Preconceived notions
I once attended a weekend retreat that involved regular communication with a small group of men I never met. This alone can be a little unnerving but, to top it off, we were not permitted to share our occupation or title with anyone else in the group. For many, this is a difficult task since much of our identification is wrapped up in our daily commitments and what we do for a living.
What was the point and why were we asked to refrain from sharing this significant part of our lives? Well the answer is pretty simple. The essence of much of the weekend was to share past experiences and personal opinions on different subjects. Occupations and titles can set preconceived notions and create barriers to conversation. If someone is more educated or holds a position of authority it can prevent others from sharing their own thoughts and opinions. Conversely, some will not considers the ideas and viewpoints of others if they don’t think they are distinguished enough to be heard.
At the end of the weekend, we were provided the opportunity to share with the rest of the group our occupations and titles. My small group was quite the mix. There was an attorney, pastor, garbage truck driver, small business owner and, yours truly, a real estate appraiser. Despite our vastly different backgrounds, everyone participated and brought quality content and insight to the conversation. This openness to sharing could have quickly been squelched had introductions been made at the beginning.
I shared this experience to demonstrate how our society can hastily equate leadership with authority and measure a leader by their experience or the number of people they have under their charge. However, leadership is much more than this. It's not about hierarchy; it's about influence. Leadership doesn’t require a title and a title doesn’t make a leader.
In the medieval drama “Braveheart,” there is a conversation between Sir William Wallace and Robert the Bruce regarding leadership. In this scene, William Wallace tells Robert the Bruce, “What does that mean to be noble? Your title gives you claim to the thrown of our country, but men don't follow titles, they follow courage. Now our people know you. Noble, and common, they respect you. And if you would just lead them to freedom, they'd follow you. And so would I.”
A place for AMCs
In response to the mortgage meltdown of 2008, the Home Valuation Code of Conduct (HVCC) paved the way for a new major player in the mortgage industry with the proliferation of appraisal management companies (AMCs). Although the AMC concept had been around for years, many believed this channel of business was the ideal solution to provide the required buffer between lender loan production and the independent real estate appraiser.
In the early years, there was very little regulation or oversight in regards to the role of AMCs. However, this quickly changed. One such regulation was the inclusion of Section 1124 of FIRREA Title XI that mandates states establish registration and set minimum requirements for AMCs that perform services related to federally-related transactions. Among others, these minimums require AMCs to ensure appraisals they manage comply with the Uniform Standards of Professional Appraisal Practice (USPAP) and are conducted independently and free from inappropriate influence and coercion pursuant to the appraisal independence standards established under Section 129E of the Truth-in-Lending Act (TILA).
The challenge
Leadership is a must if an AMC is going to be successful and compliant in serving their clients’ needs, while also working with independent panel appraisers to provide USPAP-compliant assignments that meet agreed-upon service level agreements. As I’m sure you are aware, this can be challenging at times since the client isn’t subject to the AMC’s authority and the appraisers they work with are independent third-party contractors. In other words, an authoritative leadership style isn’t a viable long-lasting solution. Instead, an AMC’s leadership approach will need to bring a value add to everyone involved.
Leading as an organization through policies and procedures
In order to lead successfully, it is critical to have well-written policies and procedures. In addition to ensuring compliance with regulatory rules and guidelines, this type of structure establishes stability and takes the guesswork out of what to do and how to move forward in all circumstances.
It’s also important for everyone in the organization to be on the same page. Otherwise, it doesn’t take long for employees and even clients to become frustrated with the lack of vision and consistency.
Leading through communication
I remember playing a game called “Telephone” when I was a kid. Participants would sit in a circle and someone would whisper a phrase to the first person and then quietly pass the phrase around the circle until it gets back to the beginning. As most of you already know, when the last person announces the statement to the group, it is often very different than the original. Although just a fun childhood game, it is a good example of how an original meaning can get lost in translation.
Back in the day when direct communication occurred between the client and appraiser, additional concerns and request for consideration could quickly and easily be resolved with a short telephone conversation. Unfortunately, this communication didn’t always comply with appraisal independence standards. As a result, these same concerns are now filtered through a third-party. However, as demonstrated above, anytime a layer is added to the communication chain an opportunity is created for the original meaning to get lost in translation. In these situations, it is very important for an AMC to effectively manage and lead the communication between the lender and appraiser. To be compliant, they need to ensure the meaning of the concern is effectively communicated in a way that maintains appraiser independence.
Be a problem solver, not a problem maker
A problem is oftentimes the result of different points of view. When this occurs, it is better to be a problem solver than a problem maker. This is a conversation I regularly have with my children. In general, it seems they are much better at finding problems than they are providing solutions. In simplest terms, don’t go looking for problems. However, if one is uncovered, don’t dwell on the situation, but instead, get started on finding a solution.
Some circumstances require leading through mediation that might include sympathizing with both parties perspective and finding common ground for a solution. Sometimes a little understanding from a different point of view is all it takes.
Other situations might call for a gentle education approach. This an informative method that carefully and respectively points out the errors in ones thoughts and opinions. If done properly, it isn’t uncommon for a person to discover his or her own acceptable solution.
Lead with integrity and character
The best leaders lead with integrity and character. This means you should never ask anyone to do anything you wouldn’t do or haven’t already done yourself.
Many years ago, I had a client who asked me to do him a big favor and bend the rules just a little to make things easier in closing a transaction. While doing this, one thing would have been beneficial for him in this situation, doing so would also compromise my character and integrity in his mind. In essence, if I act less than truthful in this instance, how does he know that I’m not willing to do the same in my dealings with him in the future?
Don’t take people for granted
I once read a story about the former Speaker of the House Tip O’Neill. One Election Day, an elderly neighbor came to him after leaving the polls and said, "Tip, I voted for you today even though you didn't ask me.” This surprised O'Neill. He said, "Mrs. O'Brian, I've known you all my life. I took your garbage out for you, I mowed your lawn, and I shoveled snow for you. I didn't think I had to ask." She answered him in a motherly tone: "Tip, it's always nice to be asked."
At the end of the day, a good leader never takes anyone for granted. Everybody needs to be heard and everyone should be treated like they are important.
Leading from the middle
As an AMC, we apply all these leadership lessons, so that even though our role is between our clients and vendors, we ensure that all parties reach their goal. It’s not easy being a leader in the middle, but if we continue to do our role, the end result will continue to be quality valuations that exceed our client’s lending and compliance requirements.
Bill Waltenbaugh, chief appraiser at Axis Appraisal Management Solutions, has 25-plus years of experience in the real estate industry and holds the SRA designation with the Appraisal Institute. With several years of experience as a chief appraiser and director of compliance, Bill has developed a proven track record of implementing necessary policy and procedures to ensure quality and compliance.
This article originally appeared in the April 2015 print edition of National Mortgage Professional Magazine.
