, salesagent. In a November 28, 2014, or-der, Mr. Atkin’s license was renewedand placed on probation for the re-newal period due to his criminal histo-ry. Case number RE-14-73860

AULT, ANITA, Elk Ridge, associatebroker. In a stipulated order datedNovember 19, 2014, Ms. Ault admit-ted to having failed to report a convic-tion for misdemeanor theft to theDivision within ten business days inviolation of Utah Code 61-2f301(1)(a)(ii). Ms. Ault agreed to pay acivil penalty of $250 for the violation.Case number RE-14-72908

BAILEY, JILL, St. George, salesagent. In an October 31, 2014, order,Ms. Bailey’s license was renewed andplaced on probation for the renewalperiod due to her criminal history.Case number RE-14-73387

Please note that Utah law allows 30 days for appeal of an order. Some ofthe actions below might be subject to this appeal right or currently under

appeal.

To view entire stipulations and/or orders search here:http://realestate.utah.gov/actions/index.html

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Division of Real Estate

BARKER, R. PAUL, Scottsdale,AZ, principal broker. In a stipulat-ed order dated November 19,2014, Mr. Barker admitted to hav-ing failed to exercise active su-pervision over the conduct of alicensee affiliated with him, hav-ing failed to maintain and safe-guard documents, and havingfailed to obtain informed writtenconsent in order to represent bothprincipals in a transaction as alimited agent. These actionswere violations of Utah Code andUtah Administrative Code. Mr.Barker agreed to pay a civil pen-alty of $20,000, complete eighthours of continuing education,hold four hours of mandatorytraining in dual agency and recordkeeping, and implement policyrequiring broker approval of anydual agency representation.Case number RE-14-70223

BOWERS, KIMMIE, Murray,sales agent. In a stipulated orderdated September 17, 2014, Ms.Bowers admitted to having failedto report a plea in abeyance with-in ten business days of enteringthe plea agreement as requiredby law. However, Ms. Bowers diddisclose the plea agreement inher application to renew her li-cense. Ms. Bowers agreed topay a civil penalty of $250 and tohave her license placed on proba-tion for the renewal period. Casenumber RE-14-72119

BRIGGS, WAYNE, St. George,sales agent. In an October 23,2014, order, Mr. Briggs’s applica-tion for licensure as a sales agentwas denied. The Commissiondetermined that Mr. Briggs did notmeet the qualifications for for

licensure due to a previous sanctionof his license to practice as a mort-gage loan originator. Mr. Briggs hasnot complied with the conditions ofthe previous sanction and did notdisclose the previous sanction in hisapplication for licensure as a realestate sales agent. Case numberRE-14-71747

CUTLER, DARCI, Salt Lake City,sales agent. In a stipulated orderdated September 17, 2014, Ms. Cut-ler admitted to having failed to dis-close criminal history in herapplication for licensure as a salesagent. Ms. Cutler agreed to pay acivil penalty of $500 and to have herlicense placed on probation for theinitial licensing period. Case numberRE-14-72350

FARLEY, CHRISTOPHER, WestValley City, sales agent. In a stipu-lated order dated October 15, 2014,Mr. Farley admitted to having failedto disclose criminal history in his ap-plication for licensure as a salesagent. Mr. Farley agreed to pay acivil penalty of $500. Case numberRE-14-72907

FORMBY, PAMELA, Draper, salesagent. In a November 28, 2014, or-der, Ms. Formby’s license was re-newed and placed on probation forthe renewal period due to her crimi-nal history. Case number RE-1473848

HAUPPA, AMY MARIE, West ValleyCity, sales agent. In a stipulated or-der dated November 19, 2014, Ms.Hauppa admitted to having failed todisclose criminal history in her appli-cation for licensure as a sales agent.Ms. Hauppa agreed to pay a civilpenalty of $500. Case number RE-14-72983

HENSLEY, RYAN LLOYD, Midvale,sales agent. In an October 9, 2014,order, Mr. Hensley's license wasgranted and placed on probation forthe initial licensing period due to hiscriminal history. Case number RE-14-72787

HILL, DEANNE, Orem, sales agent.In an October 27, 2014, order, Ms.Hill’s license was granted and placedon probation for the initial licensingperiod due to her criminal history.Case number RE-14-73273

HUNTER, JONATHAN, SaratogaSprings, sales agent. In an October31, 2014, order, Mr. Hunter's licensewas granted and placed on probationfor the pendency of court proceedingsin a criminal matter. Case numberRE-14-73386

JENSEN, LEANNE C., Taylorsville,sales agent. In a stipulated order dat-ed October 15, 2014, Ms. Jensen ad-mitted to having failed to disclosecriminal history in her application forlicensure as a sales agent. Ms. Jens-en agreed to pay a civil penalty of$500 and to have her license placedon probation for the initial licensingperiod. Case number RE-14-72406

KELLY, ROBERT D., MountainGreen, sales agent. In a stipulatedorder dated October 15, 2014, Mr.Kelly admitted to having violated Utahlaw by accepting compensation froma principal broker with whom he wasnot affiliated. Mr. Kelly had attemptedto change his affiliation to his newbroker but had failed to properly com-plete the process. Mr. Kelly agreed topay a civil penalty of $750 and to takethree hours of additional continuingeducation. Case number RE-1363993

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Division of Real Estate

KOENIG, KARL, Bountiful, salesagent. In a November 7, 2014,order, Mr. Koenig's license wasrenewed and placed on probationfor the renewal period due to hiscriminal history. Case numberRE-14-73528

LARSEN, AUTUMN, Layton,sales agent. In an October 21,2014, order, Ms. Larsen’s licensewas granted and immediately sus-pended for 30 days. Following thesuspension her license wasplaced on probation for the re-mainder initial licensing period.These actions are due to her crim-inal history and her failure to re-port one of the prior criminalcases. Case number RE-1473088

LARSEN, PETER M., Lehi, salesagent. In a November 13, 2014,order, Mr. Larsen's license wasgranted and placed on probationfor the initial licensing period dueto his criminal history. Case num-ber RE-14-73589

LINDSEY, JOSHUA, Salt LakeCity, sales agent. In an October31, 2014, order, Mr. Lindsey’s li-cense was granted and immedi-ately suspended for three months.Following the suspension, Mr.Lindsey’s license will be placed onprobation for the remainder of theinitial licensing period due to hiscriminal history and his failure todisclose his criminal history in hislicense application. Case numberRE-14-73370

LONDON, PERGINIA., Draper,sales agent. In a stipulated orderdated March 19, 2014, Ms. Lon-don admitted that she failed to dis-close criminal history in her

application for licensure. Ms. Lon-don agreed to pay a civil penalty of$500. Case number RE-14-69476

NEUMEIER, NADEZHDA, St.George, associate broker. In anorder dated November 12, 2014,Mr. Neumeier’s license was grant-ed and placed on probation for thependency of court proceedings in acriminal matter. Case number RE-14-73588

NICOLAIDES, MICHAEL JAMES,West Bountiful, sales agent. In anOctober 2, 2014, order, Mr. Nico-laides's license was granted andplaced on probation for the initiallicensing period due to his criminalhistory. Case number RE-1472754

NIELSEN, MATTHEW, Salt LakeCity, sales agent. In a stipulatedorder dated October 15, 2014, Mr.Nielsen admitted to having failed todisclose criminal history in his ap-plication for licensure as a salesagent. Mr. Nielsen agreed to pay acivil penalty of $250. Case numberRE-14-72906

NIUMEITOLU, DAVID T., Sandy,sales agent. In a November 10,2014, order, Mr.Niumeitolu's li-cense was granted and placed onprobation for the initial licensingperiod due to his criminal history.Case number RE-14-73537

PHELAN, THOMAS, Salt LakeCity, sales agent. In a November28, 2014, order, Mr. Phelan's li-cense was granted and placed onprobation for the initial licensingperiod due to his criminal history.Case number RE-14-73862

POPE, LONDON, Sandy, salesagent. In an October 23, 2014, or-

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der, Mr. Pope's license was grant-ed and immediately suspended for-failing to disclose criminal historyon his license application. In a No-vember 21, 2014, the suspensionof Mr. Pope’s license was lifted.Case number RE-14-73191

POTTER, EDWARD R., West Jor-dan, sales agent. In a November28, 2014, order, Mr. Potter's li-cense was granted and placed onprobation for the initial licensingperiod due to his criminal history.Case number RE-14-73864

PRYOR, COLE, Cedar City, salesagent. In an October 9, 2014, or-der, Mr. Pryor's license was grant-ed and placed on probation for theinitial licensing period due to hiscriminal history. Case number RE-14-72909

SKINNER, HEIDI L., St. George,sales agent. In a stipulated orderdated October 15, 2014, Ms. Skin-ner admitted to several advertisingviolations on her websites and onKSL Classified’s website. Ms.Skinner agreed to pay a civil penal-ty of $750 and to have her licenseplaced on probation for the initiallicensing period. Case numbersRE-13-64456, RE-13-64810, andRE-14-69842

WALLACE, HAROLD, St. George,sales agent. In a September 5,2014, order, Mr. Wallace's licensewas granted and placed on proba-tion for the initial licensing perioddue to his criminal history. Casenumber RE-14-72289

WEILACHER, SCOTT M.,Bluffdale, sales agent. In a stipu-lated order dated October 15,2014, Mr. Weilacher admitted to

Division of Real Estate

having failed to disclose criminalhistory in his application for licen-sure as a sales agent.

WESTON, ADAM, SaratogaSprings, sales agent. In a stipulat-ed order dated November 19,2014, Mr. Weston admitted to anadvertising violation after havingplaced a “For Sale” banner on ahome. The advertisement did notcontain the name of Mr. Weston’sbrokerage. Mr. Weston agreed topay a civil penalty of $150. Casenumber RE-14-71662

WHITAKER, BRETT D., Logan,principal broker. In a November 7,2014, order, Mr. Whitaker's li-cense was renewed and placedon probation for one year due tothe sanction of his real estate li-cense in Idaho. Case number RE-14-73530

WILEY, VICKY, Washington,sales agent. In a stipulated orderdated November 19, 2014, Ms.Wiley admitted to several viola-tions over the course of fifteentransactions. The violations werefailing to execute written agencyagreements, failing to obtain writ-ten informed consent required torepresent both parties to a trans-action, and utilizing outdated list-ing agreements. Ms. Wileyagreed to pay a civil penalty of$10,000, complete 20 hours ofadditional continuing education,and to have her license placed onprobation for one year. Casenumber RE-13-66582

WILKING, KATIE, Arlington, VA,sales agent. In a September 5,2014, order, Ms. Wilking’s licensewas renewed and placed on pro-

bation for one year due to thesanction of her real estate licensein Virginia. Case number RE-14-72296

WINDER, CLAY H., Orem, associ-ate broker. In a stipulated orderdated March 19, 2014, Mr. Winderadmitted to several advertisingviolations on his websites and onseveral social media websites.The advertisements did not meetcode requirements relative to bro-kerage information and text size.Mr. Winder agreed to pay a civilpenalty of $450. Case numberRE-13-66266

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