ND Banks Seeking to Kill Consumer Protection
…North Dakota bankers seeking to eliminate consumer protection benefits associated with appraisals…
The real issue of concern to all appraisers is the attempted con job and subtle coercion by officials and State Senators in North Dakota over the ASC.
In their letter to ASC regarding their appraisal waiver request, they cite only 170 ‘in area’ appraisers while excluding a hundred so-called out of the area (multiple state licenses).
While North Dakota is about the 19th largest state in land area, it is the fourth lowest in overall population. The 2018 population was only 760,077! That makes it among the lowest population density areas in the nation.
The in-state appraiser to population ratio is approximately 1:4400. The per capita ratio of appraisers nationally is only 1:4182. Considering differences in population density North Dakota has only nominally fewer appraisers than anywhere else in the country. Add in the adjacent state’s appraisers (which is reasonable due to the special nature of farm and agricultural real estate appraisal) and that ratio increases to 1: 2484. That latter ratio is higher even than California which is only 1:3300 +/-.
The number of in-state licensed and certified appraisers in North Dakota is insignificantly fewer than the rest of the nation, based on population. Further, ND is much more rural than many parts of the country, with very large swaths of agriculture accounting for much of its land use.
I contend it is the much more difficult nature of rural real estate appraisal that accounts for higher appraisal fees than surrounding states where population densities are higher and land use is more eclectic.
North Dakota Banks choose to report only stats that favor their causes. Showing 1-4 unit fees about 20% higher than nearby states may well result from the much greater difficulty in appraising very sparsely populated real estate that includes SFRs with dozens to hundreds of acres of land in agricultural use. Agricultural land is in a special appraisal category all by itself; reliant upon knowledge of soil fertility and productivity studies.
If the expertise necessary to analyze the inherently more difficult real estate costs more, and a banker is truly surprised then perhaps they should consider alternative career paths.
Keep in mind, that ANY waiver granted to a state for residential uses also carries over to ALL uses including commercial.
North Dakota has no documented shortage of appraisers compared to the rest of America. What it really appears to have is a shortage of integrity among its bankers that are seeking to eliminate consumer protection benefits associated with appraisals.
The applicants own studies and numbers show a greatly increasing number of farm loans being made in recent years. Not SFRs. FARM appraisals appear to be where the greatest demand is. So one must ask why North Dakota banks and state regulators want FEWER rather than greater protections against losses?
Dig through the data they submitted to the ASC. The manure is scattered liberally throughout it. It doesn’t take a lot of effort to get past the smoke screen.
It appears their elected state officials care more for the bank’s ability to produce greater campaign contributions than the entire population of the state is. North Dakotans should be asking themselves exactly who their elected representatives take direction from. Voters and citizens, or banks?
I urge all appraisers to review the above data and if you concur, write to the ASC and let Mr. Park know we support the ASC’s traditional cautious approach versus the North Dakota Bankers Association and those who owe allegiance to them.
The North Dakota Appraisers Association may need the extra help in getting their voice heard.