Nonexistent Shortage of Appraisers
…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.
Respectfully submitted,
Michael F. Ford, for
American Guild of Appraisers
- The New & Improved Fannie Mae “FRAUDULATOR 2.0” - May 15, 2023
- The Scam of Racial Discrimination by Appraisers - May 10, 2023
- What Is My Incentive? - September 20, 2022
That hits the mark in the bullseye.
Well written, honest and to the point.
Thank you!
Excellent as usual!!!
Nice job Mike, as you know those comments fit every state, when the bottom feeders stop taking these jobs, maybe we can all back to earning a reasonable living.
If my fees were higher I could hire additional staff to schedule appointments and deal with the mundane aspects of the job, just like other professions. This would allow me to complete more appraisals in a shorter period of time. But as long as the fees are low and the turn times so short, it does not pay to hire people. Currently the only way to make more money in this biz is to work longer hours. When the pay is low, I focus on paying my bills and enjoying life. When fees go up, like they did for a year or so a while back, I worked nights and weekends to make as much as I could.
Sure there is a shortage of appraisers in some aspects. There is a shortage of appraisers willing to apply abide or even stay on amc approval lists. They always pocket the difference, play appraisers against each other, etc.
Lenders are advised to use mercury, appraisal port, or better yet, the value link ams distribution service which is the best of all three. Also less preferable but still available, appraisal scope and lender x.
There, 5 major companies whom allow lenders to comply with separation from loan production rules and not use amc’s. Building an appraisal panel is so simple. Set a fee that the majority of your appraisers on panel will accept without question. Amc’s do it wrong because they drive that fee to the lowest point where at least a few still accept it, most do not, then the time draws out and amc’s claim they can’t source vendors. Competing for appraisers service and patronage in a successful manner is so easy, pay more than the next outfit and watch your turn times drop and your appraiser panel grow almost immediately. We’re like any other business outfit, we go where the success is and avoid abusive vendor managers.
Good job Mike! I myself just moved back into a rural area that we got out of a few years back due to low fees. Well a good client called asking (several times) for me to go back into that area saying they have a job there, can’t find anyone and would have additional work there too. I informed them of the time it would take to get back up to speed in that area and what my fee would be. They sent it back over before getting off the phone with MY fee and a 14 day TT. That is how this should work.
Mr. Ford, that was a very good letter. Let’s all hope it brings good results.
Do you think written complaints to the OCC might help our plight?
As it relates to lenders and regulators and there interpretation of appraiser supply and demand, as 80% of residential assignments get filtered through AMC’s, many misinterpret the numbers. One can not simply determine supply and demand by taking gross state population versus gross appraiser licenses, but rather the supply of appraisers to a particular lender depends on their clients (the AMC), ability to sign up appraisers. If ND has some 340 in state and out of state participating appraisers, but yet some 50% choose to boycott the AMC model, then the supply side changes. To assume that the remaining 170 appraisers have all signed with the upwards of 300, 400, or 500 (??) operating national AMCs, and thus all are available to every lender by way of their chosen AMC model, is completely false. If 50% of the appraisers (170) have only made themselves available to a limited amount of all the AMC’s (10, 20, 30% (??) then to judge supply and demand based on these filters, is completely misleading.
Seek the truth.
Bill, that is a great point! I have at least a dozen AMC’s who I won’t do biz with because I can’t stand their convoluted automated appraisal review process. I also know appraisers who will not work with AMC’s that require them to pay a “technology fee” or to use a specific software solution (.ENV, etc).
These technology fees are relentless. Technology fees, aka; offloaded costs onto the appraiser. The only distribution platform which I have never paid that fee is the value link ams system.
Then these companies turn around and promote amc’s and give them free publicity. I object to having to pay towards a company whom colludes with amc’s and their anti competitive practices. I’m in a right to work state and should not be forced to pay to receive work.