The Appraisal Waiver Avalanche
The State of North Dakota Along With Their Banking Lobby, Applies For a Waiver
This just came in so I will expand on this post in the future, but here is what we know.
The governor has submitted a request to the Appraisal Subcommittee for an appraisal waiver but the letter seems more orientated towards raising the de minimus which just occurred. By the way, isn’t it apparent that the banking lobby is a little to cozy with the Governor’s office to actually cosign this letter? The letter also makes references to the lack of rural appraisers as a long-term problem.
It is also clear from this letter that the FDIC hates appraisers (I have seen this for most of my career) as they facilitated the eventual writing of this request.
The key problem with this request is that the number of credentialed appraisers in North Dakota is up sharply from 2007 to 2017. Here are the numbers:
- Licensed residential is up 62%
- Certified general is up 50%.
- Certified residential is up 8200% (only because there was no such category in 2007).
Regarding the long-term narrative about a shortage of rural appraisers and removing their requirement to follow USPAP, ask yourself these questions: would the same apply to medical licenses for doctors and dentists; passing the bar exam for lawyers; licensing and training for food service inspectors when availability is thin due to the economics of rural life? Why aren’t rural appraisers allowed to participate in supply and demand like doctors and dentists, lawyers and food service inspectors? How about the fracking companies that pay $150,000 for 6 months for an employee because labor is scarce? The problem here is this waiver will promote bad behavior no matter how well the state did in the aftermath of the housing bubble.
Interestingly the licensed category in 2007 was exempt from AQB requirements and that didn’t go well for North Dakota.
Be sure to read their letter.
Here is the North Dakota waiver letter.
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Mr Miller, we all really hope you make headway pushing back against this. The careers of over 40,000 appraisers whom still complete mortgage lending assignments are at stake.
On the balance, there are plenty of working avenues for tech sector people, they don’t need to steal our workload in an effort to make a few easy dollars at the expense of consumer safety and sound valuation practice for the majority of mortgage lending product consumers in this entire country. Also raised deminimus is illogical. Only rich people deserve fairly balanced consumer protection?
Remember when Coester first came on the scene and a professional senior appraiser quizzed him on appraisal terminology live on camera, and he got most definitions and process questions wrong? Same thing needs to happen with the purveyors of hybrid technology products. Bet you a pepsi they can’t answer the simple questions about proper valuation and compliance methods. Names, dates, locations, specifics.
I’m still waiting on initial questions to hybrid solicitations; What is the consumer paying for these? Although I’ve answered dozens of solicitation requests, that specific question has never been answered in a truthful straight forward manner. Thank you for the great articles, keep them coming. Did you say working with energy companies can pay 150k for 6 months of labor!? I’m looking into this immediately. Thank you.
What is really amazing with even thinking about anyone wanting hybrid appraisals is that currently we can’t get lenders to allow us to have a trainee inspect the property and perform an appraisal with a supervisory appraiser even if the supervisor inspects the property with them. I also can’t send even a cert residential appraiser to perform the appraisal even under my supervisory license without the lender approving and changing the appraiser name on the assignment. But now they will allow a nonappraiser to go inspect the property and we are to trust and use their inspection info and perform the appraisal from our office. They are going from one extreme to the other. How many more people can we insert into a transaction? Communication or the lack of it is already a major problem and this will just make it even worse. Just let us do things the way licensing was intended. We supervise a trainer until WE know they are competent and ready to inspect on their own and then directly supervise them. Now we just trust whoever went to the property. There is no way successful experienced real estate agents will go to properties for cheap fees. That kind of work goes to the newbies who don’t even know what they are doing.
Every time there is a change in the process it has unintended consequences. And every change send to make things worse.
Maria, you’re beginning to really truly understand the lending industry better. I’ll take you that final yard line here.
If an activity is profitable to the lender, they promote it and find a way. If an activity hinders lending institutions profitability or they don’t get to dip into the cookie jar, they self regulate and write new rules to prohibit such competition. Audit the fed. That three word statement carries much more gravity than most people realize. If we do not know our history, we are condemned to repeat it.
Debt is a very dangerous proposition. There is no such thing as a safe mortgage loan.