Dart Board Newsletter – April 2017
What does appraising today look like? Better yet, what does it look like to join the appraisal profession in 2017? These questions have been top of mind for us in the valuation industry for some time now, and I’d like to share some information as well as my thoughts with you on these issues in this month’s Dart Board.
Trainees. The appraisal industry has struggled to “fill the pipeline” with new appraisers in recent years. A significant barrier to entry into the profession has been completing the required 2,000 hours of trainee experience. Last month the National Association of Realtors published a survey of credentialed appraisers which found that less than one in five survey respondents take on a trainee appraiser. Respondents reported that compensation, regulation and liability are important factors inhibiting appraisers from taking on a trainee, as is “unwillingness on the part of lenders to accept the work of trainees.”
Fannie Mae recently weighed in on the use of trainees. In January 2017, the agency clarified that appraisal trainees may perform property inspections. Selling Guide Announcement SEL-2017-01 states that “We have clarified our existing policy that allows an unlicensed or uncertified appraiser, or an appraiser trainee to complete the property inspection. When the unlicensed or uncertified appraiser or appraiser trainee completes the property inspection, the supervisory appraiser is not required to also inspect the property.”
This clarification on an existing rule has prompted conversation among some of our lender clients, as well as in industry-related associations. Allowing trainees that have the required competency to complete solo inspections should have a positive impact on appraiser availability and turn time concerns and, over time, should result in more appraisers willing to take on a trainee. From the appraiser’s view, a trainee would allow them to take on more orders, since the physical inspections tend to be the most time-consuming part of standard appraisals. (Both the trainee and credentialed appraiser sign off on the report.)
Dart Appraisal would appreciate having open discussions with our clients on the use of trainees. I am open to most any compliant process change that results in better service and more timely reports for our clients, and welcome your comments or suggestions surrounding this issue.
Changing Qualifications. In March, the Appraiser Qualifications Board (AQB) of the Appraisal Foundation released the Third Exposure Draft of Proposed Changes to the Real Property Appraiser Qualifications Criteria. The AQB has been examining potential areas of change to this document since a Concept Paper was first issued in July 2015. This Third Exposure Draft is proposing modifications to:
- Practical Applications of Real Estate Appraisal
- The College Degree Requirement for Licensed Residential and Certified Residential
- Experience Requirements
Under the proposed changes, the Practical Applications of Real Estate Appraisal (PAREA) program would allow trainee applicants to receive a large majority of their required experience in a structured learning environment.
This Exposure Draft also proposes maintaining the Bachelor’s Degree requirement for the Certified Residential license. However, the Draft does include a proposal for Licensed Residential appraisers to move up to the Certified Residential classification with either 21 semester hours of college credit, passing College Level Examination Program (CLEP) exams equivalent to 21 semester credit hours, or a combination of the college semester credit hours and CLEP exams.
The Draft also proposes decreasing the amount of experience hours required for licensure. The rationale behind this proposed change is that other qualifications for licensure have dramatically increased, including the number of qualifying education hours required, the college-level education requirement, as well as successfully passing the National Uniform Licensing and Certification examination. The Draft states “With these enhancements to the education and examination components of the Criteria, the AQB believes it is appropriate to consider offering a more balanced approach to the qualifications needed for a credential by reducing the number of hours of experience required.”
To give you an idea of the appraiser population, 984 total individuals were first time test- takers of National Uniform Licensing and Certification Exams in 2016. In 2008, the number of first time test- takers was 4,768. Even if we are not seeing a shortage of appraisers today, these numbers seem to indicate that we will in the future. Clearly, we need to make the path into the profession more inviting for those considering a career as an appraiser.
The AQB is accepting written comments on the Third Exposure Draft through May 12, 2017. You can read the entire Draft and submit your comments on The Appraisal Foundation’s website.
Dart Webinars. Earlier this month we held a webinar on Appraisal Independence for Lenders. This was Dart’s most well-attended webinar to date, and we want to thank everyone that participated. Our next webinar, which is presented in partnership with The Mortgage Collaborative, will cover a host of questions we are most frequently asked from lenders. Topics we’ll discuss will include the difference between certain types of forms, appraisal transfers and conversions, UAD quality and condition ratings, and more. The webinar takes place on Thursday, May 11; you can register here.
I have enjoyed reading your comments and suggestions in response to recent issues of this newsletter. If you have any feedback to share, or if there is anything we can do to assist with your appraisal management needs, please don’t hesitate to contact me.