Death Grip on Trainees Loosening

Trainee Appraisers Unsupervised Inspections Allowed: Death Grip on Trainees Loosening

Allowing associated trainee appraisers to complete unsupervised inspections…

Appraisers, and others,

A ‘significantly large’ nationwide AMC has notified it’s vendor appraisers that certain lenders contracted with this AMC will now accept appraisal reports signed by properly trained (and presumed properly approved by the State) Trainees as the ‘Appraiser.’

This follows the Jan. 31, 2017 FNMA announcement that they will accept reports signed by Trainees.

So far, I have not seen any similar announcement from FrMAC, FHA, VA, or USDA, or any other specific lender.

The AMC’s message to their appraiser panel is below.

NOTE: This memo says the Trainee is the “only inspecting party.” That may not be factually correct in all cases, because the Supervisor appraiser has to indicate on the signature block if the Supervisor did or did not inspect the property. You should carefully read your state laws to be sure if the Supervisor appraiser is ‘required’ to also sign appraisal reports prior to submittal to the lender.

  1. By agreeing to this Addendum, we are waiving the stipulations of our primary engagement contract and Service Level Agreement (SLA) which require that an eligible supervisory appraiser inspect the subject properties with any associated trainee appraisers for all assignments involving a trainee.
  2. To remain eligible for this program, you agree to:
    • Follow all state licensing statutes and rules requirements related to the supervision of trainees.
    • Accept full responsibility for the resulting appraisal report by signing as the “Supervisory Appraiser”.
    • Only allow associated trainee appraisers to complete unsupervised inspections for conventional product (non-FHA or USDA) assignments initiated by the specific approved clients listed below.
    • Ensure that associated trainees have sufficient training and knowledge to perform all inspection tasks competently.
    • Ensure that trainees have sufficient training and knowledge to interact with the client’s customer or other transaction participants in a professional manner including but not limited to following industry best practices, such as:
      • Employ a friendly and professional demeanor and appearance during inspections.
      • Tactfully avoid inappropriate or confidential discussion topics as noted in your network agreement and competently answer common appropriate appraisal and inspection related questions.
    • Ensure that the trainee signs the appraisal report as the “Appraiser”, since they are the only inspecting party.

As noted above, FNMA and others presume the Trainee is properly trained by their Supervisor for the property type report they are signing as the Appraiser.

These policy changes are important for ‘us’ going forward, because doing appraisal work as we know it is unsustainable unless ‘we’ can attract and employ Trainees in ways that make economic sense for everyone involved.  More lenders and others need to implement similar policies.

These changes are beginning to loosen the grip which has prevented Trainee Appraisers from getting the experience necessary to replace older-aged appraisers in the future as they retire or end involvement with appraising.

Dave Towne
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on

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30 Responses

  1. Marko Mexico on Facebook Marko Mexico on Facebook says:

    Justin Principi

  2. Bubba Jay / Retired Appraiser II Bubba Jay / Retired Appraiser II says:


  3. Avatar Jack Of All Trades says:

    Why the hell would anyone train someone to be in this dead end profession……
    have you completely lost your mind ?

    • Retired Appraiser Retired Appraiser says:

      If you’re lucky they’ll reduce the rules enough to bring 70,000 gullible newbys into the business so the rest of you can sneak out the back door.

      • Mike Ford Mike Ford says:


        I loved FNMAs actual wording of “…licensed or unlicensed appraisers…”

        Most states do not allow unlicensed people to call themselves appraisers!

  4. Avatar Tom C says:

    Dave, thanks for the info but which nationwide AMC and which lenders are allowing trainees to inspect unsupervised?

    • Avatar chris says:

      The large ones that don’t pay. That is who is trying this !

      • Mike Ford Mike Ford says:

        Exactly. though I remain cautiously optimistic. the ONLY reason FNMA agreed to this to retain low appraisal fees for banks and AMCs. I refuse to pay a trainee less than $25 an hour.

        Assuming after the first few they can write drafts up in eight hours, that’s $200 per. I’m charging $150 an hour for MY time. IF I’ve trained right, I can review and revise (or direct) as needed in two hours generally (not necessarily in their first month of field work). That’s a MINIMUM of $500 not counting overhead.

        In the past Id pay 30% first month; 40% second, and 50% third for field ready trainees. I don’t know if that model would still work or not. To get $200 as 30% first month the gross fee would have to be $667.

        Pay $675 per order; give me enough work to keep three trainees busy and I’ll take on trainees AND start doing transactional UAD work again. Ten working day turn time required or volume cant be kept up and model collapses.

        Of course there is still that problem of carrying three employees. Unemployment insurance; workmans comp, employer contribution to social security OVERTIME! (plenty of legal precedent for this established already) PLUS MY office overhead.

        The FIRST TIME it takes them 16 hours to do an appraisal rather than 8 hours, I’m screwed. Can’t have ANY complex or high end (jumbo or super jumbo loan ranges) included in that model.

        Probably have to extend the scheduled raises from being monthly to bi monthly; maybe quarterly.

        You don’t think AMCs and FNMA expect me to pay LESS than $200 a day to start do you? Or to work with only $100 to $150 to myself above what I pay to the trainee do you? Nah, they CAN’T be that naïve and ill informed…can they?

  5. Avatar Seneca says:

    It’s not the inspection of the subject that is time consuming. It’s taking the comp photos. Is it OK for someone else to psychically inspect the comps as FNMA requires?

    • Avatar Dave T says:

      Seneca….I strongly suggest you read every line and word on 1004 form pages 4-6. You will find the answer to your question .

      • Avatar Seneca says:

        Dave. Those pages already contradict FNMA’s new rule for who can inspect. I was looking for clarification on the “physically inspect the comps” rule

  6. Avatar chris says:

    Why would anyone train someone to then become their competition 4 years later ???

    That is what “they” want, more over supply of appraisers, simple economic principals, supply and demand !!

    P.S.    I am so sick of the blast emails looking for the cheapest appraisers they can find. How about this….the closest appraisers, faster turn times, so the borrowers don’t have time to find another lender to beat you rates !!

    From companies we have NEVER even worked for !!!!

  7. Avatar Wayne Courtney says:

    Gee…I want to hire a COACH! Does this dude have a General Certification, A broker license, a degree in real estate from any accredited university? Has he ever developed a subdivision with the building of homes? Maybe a shopping Center…. Does he have a record of development? How about hotels, planned unit developments… . Maybe this guru knows about airport development or anything else beyond the silly bull shit trying to sell Does he have a designation as a MAI, CCIM, GRI… Is he just pulling our leg as far as his most silly credentials… Is he a joke? And YOU want to pay him for what? (yep, show me that you are not a joke)

    Here is your sign! Any you are going to pay him for what?

  8. Avatar Wayne Courtney says:

    Gee…does this guy know about valuation of right of way, slope easements, temporary construction easements. drainage easements, slope easements. flood plain, flood way, Oil and gas rights, transmissions easements…I mean…Come on….this dude is going to coach us as to what? Too silly to describe..he should be ashamed ! He is going to teach us WHAT? Really….Does he know what the value of the Empire State Building or the Loews Anitole…maybe the the Astrdome? Really. dude….go the ***K away! You are too silly to describe!

  9. Avatar Dave Towne says:

    Does anyone know who this “Wayne Courtney” is??  The person is not an appraiser under that name on the Appraisal Registry.

    • Dave, he is an active certified general appraiser in Texas. If you search by his last name and state, you’ll find him. The comments where he’s mentioning the coach are regarding the “Appraiser Coach”… it appears he has an issue with him, the coach… not you. He also authored this article “Special” Type of Apppraiser

    • Avatar Wayne Courtney says:

      Hello Dave, my previous comments were focused at the general trend of many to undermine the appraisal profession as a whole. Personally….I do not care what any AMC on this planet wants or will allow as I will never prepare an appraisal for an AMC. I have sent a personal introduction to your website. I am a general certified appraiser and real estate broker with 45 years experience. I have taught real estate and appraisal classes, built homes, managed properties, approved as expert witness in numerous courts, VA approved, FHA review appraiser, FEMA inspector, Property arbitrator for state of TX, TX DOT approved, etc. etc.

      I have no desire to fuss with you on this public form but it seems we have some disagreements. I could easily ask the question of who is this “Dave Towne”? LOL My general certification was NOT issued to me by any AMC or FNMA. Personally I do not care what they want! Appraisals for mortgage lending is NOT the only source of appraisals. As professionals, it is US….those who hold a license or certification that should be in control as to what requirements are necessary to prepare an appraisal. Yes…I Know “they” have the money…….Let’s see how long “they” stay in the business without “US”! Oh well….and the beat goes on!

  10. Baggins Baggins says:

    Oh man, this is the topic where the road forks. A person whom is not yet licensed is not fully qualified, and should not be completing live inspections for origination. The qualification of ‘sufficient training and knowledge to perform all inspection tasks properly’ leaves a wide margin of interpretation. Do you know how many residential home owner challenge questions I’ve been asked, and answered? 

    Implosion meter just moved one more minute to midnight. If this industry wants to promote growth it’s probably a better idea to not increase the deminis, eliminate over 90% ltv’s, and stop eliminating appraisers opportunity for more orders by allowing automated substitution. Licensed MB, possibly licensed realtor, qualified underwriting, likely accredited home inspector, the list of people involved with each individual mortgage deal can be extensive, city guys, legal, professional family members, insurance, taxation, police, lawyers, etc, etc.  Enter the unlicensed appraisal inspection assistant to tie this all together right? Appraisals all about math and not real property, the licensed guy can do everything he needs from the comfort of his desk?

    The industry in the same year moved to allow unlicensed appraisal inspections while also allowing the opt out of A and possibly B paper borrowers to require appraisals. This broken record is going to skip right back to the same beat. I’ll look forward to puppy mills, renewed proliferation of under cutting fee activity, and stories of lackluster practices. They’ll compete by fee and not quality. Cost savings from reduced cost of appraisal practices will not be returned to borrowing consumers and instead will be a financial incentive to select discount appraisers for distributors. aka unearned fee junk fee. The beat skips on.

  11. Mike Ford Mike Ford says:

    The trainee will be ‘deemed to be competent’ only up until the first complaint goes to the state. Then, even if the value is right on the money hope there was not some otherwise meaningless incidental technical oversight (like failed to observe and report if heat, fire and smoke alarm was combined in O2 sensor or separate unit) ‘and compliant with local code’.

    • Avatar Dave Towne says:

      Licensing is a “states rights” issue.  There are some states that do not have mandatory licensing for appraisers.  That’s why FNMA had to write their policy statement the way they did.

      • Mike Ford, AGA, CA AG, GAA, RAA, Realtor ® Mike Ford, AGA, CA AG, GAA, RAA, Realtor ® says:

        miss-posted? I’m pretty sure there are no states without a mandatory licensing requirement. If they exist then they are not in compliance with FIRREA and are ineligible for GSE financing.

        Dave I know there are some states with no trainee license requirements but those same states also have a requirement that the supervisory appraisal shall accompany the trainee for from six months to two years depending on state. FNMA can only waive their own former requirements-not the states laws that were passed to conform to FIRREA.

      • Apologies to Dave! MY own state (California) is not a mandatory licensing state (anymore). UNLESS it involves an FRT they simply don’t care. They won’t even prosecute ex licensed appraisers with revoked licenses that advertise themselves as appraisers still. One regulator even told me she tells trainees not to bother getting trainee licenses anymore.

        As long as they are unlicensed and not signing on the left the state has a ‘hands off’ policy.

  12. Avatar Chris says:

    I think part of the problem with residential appraising is that the people in charge of these large groups are commercial/industrial appraisers running the show. These commercial/industrial appraisers do not care about residential appraisers or residential appraisals in any way, why, cause they do very few residential reports with AMC’s running the show. Residential appraisers, in my opinion, do not have time to devote to the cause. We have to many comp photos to shoot and short turn times promised to these AMC’s. Except for you semi-retired residential appraisers of course. Just food for thought.

  13. Avatar Wayne says:

    Well we always have folks like “Dave” who will instruct us as to the way an appraiser should bow down to the AMC and beg for our fees! we would not want to put any pressure on wonderful clients such as AMCs! lol

  14. Avatar Christianne says:

    Looking for some advise from this group of experienced appraisers. I am looking to enter the profession as a trainee. I am well aware of the difficutly of finding a mentor. Thus, I am wondering if a mentor would be easier to obtain if I could offered the 3 following points:

    1) To sign a non-compete agreement (What is the recommended time length and radius of that agreement.)

    2) To work for FREE while Training

    3) To agree to pay a percentage of my earnings in the first two years with a set cap each year. For example 20% of all profits with a $7,500  cap per year (how does this number sound initially?)

    I recognize the lack of an incentive for a mentor to take on a trainee and am trying to figure out what would make it “Worth it” for the mentor. I figure being a trainee is similar to going to a tech school and thus, paying a price is reasonable.

    I appreciate any thoughts!

    Thanks for your time,

  15. Christianne, I applaud your open minded approach but disagree with the specifics. You are operating under a misunderstanding.

    I am more concerned about you proving your commitment to the profession. I suggest you take two Appraisal Institute live courses before job hunting. (1) Whatever they are calling their fundamental “Principles and practices” these days; and (2) Appraisal report writing. ASA would be a recognized alternative. While there are many excellent course providers out there, taking these two course from the named providers sets you apart and demonstrates commitment up front. Talk is cheap. Demonstrate. Once hired, buy Henry Harrisons “HOW TO” books for URAR, UAD, Condo, and 2-4 Unit Residential Income Property and associate yourself with a peer group (such as American Guild of Appraisers, ASA, NAIFA or others. Research!) AND take formal (classroom) courses on income approach as soon after you understand fundamentals of SFRs as practical. Good luck.

    I have thirty years experience. You are not going to compete with me. I assume you have the integrity not to try to steal my clients or I should not be trusting you to enter peoples homes or businesses on behalf of my firm. WHEN we agree you are ready I will keep you employed part time while you try to build your own separate business. If you use my office and resources, then you will pay me a fee per assignment. If I’m not otherwise involved maybe 5% to 10%. If I have to review your work or co sign it, then the fee goes up. Possibly to 50% if I’m co signing. IF I have trained you right, you will be a lifelong source of future referrals to me…jobs you cannot do…yet.

    I don’t believe in people working for free. More importantly, the risk of being sued months or years down the road for not paying you is simply too great. If I claim to be a teacher or mentor we then have state educational institutions licensing issues to deal with…as well as IRS (potentially). here are attorneys out there that specialize in going after IC violators.

    Lastly, if you think there is a good chance you will earn $37,500 in your first year you are badly disillusioned. It’s possible, but not very probable. You will need another source of RELIABLE income during your first year or two of training. When part time appraisal income warrants it, you can then transition away from your other job.

    Just my thoughts. Others here will have different views and experiences to share.

  16. Baggins Baggins says:

    It happened. Trainees can inspect.

    Game over. Appraisal will never be the same, a dramatic ramp up of poorly qualified practitioners is already underway, dramatic fee stagnation and reduction comes next.

    Amc’s will be the new puppy mills. They’ll at a minimum even under current rules probably provide licenses to anywhere from 3-30+ new appraisers, per year, per amc. Think about it, the amc’s are required to have licensed appraisers, and automatically many amc employees are now able to claim earned hours for amc review work performed.

    Coincidence that almost every major amc in this country suddenly launched appraiser hiring campaigns? Probably not. Also of interesting note, now that amc salary expectations are more clearly defined in the income data tracking segments, it would appear that the appraiser is consistently one of the lowest paid positions and even the order assigners and unlicensed ‘analysts’ are routinely paid more.

    I said it elsewhere and will say it again, everyone is running the appraisal industry except appraisers.

  17. Maybe Im on the wrong tack. Instead of trying to help myself along with my fellow appraisers, maybe I should think in terms of the new appraisal paradigm?

    With unlicensed ‘appraisers’; arbitrary FNMA regulations; lack of meaningful USPAP enforcement, constant carve outs, etc. it would amaze me if a majority of GSE transaction work is bulletproof or even reasonably close anymore.

    Lawsuits. THATS where the appraisal profession big money will be in the future!

    Maybe ALL of us that still believe in USPAP and try to perform in accordance with it need to become hired guns (more politely referred to as EWs) for attorneys suing deep pocket, national appraisal management companies.

    Instead of $350 to $450 SFR appraisals…think in terms of $3,500 to $4,500 microscopic technical reviews and $400 and hour EW fees.

    …and there is no rule against soliciting direct to agents; brokers, borrowers or even lenders that are aggrieved.

  18. Avatar Anthony Capoccia says:

    Michigan appraisers still CANNOT have trainees inspect unsupervised for typical lender work.  If only the trainee inspected the property then both the trainee and the supervisor must sign the report, as the trainee was the only “inspecting” party. However, Michigan appraiser law states that a limited license appraiser cannot sign the report if it’s for a federally-related transaction. Therefore, those of us in Michigan still can’t send a trainee to do unsupervised inspections on lender work because if the trainee doesn’t sign the report we’ll violate Fannie Mae guidelines and if they do then we’ll violate Michigan law. All in all this Fannie Mae notice is still meaningless to us until Michigan law specifies that limited license appraisers can co-sign reports in such cases.

  19. Avatar Carrie Smith says:

    I am reviewing a report in Atlanta Georgia performed by a trainee in Ponde Vedra Florida. Now how can a trainee from Ponde Vedra Florida be appraising in Atlanta Georgia?? Then when the market falls apart they will blame all appraiser’s and not point out that many are now working directly for people like Solidifi who are training appraiser’s so they can keep their fee and cut independent appraiser’s out. Wake up people the game is rigged against us on purpose. It is so large amc’s can hire their own appraiser’s and pay them pennies while keeping most of the fee.


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Death Grip on Trainees Loosening

by Dave Towne time to read: 2 min