Nonexistent Shortage of Appraisers
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…there is a shortage of appraisers willing to work for sub-par fees and unrealistic turn around times…
The American Guild of Appraisers has already heard from many of our North Dakota and nearby states members on the above request.
The most recurrent complaint is that there is no numerical shortage of appraisers in North Dakota (approximately 300+-) as well as adjacent states appraisers that regularly cross over to serve client needs there (another 30 to 40+-).
What I am told is that there is a shortage of appraisers willing to work for sub-par fees and unrealistic turn around times! There is also an increasing number of appraisers that are unwilling to continue to put up with the abuses heaped on them by slow paying, unprofessionally managed and staffed appraisal management companies or banks with poorly trained appraiser liaison staff.
As we see ever increasing frivolous complaints against appraisers by nonclient third parties with no right to reliance on appraisals (such as agents or sellers) there are fewer appraisers available that are willing to continue to expose themselves to these risks. State regulators focus appears to be on fining appraisers, rather than assuring appraiser independence.
The same appears to hold true with federal regulators that ‘talk a good game’ about the necessity for truly independently developed appraiser opinions, and then do nothing to curb the pressure to hit numbers that is now far worse than it ever was in the pre HVCC environment that caused the explosive proliferation of AMCs in America today.
I specifically cite Wells Fargo and their ‘habit’ of finding non-substantive technical fault with appraisals that don’t hit value to justify reordering the assignments from numbers hitters that will. Then to assure a pretended compliance with regulatory ‘burdens’ they turn in the original appraiser to state boards!
Another trend is the appearance of NAR encouragement to their members to file complaints or encourage owners to file complaints on what they deem to be (unsubstantiated) ‘low appraisals’.
In just the past two weeks I’ve seen four instances from one national commercial brokerage doing this! Their name is available on request. We’ve already filed counter-complaints with (TX) TALCB and TREC. While these specific instances were in Florida; Texas, California and Colorado they could just as easily have been in North Dakota.
Mr. Park, if there are lenders in North Dakota experiencing a ‘shortage’ of professional appraisers willing to work for them, we offer the following suggestions:
- Pay reasonable fees. If they don’t know what a reasonable fee is they can check the VA pay schedule in their area; or alternately AGA’s previously published and federal agency submitted recommendations for reasonable fees. If they are unable to locate either they may call me at 1(714) 366 9404 and I will assist them in finding the desired information.
- Either arrange to pay appraisers prior to the inspection or at the door at the time of inspection. Most small business appraisers are not able to serve as uncompensated factors for large banks or AMCs that take 30, 60, 90 or even 120 days to pay their bills! AMCs and banks collect the appraiser fees before ordering. Appraisers should not have to wait to be paid.
- Allow enough time for proper completion. Complex or rural property often takes longer to complete simply because data availability is limited. The same holds true for proper market analyses.
- Do not permit unlicensed non-appraisers to dictate or direct report revisions to appraisers! Require lenders or AMCs to hire competent appraisers as reviewers outside of the AMC system that is responsible for ordering your appraisals.
- Assure North Dakota State Regulators develop a ‘reasonable cause’ screening panel before opening official state investigative complaints against appraisers. Further, assure that any subsequent investigation of appraisers is 100% USPAP SR3 and SR 4 compliant by that agency.
- I’m willing to bet the North Dakota Appraiser Association would assist them in locating appraisers willing to work for fair fees under reasonable professional conditions.
Deal with these problems, and North Dakota will have no ‘shortage’ of appraisers to serve their lending and consumer appraisal needs.
Mr. Park, we disagree with The Appraisal Foundation (TAF) about your jurisdiction in this matter. Because of the ASC special relationship with the FFIEC, we believe it is most appropriate for ASC to be involved in the decision to grant or not grant temporary waivers for appraisal requirements under FIRREA 1989.
Although founded at the direction of Congress to assure the protection and preservation of the public trust in appraisals and our very core financial system for housing finance in America, The Appraisal Foundation appears to have strayed far afield from that mandate.
Each time TAF changes USPAP for the benefit of their sponsors they diminish rather than strengthen faith in appraisal integrity and our financial system.
When TAF offers a legal opinion or political perspective such as their claim that ASC has no jurisdiction in this matter, the public must question whether there is a factual basis for the claim, or whether they are carrying out the desired policies of their sponsors and / or MISMO ‘handlers.’
Just as the Tri Star waiver was rightfully declined in Tennessee, we urge the North Dakota waiver request also be denied; and for many of the same reasons.
On behalf of our appraiser members in and out of North Dakota; and our parent unions’ 12 and a half million taxpaying, consumer members, we urge the ASC to deny all requests for appraisal waivers in the Great State of North Dakota predicated on a shortage that does not exist.
To grant waivers for the spurious claim of a nonexistent shortage would be to further erode American’s trust in both our real estate lending oversight system, and the independent professionalism expected of appraisers. Thank you for your consideration.
Michael F. Ford, for
American Guild of Appraisers