DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/687957
» VISIT US ONLINE @ DSNEWS.COM 77 now require appraisal assignments to be completed by certified appraisers in the event a conventional loan may ultimately end up going FHA. e adverse economic impact to licensed appraisers has been significant and if not resolved in the short term, the approximately 8,000+ licensed appraisers will either have to eventually leave the industry for economic reasons or upgrade to certified appraiser credential. ere is however, a slight glitch in that scenario. As of January 1, 2015 an applicant for state appraiser certification must have a 4-year college degree. A noble objective for those aspiring to raise the status of the industry and the caliber of entrants. e reality is that those licensed appraisers who do not have a 4-year degree and failed to obtain their certification credential prior to January 1, 2015 must now obtain that 4-year degree to qualify for certified appraiser credential. e Appraisal Foundation Appraiser Qualifications Board (AQB) is currently reviewing industry recommendations for alternative paths to licensure and certification. e board is recommending an alternative path for licensed appraisers who have been completing highly credible appraisals for at least five years, are in good standing with their respective state appraisal boards and would represent a significant loss to the industry if they cease to provide appraisal services in their respective markets. Also equally important for the 8,000 to 9,000 Appraiser Trainees aspiring for a career in appraising is a reminder to all the lenders and AMCs there are no prohibitions in the Dodd-Frank Act regarding the use of appraiser trainees, which many lenders recently acknowledged as a misunderstanding of the Dodd-Frank statutory language. To help mitigate the misperception, when drafting the AMC Final Rule in 2015, the Agencies deliberately included the following comment – e Agencies continue to support the use of trainee appraisers as long as they work under the supervision of a State-Certified and or State-Licensed appraiser as long as they have met the qualifications established by the appropriate State and the AQB. ey go on to say: e final rule amends proposed §34.213(b)(2) by substituting the term "engage" for the term "use" to clarify that an appraiser may work with a trainee appraiser on an appraisal, but only the appraiser may be "engaged" by the AMC to perform appraisals. Not only are there no federal regulatory prohibitions addressing the use of trainees, but from a business perspective, appraisal firms with appraiser trainee programs are reporting undisputable data showing that supervisory appraisers working with a trainee have higher score cards for quality, fewer revision requests and faster turn times than appraisers not working with a trainee. So yes, stakeholders are in fact reporting current shortages in some markets around the country. e most recent data available is indicating a significant decline in the number of appraiser trainees working toward appraiser licensure and certification to ultimately be replacing the appraisers leaving the industry. e plight of licensed appraisers and the misconception lenders and AMCs have regarding the use of trainees is having an adverse impact on the ability of qualified professionals to provide valuation services as well as an adverse impact on potential ability of the industry to meet future market demand. COVER STORY INDUSTRY INSIGHT INDUSTRY INSIGHT DATA DOESN'T LIE… » Of the 50 states surveyed, 46 have some form of credentialing program for Appraiser Trainees. » Of the 46 states with Appraiser Trainee programs, 34 responded to the survey request. » 20 states reported they are experiencing declines in the number of credentialed trainees. » 4 states reported they are experiencing an increase in the number of credentialed trainees. » 8 states indicated they maintain no appraiser trainee trending data. » 1 state reported a 26% swing in the rise and decline resulting in the same number of credentialed trainees between 2010 and 2015 » 1 state is still gathering the information. Below is the list of states reporting declining numbers of initial appraiser trainee applications, trainee credentials, or renewal applications, the Time Period of the survey, the Trend Results, and the rate of decline over that specified time period. State Time Period Trend Results Rate of Decline Alaska 2005-2015 14 / 1 -93% California 2011-2015 450 / 294 -35% Connecticut 2006-2016 588 / 112 -81% Florida 2011-2015 903 / 486 -46% Illinois 2005-2015 1231 / 55 -95% Kansas 2010-2013 25 / 11 -56% Kentucky 2013-20165 222 / 188 -15% Louisiana 2009-2015 487 / 169 -65% Maine 2008-2016 59 / 25 -58% Minnesota 2011-2015 389 / 231 -40% New Mexico 2012-2015 6-Oct -40% North Carolina 2010-2016 469 / 346 -26% North Dakota 2012-2016 46 / 35 -24% Ohio 2011-2016 279 / 266 -5% Oklahoma 2010-2015 136 / 82 -39% Oregon 2011-2015 69 / 68 -1% Pennsylvania 2010-2015 72 / 52 -28% South Carolina 2008-2015 600 / 150 -75% Utah 2008-2016 592 / 72 -77% Washington State 2010-2016 435 / 188 -57%