No Shortage Exists
90 9 20
Dear Mr. Park:
RE: Appraisal Waiver Request Hearing for North Dakota, July 9, 2019 Washington DC.
AGA, OPEIU #44, AFL-CIO has previously written opposing this. Now the state has put together impressive charts and graphs to (ostensibly) ‘prove’ shortages.
Their revised written request is nicely done. Despite the nice appearance and professional presentations their own data proves that no actual shortage exists & they were tasked to make it appear as if one did.
No shortage exists other than too few appraisers willing to work for drastically discounted fees that would also be willing to overlook the complexities of rural appraising in their completion time estimates. Nowhere in the ND proposal is there an assurance that in return for waivers, consumers would not be charged one dime for appraisal or appraisal related AVM fees. “Rising costs” is a deceptive claim to hide bankers desires to usurp appraisal fees for themselves. Perhaps they would call them evaluation fees to warrant charging $600 to $1,500+ for 30 second AVM analysis fees.
The truth is that appraisal fees have not kept pace with inflation. Dodd-Frank’s requirement for reasonable and customary fees is uniformly ignored throughout America, and in many instances, appraisal fees paid through price fixing arrangements between lenders (under TRID) and AMCs are lower than they were in 1986.
The state’s charts and graphs presentation are the kind that only used when miscommunicating actual facts becomes necessary by arguing ‘alternative facts’ in support of that which does not exist. Such as an appraisal shortage.
The effort brings to mind an old Arlo Guthrie song Alice’s Restaurant where the alleged miscreant was presented with numerous 8 x 10 glossy pictures depicting proof of criminal activity. Younger readers that are not ‘children of the 60’s’ may benefit from reading the entire tale.
There is a much simpler test than the state’s complex chimera collection.
Take the total population of ND and divide by the number of appraisers there. Then do the same for another more populous state.
The per capita result of California = 39,560,000 / 10,036 = 1:3,942 Vs North Dakota 760,900 / 277 = 1:2,747 indicates the ND per capita appraiser ratio is significantly superior. (online census 2018 / # of licenses counted on the ASC website with California addresses)
I mean no disrespect, but a state whose total population is only (.019) or 1.9% of a larger state cannot seriously argue that a ratio of 1 appraiser per every 2,747 people is a shortage compared to a state with fifty times that population with only 1 appraiser per 3,942 persons!
The overall national average is 1 per 4,113. BOTH California, and North Dakota have per capita appraiser ratios that are superior to the national average. IF any appraiser shortage existed, it is not with either of these two states.
The applicant state of ND ignored the ONE test or metric that could have demonstrated a shortage if one existed. Comparison to other states with much higher transaction volume, where it is known no shortage exists will yield similar results. New York, & Illinois for example.
They went to great lengths to stack the statistics deck. That alone should be viewed skeptically.
The ASC website reports 277 total licenses for appraisers reporting official addresses in North Dakota. Of that, 164 are unique North Dakota licenses or certifications. Contrary to claims that out of state appraisers are unreliably or non-economically poaching into North Dakota; the 277 total licenses with North Dakota addresses indicate there is a shortage of work available in ND alone. It is necessary for 113 ND’s 164 unique state licensed appraisers to take advantage of out of state appraisal work just to survive.
Allowing a five-year PIW waiver anywhere in ND could cause the existing over supply of appraisers to have to move out of state to find work. The result is creation of a very long lasting, state government & federal regulators-manufactured shortage.
North Dakota’s per capita numbers are higher than Tennessee’s purported localized shortage were for their declined waiver submission.
We have no shortage in California. I don’t believe there is one in New York or Illinois either. Our number of appraisers to population are fewer than ND has.
The MOST difficult of all common assignments, whether residential; 2-4 units or commercial/industrial and agricultural are those that are done in rural areas.
It is harder to accurately analyze credible rural market values, rather than easier. Undoubtedly this accounts for alleged delay claims. Competent rural appraisers regularly tell me it takes from 7-10 working days, or 7 to 14 calendar days to properly complete a complex rural residential property appraisal. The fact is that all rural property can & should be argued to be complex.
Responsible lending policies would dictate greater rather than reduced collateral verification by professionals specially trained to appraise such property in rural areas. Jonathan Miller is 100% right (http://appraisersblogs.com/north-dakota-new-waiver-request#comment-27026). This is nothing more than a ploy by commercial banking interests to use the political process to circumvent federal laws established under FIRREA; Dodd-Frank and various other regulations.
Rather than granting waivers; ND lenders should be urged to consider allowing directly supervised, licensed level trainees to perform site inspections for certified appraisers who will then consult directly with their own staff trainees and licensees to assure adequacy of any analyses. It would be most prudent to require that such trainees or lower license level appraisers sign the report as appraisers, with the certified appraiser then signing as supervisor.
The suggestions in the above paragraph would assure a degree of integrity not found in ordinary desktops or bifurcated appraisals where the inspecting party is neither an appraiser, nor a signatory to the final report. It would be especially superior to poorly defined evaluations where no meaningfully enforceable standards exist.
It’s a fact that no shortage exists in ND. On the contrary, a shortage of work appears to exist. As already noted, if a shortage of appraisers existed it would not be necessary for such significant numbers of ND appraisers to obtain out of state licenses to augment their ND appraisal work.
Allowing directly supervised lower license level appraisers to perform property inspections (a traditional appraisal teaching method) will facilitate upward mobility for appraisers, as well as increase overall report quality. It could result in shorter turn times, though the very nature of the work dictates more, rather than less time is prudent.
Monitored / supervised reviewed; discussed and even debated reports among office peers (or mentor to mentored) are consistently superior to those prepared by individual appraisers. It also teaches novice appraisers how to stand up for their work in the face of adversarial questioning.
The American Guild of Real Estate Appraisers of OPEIU #44, AFL-CIO respectfully urge the ASC to deny the North Dakota Governor and Banking lobby’s request to undermine consumer and taxpayer protections afforded by properly required and completed real estate appraisals.
Respectfully submitted in solidarity with our North Dakota Appraiser Guild Members; and American consumers and taxpayers.
Linda Jun, Americans for Financial Reform
Mark Skapinetz, Interim President, AGA
Jan Bellas, C.O.O., AGA
Various media publications