Our advisor David Girling recently published an article in Mortgage Technology and we are providing the text here.

“When I was a teenager and I was driving with my father one afternoon, I got annoyed and finally said, “Dad, can’t you go faster than 55 MPH so that everyone else isn’t passing us?” My father, who was an officer and pilot in the U.S. Air Force and who routinely flew at the speed of sound turned to me and said matter-of-factly, “No son.” I asked why and he said, “Because I’m driving at the speed limit and that’s the law.”

On another occasion, I asked my father about the word integrity. He told me that integrity is something that you start to build early on in life, it takes a lifetime to build and integrity is difficult to re-establish once it is compromised. Throughout my life I’ve respected my father for his adherence to a strict moral and ethical code of conduct, and I have tried to live by his examples. Over time I’ve learned from him that integrity is doing the right thing even if nobody is watching.

So what has happened to integrity in our society today, especially throughout the ranks of our business leaders? I am appalled at the behavior of many senior level executives and disappointed that few have exhibited the moral fiber to do what is right rather than what benefits them financially. I have witnessed numerous instances of low professional integrity over the past few years where countless executives have made decisions that are not only unsound, but that benefit them financially at the cost of countless others. It seems that the Greatest Generation has been replaced by a greedy and unscrupulous one.

As a result, our country is now suffering through difficult economic times. Real estate values have plummeted and the credit markets are crippled. It seems everyone wants to blame it on subprime originators. However there are many participants that need to share in the blame. The ratings agencies contributed to the problem when they did not properly assess the risk of the securities they were rating. Originators relaxed lending standards to a point that as we know today were absurd are also responsible. And finally there were some appraisers and appraisal companies which seemed to “rubber stamp” values for lenders, a practice which also contributed to the housing crisis we have today.

All of those that participated in the excesses of the past few years are currently going through the tedious process of rebuilding their professional integrity. And there is much rebuilding that needs to takes place. With respect to the appraisal industry, I recently co-founded a valuation services company with other appraisal veterans called Quality Valuation Services, in an effort to promote greater integrity within the appraisal community. I have observed that most appraisers are hard-working and morally sound professionals. However, all appraisers have been tainted by those few appraisers that compromised their integrity by not adhering to accepted appraisal standards.

The recently introduced Home Valuation Code of Conduct, while an attempt to address some of the causes of the financial meltdown and to re-introduce integrity into the process, has also made an appraiser’s job even more challenging. The HVCC correctly advocates for greater independence, but it is having effects on the appraisal community that were unanticipated. QVS is well positioned to assist the appraisal community during these difficult times and to assist in the rebuilding process.

So how do we re-establish a higher moral and ethical code of conduct, and a greater level of integrity throughout all business segments? Ethical leaders that are “fed up” with the way business is currently conducted need to step forward. They can help fill the moral void that now exists within not only the appraisal industry but in all industry sectors. And the appraisal community needs to focus on delivering quality appraisals, by adhering to HVCC and by maintaining the highest level of integrity in the way appraisals are conducted. If all of us adhere to strict moral principles we will regain the professional integrity that has been diminished in past years.

At QVS we are trying to make a difference by actively participating in the solution. With integrity comes a responsibility to lead by example in our community. Integrity requires accountability and accountability requires active participation in the solution. As a result, QVS will donate a portion of the fees received from every appraisal that flows through our technology platform to a variety of charities, which include the following: Habitat for Humanity, Fisher House and National Coalition for Homeless Veterans.

I invite all valuation management companies and other industry leaders to join us by either donating to our charities or by giving to others that are in need, especially those that have been impacted by the current economic downturn. In isolation our efforts are small, but together we can take huge strides and make a difference. By helping those in need we can set good examples for others who are navigating their moral compass. Together we can make a difference, not just by automating, but by giving back, too.”

David Girling is an advisor to No World Borders, and the CEO for Quality Valuation Services. Founded in 2008, QVS is a provider of nationwide real estate valuation services for the financial services industry. The company provides appraisal management services for the residential mortgage industry. Prior to QVS, he was the President and CEO of LogicEase Solutions (ComplianceEase), a provider of compliance and risk management solutions for the financial services industry.

Share on Facebook

EXtensible Business Reporting Language (XBRL)

As global accounting standards have started to converge, businesses are increasingly being required to understand and adopt XBRL as an enabling technology in enterprise wide disclosure initiatives being mandated by global financial governing bodies, such as the SEC’s Final Rule in the US and HMRC in the UK.

Executing any company IT strategy requires knowledge, foresight and careful planning and XBRL is no exception. Companies that have completed XBRL implementation and filed successfully know that it involves the transformation of the reporting processes — migrating reporting processes designed with presentation-centered, “paper-based” objectives to one which ignores form and is entirely electronic and data-centric.

So how does a company begin the time-intensive task of preparing to file in XBRL, which starts well before the filing event and continues thereafter?  The first step is to be aware of the challenges and issues:

• Educate your financial team about XBRL

• Avoid rework and risk by planning your implementation approach

o Process impacts should be considered. Be aware that upstream of XBRL there will be organizational processes change.

o Assemble cross-functional teams across the technology, accounting and finance

o Be aware that the time cost, and manual steps to produce XBRL statements often exceeds what regulators and preparers anticipated

o Do not underestimate data architecture including “meta data” to enable XBRL and the maintenance to keep the XBRL reporting machine humming

o XBRL isn’t readable by humans. Be aware that there are different approaches to making the data readable and enabling visualization.

• Allow time to map data to tags, or “taxonomies” to enable useful reporting

• Allow time for an internal walk through, to test the accuracy and completeness of the data in XBRL

• Build change into your plan. Tags built today will need to be edited and extended tomorrow as rules changes and your understanding of the data changes.

• File voluntarily to get XBRL right

• Caveats – current regulatory rules do not require independent auditor assurance on XBRL submissions

Related posts

1. A need for financial transparency

Share on Facebook