Sunday, 11 April 2021 | The Latest Buzz for the Appraisal Industry

Comment Letter to the AQB

On Friday October 16th our own Joan Trice spoke in front of the Appraisers Qualification Board in Washington, D.C. This is the comment letter she presented on the topic of the next generation of appraisers (or lack thereof) and how the current standards for entering the appraisal industry should be reviewed.

TO: Wayne Miller, Chair
Appraiser Qualifications Board

RE: Comments to Alternative Track to the Experience Requirements
in the Real Property Appraiser Qualification Criteria

DATE: October 16, 2015

FROM: Joan N. Trice, CEO
Allterra Group, LLC

As everyone is already aware this issue is a complex one. I speak with lenders, Appraisal Management Companies (AMCs, regulators as well as appraisers on a frequent basis. Appraisal quality (or a lack thereof) is a growing concern especially in the shadow of the largest housing finance crisis in our history. Appraisers, in part, played a role in that crisis.

While no doubt the intentions of the Appraisal Qualifications Board (AQB) were to tighten standards with the effect of elevating the quality of the work product, there appears to be no evidence that that has actually occurred. In fact, it would appear that a new set of problems has resulted. The Collateral Risk Network (CRN) produces two surveys each year- one of chief appraisers within the lending community and a second one of chief appraisers from AMCs. Both stakeholders report that Appraisal Quality is the single biggest concern they have.

How can we discuss the next generation without a discussion of this generation? Who would step up and mentor this next generation? Is there a shortage of appraisers or just a shortage of well-trained appraisers? What impact does the lack of enforcement of C&R have on the current population and the future generation of appraisers? Do we have the right educational offerings available? What role should the appraiser play in the future of housing finance? We all have more questions than answers. The only thing clear is that we are all operating on a dearth of information.

STATE OF THE PROFESSION

Many report a shortage of appraisers. Some in the appraisal community believe there to be an oversupply. It has been suggested by others that the only shortage is of appraisers who will accept low fee orders. Attached is a chart detailing the top 30 SMSAs, the appraiser population per Appraisal Subcommittee (ASC) in those SMSAs, and the general population. The areas of NY, CO and TX are where AMCs and lenders report a shortage (meaning extended turn-times). According to this chart Colorado appears to have an oversupply; the Texas markets are in balance and only New York appears to indicate a shortage. It would not be prudent to expand the population to serve a bubble.

top 30 Markets copy

The population of appraisers today is indeed growing old. Statistics from Clearbox, a database of appraiser credentials, indicate an average age of 54, which is likely skewed to a somewhat younger population as older ones are less inclined to use technology. There is no financial incentive for an appraisal firm or a single appraiser to retain a trainee. There is no incentive for a college graduate to enter the profession.

The simple truths are that:

  • Standards are too high
  • Earnings too low
  • Future is uncertain
  • Current population may not be equipped to train the future generation

SOLUTIONS

Support the enforcement of Customary & Reasonable fees
While not a panacea the enforcement of C&R would cure a lot of what ails the appraisal industry. Many of the problems find their source as an economic one. If economic opportunities existed, the trainee situation would be resolved. If the payment of a fair fee to the appraiser was occurring in the marketplace the only remaining barrier to entry is of course the AQB experience requirements. It simply takes too long to produce a new appraiser.

Study the demographics of the appraiser population
We know very little about the population of appraisers. Having national numbers does nothing to address what is happening in each local market.

Examine the role of the appraiser
There are a lot of conflicting demands on appraisers. Some are demanding more analysis while the current URAR form does not support any technical solutions. This is a recipe for disaster. Clients are demanding more data, photos, and analysis while simultaneously increasing pressure for faster delivery and at compressed fees.

This is simply not working. We are encouraging the brightest and the best to exit the profession.

If the conclusion at the end of the study is that appraisers’ role is to simply measure, take photos and verify data, a college degree should not be a requirement. It is quite possible that there is a role for licensed appraisers to complete the field work while a certification denotes an analyst role requiring a college degree.

Eliminate trainee and mentoring requirements
AQB should consider supporting the elimination of the trainee license altogether. It is reasonable to assume that most recent graduates are unwilling to invest 3+ years as an intern before appraising becomes a viable career opportunity. Once one completes the course work they should be allowed to sit for the exam and be admitted.

The goal of elevating appraisal to a profession and not a trade is an admirable one. But the mission of the TAF is one of public trust.

Let the clients dictate the standards by which they will engage an appraiser. As with other professions typically someone just entering business practice needs to affiliate with an experienced professional.

Establish peer review
One thing to consider is to replace the experience requirements with peer reviews. This is the process in Germany. Appraisers there are regularly audited. If their work is found deficient they are instructed to take classes and work with a mentor. This process ensures that new entrants, as well as all license holders, remain abreast of modern standards.

Better education
The current AQB Continuing Education matrix needs to be modernized. It restricts those outside the profession from instructing. A risk analyst or actuary would not qualify to teach a course in real estate mathematics or a Fannie Mae employee, not a currently licensed appraiser, could not instruct a course on the evolution of the valuation in housing finance.

Standards are a good thing but the AQB should not restrict the opportunity to develop fresh new courses. Many appraisers who have been in the field for years commonly complain of repeating the same class over and over again.

The Course Approval Program (CAP) is a voluntary program. Only approximately half the states participate. The current process for course approval is a burdensome one and one that encourages low quality on site courses where standards are not monitored regularly and fairly. AQB should assist with standardizing the educational standards and provide incentives for the states to participate.

I invite the Appraisal Foundation (TAF) to consider exiting the education business they recently entered with the Alliance for Valuation Education (AVE). Having TAF compete with education providers and trade associations removes the competitive market forces from investing in new material. This is the exact opposite of what should be achieved to reinforce the public trust.

SUMMARY

The state of the profession is one in crisis. The public trust has been diminished greatly. It is difficult to find a stakeholder who holds the appraisal profession in high regard. I propose that this study and discussion needs to go much deeper than simply the examination of experience requirements. That issue only scratches the surface of a population at risk.

Appraisers play a pivotal role in the housing sector and in commercial finance. It is imperative that we find a solution sooner rather than later.

Have any comments or would you like to submit content of your own? Email comments@appraisalbuzz.com

Responses

  1. 1. Certified Appraisers need an Associate Degree to be qualified in the fundamentals of education, not a Bachelors.
    2. The lenders need to be responsible for the AMC fees, not the appraiser..

      1. Uh Mr Brutal retort dude, You were reading my opinion of what should be changed due to the over-kill standards the author was.addressing.

        “The simple truths are that:Standards are too high”
        An AA degree and advanced appraisal classes, IMO, are sufficient.
        A Bachelors could take some 5 to 6 years to complete if they have to also work.

      2. I have to tell you… a wall full of degrees will not make you a better
        Appraiser. They only thing that makes a better Appraiser is
        experience… just like in any profession. I use the example of a
        Engineering graduate from any engineering school. Give the new graduate
        the task of producing the Structural design on a high-rise building and
        they will look at you with a blank look on their face. They have no idea
        of what to do next even after five years of college training. They are
        only able to pass the state exam which states they are Engineers in
        Training, EIT, and they have to train for five years under a Licensed
        Engineer before taking and passing the state exam to be able to design
        and place their seal on the Structural Drawings.

        I operated my Appraisal Service for almost thirty years before becoming
        Certified and I only took additional courses and passed another exam
        before becoming Certified getting under the wire before a four year
        degree in anything so I could continue to produce an Appraisal for a
        Government backed mortgage the same as I had for the over twenty
        thousand Appraisals before.

        Experience is the key in any field of endeavor. One can study about sex till
        they’re blue in the face but will know little about sex until they
        experience it.

        Jerry Morgan
        Morgan Appraisal Service
        since 1983

  2. I know some very good appraiser that do not have a college degree but also know some that have advanced degrees that cannot find the value if it was written out for them. I have been a college professor for 20 plus years and an appraiser for over 40 years. I have seen out profession go down the tubes with regulations. WE need new blood in the profession and the way that were are proceeding is not cutting it.

  3. You have many lic appraisers who should be grandfather in the certified appraisers we are to old to get a degree but know more than most, I can see that in any reviews I done.

  4. This all sounds great but I think it’s a day late and a dollar short. Don’t forget, the banks have the money, the power, and they dictate to government. Not the other way around. This means it is in their best interest to do away with the expense of an Appraiser altogether and get to a place where they can charge the borrower an exorbitant fee for an AVM in order to make money. A more sophisticated AVM that we as Appraisers have been building through the us of UAD. So what if 5% of mortgages go bad. There’s still a fortune to be made on the other 95%. It’s just the cost of doing business.

  5. Joan,
    While there is much here that I could argue with, let me say congratulations on getting your members, the bulk of which I’m told are lenders, chief appraisers and AMCs, to support any comment from you that better pay for appraisers is at the root of the problems you cite.
    Maybe, if that is truly what they think, things will change for the better as soon as they implement their effort to pay more for professional services as opposed to the commodities they now order.
    We’ll see. So far no cigar and TAF can’t do it, your members can.

  6. I do have one point that often bothers me. Whenever I hear about how appraisers had some of the blame for the housing crisis I think that is kind of BS. Yes, poor quality and overvalued appraisals were used to “overfund” home loans and that was a bad thing. BUT, if we think about the root of anything, it is desire. Desire makes you walk through fire for a loved one and wake up early every day for work to make money to pay bills, buy a new car, etc. My point is that appraisers are the ONLY party to a real estate transaction or refinance that have no REAL desire for the deal to close or the loan to value ratio to be at 80%, etc. We are paid a flat rate to value a property, no matter what it is worth. That $$$ motivation (desire) is what drives the real estate agents, loan officers, banks, home owners, buyers, etc. to push, influence, beg, or sometimes threaten or try to blackball appraisers to make them push values. No appraiser ever said to him/her self ” I am getting paid anyway, but why don’t I work extra hard to make the value high and hope I don’t get caught”. Lets keep the blame for the money grab where it belongs. With the people who made all the money selling houses for more and more every month or pushing deals and qualifying sub-prime borrowers into loans they could not really afford. They got the money and we appraisers got the increased scrutiny, lack of trust and now have to work twice as hard providing 5 -8 comps with photos of everything including where the dog poops in the yard. We now have become quasi-home inspectors for FHA …… oh wait, we don’t “inspect” anymore, just “observe and report”, kind of like the duffus security guard in those funny movies. We are the no gun security guard at the mall of American home finance. We make a little over minimum wage to observe and report; then get berated when they don’t like the value we report.

  7. There is no longer a free market for finance appraisals. Dodd Frank and HVCC were utterly misguided in attempting to separate the client from the appraiser. Appraisers can no longer negotiate fees with the end user, and all the incentive on the AMC is to squeeze the appraiser on turn times and fees, all while supplemental standards and underwriters are ratcheting up the scope of work. these are not “unintended consequences” This is the Lenders slowly wringing our necks in order to save themselves from the consequences of the gigantic mess they themselves are responsible for. The lenders themselves are overtly undermining the industry with their ridiculous UAD standard, dreaming of the day that they can write us out of the process altogether. I have long been an advocate for appraisers taking the power into their own hands by unionizing. This is the only way to address the power imbalance. The Lenders will never relinquish the power they now have willingly, AMC’s must be abolished and their function taken over by Union Locals in each jurisdiction. Uniform standards must be negotiated so that the scope of work required is adequately compensated. There is no other way forward. Regulations have painted us into a corner from which there is no other way out. There either has to be deregulation and a return to a truly free market, with REAL appraiser independence, or the Appraisers must band together to protect the profession and negotiate from a position of power. We must demand collective bargaining rights and binding arbitration. We must take matters into our own hands. Haven’t we been humiliated enough yet? Haven’t enough of you been dragged through the mud long enough to have your ideological blinders knocked off? There IS NO FREE MARKET for appraising. Wake up and smell what you have been shoveling all these years! The power is there for us to take. All we have to do is band together and take it back.

    1. I would argue that it wasn’t Dodd-Frank that was misguided. It was the control of mortgage industry lobbyists over legislators that watered down regulations which may have been effective in strengthening the appraisal profession but wound up benefiting the mortgage industry at the expense of appraisers. The mortgage industry wants control over appraisers and the appraisal process. They don’t want independent professionals determining what the value of a property is.

  8. Ms. Trice, Although your words are both inspiring and true, the words do not ring loud and clear. I say this because almost everyone knows the problems you have elaborated on, Yet the powers to be simple ignore because the lenders have their ear. They have their ear because of the all mighty buck. That’s right, more ever so fair money for the appraisers means less to the lenders because at some point the lenders who are at the top of the food chain are going to have to pony up!! Appraisers deserve higher appraisal fees. We have not had a cost of living raise in over 15 years. But yet the demand is four times greater and the turn time demand even worse. Strong direct and precise words coupled with appraisal industry demands is what we need. This may sound abrupt, but look at the demands made by the National Association of Realtors when things were not the way they wanted.

    1. Pay raise? The standard URAR fee in 1986 was $300 in California. Limited operating costs… microfiche, word processor, tape measure, camera…. Needless to say the costs of doing business today are many… computer, license, CEU’s, E&O, MLS, software… etc … The standard AMC URAR fee… $250 to $275 …. CRAZY!!!! I am still looking for that “pay raise.”

  9. One small contradiction, appraisers played a very miniscule part in the housing crisis. Less than 1% of all mortgage fraud cases and or failed mortgages were as a result of deliberate appraisal mistakes and over valuations. There were 5 times as many bad credit decisions to blame. I know, I saw it first hand. So lets take a closers look at this. Ok, you start the transaction of a sale. A homeowners calls a real agent. The real agent may or may not pull comps, they see similar homes selling for around $100k, the owners won’t take less than 95k clear. So what happens next. The real agent suggest that they list the home for $115k. Why you ask?? Well the agents have to get their 6%, and they will not normally get the listing if they insist on listing at $100K the owners aren’t going to want still pay 5 to 6% of that. Because there is also closing cost, and let’s not forget the loan officer, he/she wants their cut 1 to 3%. So the appraiser comes in to do the appraisal and already everyone from the agent, to the AMC has said something about this home being easy to bring in at $115k, what about the seller concessions? So my point is there are a lot of places that should be looked at for the crisis before the lonely appraiser, who by the way is the only un-biased person in the transaction!!! and lucky to be making $350 for his/her troubles.

  10. It’s the same old story. What’s worst is now we have amc’s who hire appraisers based on lowest fee and quickest turn time. Quality is not even considered. If an appraiser cuts one appraisal they are done with that amc, just like the mortgage brokers of days past.
    Shortage of appraisers, yes. The ones who did appraisals for $225 are out of the business. The one’s who have survived have increased their fees, doing specialty work and direct work for banks, who will pay a good fee for quality work.
    The real down fall came with state license and all appraisers being equal. LOL. Originally you had a designated appraiser who hired several appraisers and signed all reports. The staft appraisers were paid a percentage of the fees. The designated appraiser was hired by the lenders because of his reputation and business experience. The “lenders” were responsible that they have hired a good appraiser and the appraisal was a quality product representing market value.
    Back in the day, the designated appraiser always hired young quality people, many times a son or daughter entered the business. Today, I don’t want my son in this business.

  11. I don’t agree with the loss of a trainee license which you suggested. The only way for an appraiser to get better is with experience. What they need to change is where most AMC’s will say no trainees allowed. They should make a law stating that trainees can sign all appraisals unless the person has to be Certified (like a million plus home, etc). Also, I strongly disagree with your thought about everyone being audited from time to time. That would seal the deal for many good appraisers leaving the profession. You simply (Joan) do not and never have had the best interest for appraisers.

  12. So far the solutions to producing better appraisals has focused on Big Education, getting your Bachelors, and Big Appraisal Education, requiring more qualifying education. You have given no credence to practical knowledge which counts far more than the others combined! Your suggestion of eliminating the mentor requirement is misinformed and appears self-serving. Anyone that has ever had trainees knows that it takes several years before they are competent to go out on their own. No amount of classroom knowledge is going to prepare them for the different challenges that appraisers are faced with every day. The main issues that led to the glut of poorly trained unprofessional appraisers during the boom was the fact that there was no limit on the amount of trainees that a certified appraiser could supervise, that the trainee period was ONLY two years, and that there was no enforcement of trainees soliciting their own work. The result was you were having trainee appraisers being solicited during their qualification classes by unscrupulous certified appraisers who would happily sign off on their work with minimal supervision. This very low standard of becoming an appraiser, when combined with the very low standard of becoming a loan officer (three day class) resulted in many low quality appraisers teaming with low quality loan officers to produce bad loans. The “solution” was not to fix the problem but to punish every honest appraiser who had built a lifetime business by spending years and countless hours properly teaching appraising to their employees. By cutting off the business owner from legitimate, professional relationships, HVCC and Dodd-Frank essentially stole the intellectual property (the trained employee appraiser) from these business owners. The only way to get more quality appraisers is to restore the incentives for the professional appraiser to train them. Trainee appraisers do not need Bachelor’s degrees, they simply need to be able to write and reason, and they don’t need hundreds of hours of classroom study. What they do need is years of experience. As any experienced supervisor will tell you, the first two years of training is a drain on the business, it is only in the third and fourth year that a business owner finally starts to recoup his investment. If you want more appraisers you must simply make it a worthwhile investment for the business owner. This requires the ability of the business owner to command fees that would reasonably compensate him for his risk, as many trainee appraisers will simply wash out after a few months, thereby wasting the owner’s efforts completely. Trainee should be required to gain at least four years of experience but the education requirements should be greatly reduced. This would eliminate much of the upfront cost to the trainee while giving the supervising appraiser a small but reasonable incentive to train someone new. Limit the number of trainees for one supervisor to at most four. (I can’t imagine how one could properly review and teach more than four trainees at one time.) Restore the ability of the business owner to more easily affect his sources of revenue. Some AMC’s do provide a service, but this is a service to the lending industry and should be paid by the lenders if they choose. I have stuck with this industry for the sole reason that I knew that the HVCC model would fail in exactly the manner that it has, thereby resulting in a supply/demand imbalance that would finally favor the professional appraiser. Your suggestion of eliminating the only true source of knowledge in the industry is misguided and will put the final nail in the coffin of a once proud profession.

    1. I agree. A bachelors degree does not qualify you to become an appraiser. It is the day to day, in the field appraising experience, with a licensed appraiser mentoring you, that makes you qualified to become a good appraiser. There is no incentive for an appraiser to train someone for 2 years that can easily become their competition by signing up with as many AMC’s as they want. Which is why there have been no trainee’s entering the business for a long time, in addition to the Bachelor’s degree requirement.

  13. Sorry. I don’t buy it. Easing standards for new entries to the appraisal field simply to put more bodies in the profession is not an option. It sounds more like a plan developed by the mortgage industry to continue policies that view appraisers and appraisals as commodities.

    The simple fact is that poor appraisal quality is the result of standards that the mortgage industry has put into place…. not the standards developed by the appraisal profession. If more deference was given to the profession regarding how a strong, well supported opinion of value is developed and reported, we would not have the quality issues that continue to dog the appraisal industry.

    To this day the mortgage industry still dictates how appraisals are completed and which appraisers get the work. And they do not seek out quality first. The mortgage industry views all appraisals and appraisers as commodities that serve a single purpose; to provide a required document that gets their deals through the system. If they could bypass the appraiser all together they would because LOs work on commission, mortgage brokers rely on sucessful LOs, and appraisals that have potential to kill their deals are a problem. When regulators worked to strengthen safeguards in the industry after the last crash, the mortgage industry fought hard to water them down and they were sucessful. The appraisal profession did not fight for AMCs, scope creep, unreasonable turn times, and ridiculously low fees. This is the work of the mortgage industry lobbyists who do not want to cede control of appraisals, appraisers, and costs impact their bottom line.

    Look, other professions do not have problems attracting talented college grads. Accounts, architects, engineers, financial planners, and the financial industry in general can attract a sufficient number of candidates because their professions offer good paying positions and prestige. Unfortunately, the same cannot be said for the appraisal industry. Appraisers themselves discourage potential new entries because of the low pay and lack of respect given to ethical hard-working appraisers. If pay scales were competitive with other professions and if the mortgage industry’s stranglehold on pathetically poor standards and working conditions were to be eliminated, there would be no shortage of high quality, ethical, AND well educated appraisers.

  14. As in appraising, we should be careful in taking our information from one source and
    must keep in mind what the goal is of the person speaking. You say Joan the
    issue is complex, but it’s really not. Appraisers are being asked to do more,
    for less money, with higher liability at faster times. Here’s a solution, (1) all
    lenders should be mandated to only require what is taught to the appraiser
    (USPAP compliant report). Why have federal forms when some clients increase the
    scope of work by 15 pages? (2) With split fees equivalent to salaries from 15
    years ago the fee needs to be doubled (separated from AMC’s). (3) The liability
    to provide an OPINION of value is too high as the owner, borrower, listing
    agent, buyer’s agent, the LO, underwriter, AMC, and the CU platform all are
    after the appraiser. (4) Delivery time to the client will vary depending on
    locations, but let the expert determine to the lender when they can get the
    work done. Why send me an order due in 7 days, but if I see it in one day its then
    magically due in 24 to 48 hours.

    Joan to say “the
    appraiser played a role in that crisis” is stretching the truth. If appraising
    is like a game of baseball it has been the lenders and regulators who have long
    been setting the rules and umping the game. The appraiser may have pitched to
    one batter in the 7th inning, but to say we played a role in not
    true as it relates to no documentation loans, artificial low rates, unqualified
    borrowers, etc.

    What good is a survey when you interview chief appraisers who work for the banks and the chief appraisers who work for the banks by way of an AMC. The goal of both
    interviewed parties do not jive to the field appraiser.

    Garbage in,
    is garbage out when it comes to this article.

    1. And lets not forget how we got here. It was a AMC’s relationship with a lender and failed oversight of that AMC on their appraiser panel members or their clients. This was the problem. The solution apparently was to go with what was exactly the problem in the first place.

  15. Before any licensing of this profession, experience and competence were required to get any assignments. There were only a handful of mortgage brokers handling FHA/VA, that required being on an approved list. The appraiser wielded an authority that was final, regardless of all the complaining and crying that ensued.
    This authority was abused at times too.
    Appraisal is an art, not a science.

    Uad, form reports, adjustments, etc. . .are subjective.
    I’ve trained some very good appraisers over the years. Never treated it as a science, but as an ethical interpretation of the market. When prices started skyrocketing and sale prices were coming in 30-40k over the asking price, does that mean the property wasn’t worth it? How do you appraise that one?
    Some brokers are better at estimating value than any appraiser too. Experience still can’t be bought or earned in school.

  16. I think the responsible parties have not figured out what they want from the appraisal. An appraisal is a risk management tool. What risks, exactly, are we trying to manage? As Joan Trice’s letter suggests, do we need appraisers to simply measure, photograph, and verify that the collateral exists and is not tilting or next to a rendering plant? A kid or moonlighting broker with an iPad can do that. Do we want the appraisal to prove that the purchase price or LTV is not grossly out of line with market standards, either due to fraud or stupidity? An AVM can likely do that in most cases. Do we want to prevent another housing bubble? Well that’s where it gets interesting. Today’s appraisal product is simply not suited to that, being tied to a specific current date of value and not offering any defined concept of sustainable or long-run value. The regulated appraisal regime failed to prevent the housing bubble. It didn’t cause the bubble, it didn’t stop the bubble, it was basically irrelevant to the bubble. That’s why the appraisal isn’t worth much today. More pay, less pay, more education, less education: none of it will matter unless appraisers defend or construct a relevant role in housing finance that answers the investors’ only real priority – how am I going to get my lent money back?

  17. The letter was very well stated, and offered the AQB some excellent ideas. I was at The Appraisal Foundation Advisory Council meeting recently and this topic was discussed in
    great detail. The Appraisal Foundation was listening and appears to be receptive to making some necessary changes.
    Thank you for the leadership you have taken for the appraisal profession on this and other issues.

    1. we, the appraisers, do know exactly what ‘appears or listening’ mean. Yes, nothing will be changed into our advantage. I spent half days in meetings, week by week for 2 years at one local government agency; results: nothing, and they were asking us of ‘trust’ ???

  18. If we build it, It will come.. That is to say, If enough appraisers stand in one voice and say to any AMC, lender etc.. NO; I WILL NOT ACCEPT LESS THAN $450 per appraisal, cost to do business has gone up, Time for fess to go up.

  19. A couple of things: (1) government created the housing crisis with idiotic monetary policy (i.e. artificially low interest rates, which still exist) and a lack of regulation/oversight of the financial markets. (2) I can’t compete with banks, big pharma, or anyone else in the market for new college grads – the quality of employee I could hire for no benefits, low pay, and an uncertain future (will they have what it takes to be an appraiser?) could just as easily flip burgers…thereby at least getting a food discount. (3) I agree with the Texas comment the author made – I’m in Texas, and we don’t have a shortage of appraisers; we do, however, have a shortage of appraisers willing to take reduced-fee assignments that include asinine requirements, scope creep, and “revision” requests from quality control nimrods who don’t even read the appraisal. That is a lending issue, not an appraisal issue. Solution? Do like most of us in Texas do – refuse AMC assignments. (4) reliance on MLS data to construct Collateral Underwriter is simply crazy. I’ve authored several classes for real estate agents, and teach those and other classes for real estate agents. I can say with no small amount of certainty that most real estate agents don’t follow their own state’s laws and regulations with respect to (a) development of some sort of AVM (CMA or similar) and (b) accurately reporting data to MLS. Why? There is no one to enforce any of the “lesser” requirements…like ethics. We rely on MLS exclusively in Texas since we are a non-disclosure state, and MLS data is simply not accurately reported, especially regarding condition…which is a biggie with FNMA, FHA and VA. Solution? Either force the states to enforce their own laws or create yet another federal agency to do it. Until that happens, the entire housing market will continue to teeter and eventually, again, fall. Not our fault…again.

    1. FYI – The housing crisis preceded the stimulus from the FED. In fact, the housing crisis in large part precipitated the need for the stimulus program(s).

      1. Artificially low interest rates began under Bush I, continued through the Clinton years, Bush II, and Obama. They are a great benefit to a nation who spends more than they make – thus the ever-growing deficit. Market-derived interest rates that aren’t manipulated by The Fed would lead to debt payments far in excess of what the US already pays…to China.

      2. THOMAS- IT DOES NOT MATTER a few years -the tone and refractory attitude is just perpetuating. BOB- congrats. Sorry for the rest of the ‘certifieds” and UAD compla ?????? Hmmm

  20. Elimination of the trainee and mentoring requirements is the most preposterous suggestion as this would only relax the Appraiser Qualification Criteria which would have a devastating effect upon the profession…

    Real Estate Appraisal is not learned from a textbook or acquired from a College Degree rather the Appraiser learns his craft from practice, lots of practice and there is no substitute for experience…

    The apprenticeship program is the most important step in the Certification process…

    Enforcing customary and reasonable fees will provide the necessary incentive for new Appraisers to enter into the profession.

    Should you eliminate the experience qualification then you will see much more competition from a flood of less qualified Appraisers entering into the profession, much lower fees and less credible assignment results…
    Experience Criteria must not be eliminated and Reasonable Fees must be enforced!

    1. Agreed. The last thing we need is more “quality control” or AMC reviewer-level appraisers who only know what the check list says to do.

  21. Please take the time to contact the AQB and voice your opposition to this preposterous suggestion that would have nothing less than a devastating effect upon our profession.

    The mentoring requirement is one of the most important steps in the Certification process as The Appraisal Process is learned from practice and experience, lots of experience!

    To address the perceived shortage of new Appraisers, Reasonable Fees must be enforced which provides ample incentive for new Appraisers to enter the profession and take the time necessary to gain the necessary experience through mentoring and practicing the concepts learned in the required coursework.

    Elimination of the mentoring requirements will no doubt lead to an onslaught of less experienced Appraisers leading to less credible assignments, more competition and lower fees. As a Certified Appraiser with over 20 years of industry experience, I’m continuing to learn everyday as there is no substitute for experience!

    Please take the time to contact the AQB and voice your opposition to this preposterous suggestion and ask that Customary Fees are enforced.

  22. “lenders report a shortage (meaning extended turn-times). ”

    Yes, this happens when the AMC spends 3-5 days calling around for the lowest fee, then orders the appraisal. Pay the C&R fee the first day the file is created and watch these “extended turn-times” decrease.

  23. I live and work in an area which certainly has an oversupply of appraisers. Low fees are the norm here, but it is arguably due to market forces. Because of the downward fee pressure and my policy to never accept an assignment for less than a certain fee, it is difficult to obtain enough work to stay busy. I often receive requests for FHA appraisals with a fee of $225. I
    always counter at a higher fee, but the appraisal is then reassigned. I agree that enforcement of C&R would certainly help attract new individuals to the appraisal profession. Additionally, it would certainly make it easier to make a decent living. However, at least in my area, respect for the profession will not improve until the quality of appraisals improve. I perform a significant amount of review work and I am embarrassed by many of the appraisals that I see. They are often of poor quality and contain numerous grammatical errors, run-on sentences, and misspellings. This is in addition to poor appraisal practice, lack of support for adjustments, and use of inappropriate comparables. While the quality of work is discouraging, it appears to be commonplace. I’m as frustrated as the next appraiser because of the pressure I receive to lower my fees, especially knowing the appraisal quality of some of my competitors. On the other hand, would enforcement of C&R cause appraisal quality to improve? Will appraisers then take time to at least run spell check? Perhaps quality would improve over the long term, but how do we insure that the next generation of our profession is trained by good appraisers?

    1. When the mortgage industry stops seeking out garbage appraisals from incompetent and unethical appraisers, things will change. Joan’s letter appears to be more concerned with the plight of the mortgage industry than that of appraisers. The pathetic level of appraisal quality exists because this level of analysis and reporting is accepted by the end user. The end user being the mortgage industry which is only interested in a report that has all of the check boxes completed correctly and which forms a value conclusion that supports their deal. They need a piece of paper in their loan file that relieves them from liability and repurchase of the loan if something goes wrong down the road. They do not seek out quality and they do not get quality as a result.

      You don’t see attorneys, financial planners, accountants, and portfolio lenders seeking out cheap and fast appraisals sourced from AMCs because they, or their clients, have skin in the game and they rely on the services of competent, ethical, and well educated appraisers. The mortgage industry continues to control the appraisal business and appraisers for their own shallow goal of short term profits until the next mortgage crisis occurs and they can attempt to shift the blame to the garbage appraisals which they sought out. Joan’s proposals would support he status quo without considering the real source of poor quality appraisals; the mortgage industry.

  24. Although I disagree with the idea that there is a shortage of appraisers and that the
    solution is to lower the bar, when the following items take place, it’s no wonder
    the appraiser numbers are in decline. (1) With HVCC and the inability to assign
    orders internally within the office, THE ENTROPOURNAL SPIRT WAS CRUSHED as the business model was obsolete overnight. (2) When you have a product that 7 years
    ago paid $400 to $450 and took 6 hours to complete, but now pays $225 to $325
    and takes 10 hours to complete, no business is going to excel. Seven years ago
    when the rules of the game were the same from client to client (submit a USPAP
    approved product) but now vary like the wind (15 page scope of work letters),
    the industry will adversely be effected. (3) When you change from a cash
    business (collect at the door) to a now we must give 30, 60, 90 day credit to
    the lenders, many appraisers will move on. (4) When hired trainees of the past
    expected wages consistent with their high school diplomas versus what a 4 year
    degree graduates expects for their 2.5 years of training today, the number of trainees
    will decline. (5) If even after a 4 year degree and 2.5 years of training,
    lender clients can require 3, 5, 7, or 10 years of experience from receipt of
    license to complete basic assignments, the numbers will go down. (6) If you
    meet all of the requirements but are still but on a VA appraisal approval list
    for years at a time with no guarantee to ever be added to the panel, the
    industry will suffer. (7) If we are told by the lenders/AMC’s where we can work
    based on some distance matrix from our office, then appraisers will leave. (8)
    If regulators can dream up expanded appraisal requirements (New FHA guidelines)
    with apparently no input form the appraisal industry (increased guidelines
    should be higher pay), than many appraisers will close up shop. (9) If TRID
    regulations reduce the pay to the appraiser deserving complexity fees, the
    silenced voices will leave the profession. I will take suggestions for issue 10
    and beyond.

  25. Folks, the horses are long gone from the barn. So lets review, we put all this in place, make everyone jump thru hoops, now we cant find anyone to come in the the business ( which was totally predictable ), now we want to water it all down. Come on, the business model is broken, Ms. Trice was recently on a blog arguing that we need to dress professionally. Try that on an FHA assignment in the crawl space and in the attic, makes for a nice looking business casual outfit, muddy, stained and loaded with insulation fluff. The industry sold out the appraiser to regression and automation. There will be some money for a while for the old times, then they get to retirement age ( median appraiser is low 50’s as of today ) and then automation takes over for most cases. They will still steal the borrowers ” valuation fee” but thats where we are heading, you can go to Vegas, go to AI national, try to get your “designation”, but we are ruined. I made a damn good living still, but only because I am a 30 year veteran. The appraisers have NEVER won a single battle and we wont win Joan’s either. So much blather and then we call go back to the world we work in, which is really difficult when you cant really market and most busy appraisers rely on relationships that are old and long and stretch back to the “old days”. Sorry about the bluntness and would consider a debate on my comments, but this is it and wanted to water down the business to get more fools to buy Clearbox of whatever other nonsense someone is selling is just mostly sad. Ride whats left of this wave till the end, but there is NOT ENOUGH appraisers coming in to keep the profession alive. This is due to the ridiculous regulations placed on a profession that cannot do the job for the median fee offered, that simple.

  26. Folks, the horses are long gone from the barn. So lets review, we put all this in place, make everyone jump thru hoops, now we cant find anyone to come in the the business ( which was totally predictable ), now we want to water it all down. Come on, the business model is broken, Ms. Trice was recently on a blog arguing that we need to dress professionally. Try that on an FHA assignment in the crawl space and in the attic, makes for a nice looking business casual outfit, muddy, stained and loaded with insulation fluff. The industry sold out the appraiser to regression and automation. There will be some money for a while for the old times, then they get to retirement age ( median appraiser is low 50’s as of today ) and then automation takes over for most cases. They will still steal the borrowers ” valuation fee” but thats where we are heading, you can go to Vegas, go to AI national, try to get your “designation”, but we are ruined. I made a damn good living still, but only because I am a 30 year veteran. The appraisers have NEVER won a single battle and we wont win Joan’s either. So much blather and then we call go back to the world we work in, which is really difficult when you cant really market and most busy appraisers rely on relationships that are old and long and stretch back to the “old days”. Sorry about the bluntness and would consider a debate on my comments, but this is it and wanted to water down the business to get more fools to buy Clearbox of whatever other nonsense someone is selling is just mostly sad. Ride whats left of this wave till the end, but there is NOT ENOUGH appraisers coming in to keep the profession alive. This is due to the ridiculous regulations placed on a profession that cannot do the job for the median fee offered, that simple.

  27. Prior to AMC’s, appraisers had the ability to have more than a one-man shop appraisal company and the ability to earn. This also allowed the motivation to hire trainee’s. Why was their no “shortage” then? At this point, we are stuck in how far we can advance as a business. Without the ability to charge the fees needed, we can not afford to pay a staff. The appraiser can only make as much as they can type leading to 80 hour work weeks just to make ends meet. Unfortunately, the appraisers who accept low fees are usually inexperienced, new in the profession and they are the ones who will end up hurt when they get their licensed suspended for an incompetent report. And the low fee, AMC, will not be there for them. The newer appraisers used to work under experienced appraisers and received mentoring. Now all are treated at the same level. Just sign up and accept low fees and you are in. We have been kicked in the gut and treated like bottom dwellers expected to operate as data entry clerks with enormous liability and requirements. It’s like fitting a square peg into a round hole.

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