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Feature Able to mine massive amounts of data, AVMs are adept at checking through the more routine points of appraisal, lightening the load for humans trying to come to a value. However, what they lack is that "human element," that ability to examine the finer points to determine which factors will add to a property's transactional value and which ones will have little bearing. Because of that absence of critical judgment, they can be easily manipulated, leading to homes being under- or overvalued. "I don't think that, since we're talking about an opinion of value, we can or should eliminate the human part of it," Sorenson said. "The term that's been put into all of the compliance and regulations is 'opinion of value.' I don't think an algorithm can give an opinion." However, Huff maintains that companies will need to adopt a healthier attitude toward these modeling processes if the valuations segment wants to move forward along with the rest of housing finance. The point to remember, he says, is that AVMs were never meant to serve as a replacement for working professionals, but rather were created as another tool to help. "The use of technology to support human business processes is extremely important if we're going to help maintain margins as we go forward as lenders and professionals in this industry. It's going to be hard to survive without implementing technology to help support these business practices," he said. Drawing in New Talent F inally, there's the issue of labor. While many lenders are now moving and reducing staff in response to the market's shift away from refinances, the valuations sector has the opposite problem. According to estimates from the Appraisal Institute, the overall number of appraisers across the United States continues to decline at a rate of 3 percent per year; the institute forecasts a drop of 25 to 35 percent during the next decade due to age attrition and fewer new entrants. With more than half of the current appraiser population falling between the ages of 51 and 65, it's going to be necessary for the survival of the industry to bring in younger professionals—a difficult proposition, given the current barriers to entry. "It's really difficult to become an appraiser," explained Tony Pistilli, EVP and chief appraiser at Axios Valuation Solutions. "I think the appraisal foundation that establishes the criteria—the Appraiser Qualifications Board— is looking internationally at other countries that have even more stringent requirements for becoming . . . what we call an appraiser. It's just not going in the right direction." As of 2013, aspiring appraisers must clear a number of hurdles to practice their profession, including receiving a minimum of 150 appraisal education hours (to become licensed, 200 to become certified) and a minimum number of credit hours from an accredited college or university (none to receive a license, at least 21 to be certified). Starting in 2015, licensed appraisers must have at least 30 credit hours, while certified professionals must have a bachelor's degree or higher. With a low-paying training position waiting for them, it's little wonder graduates are reluctant to go into the field, especially with student loan defaults climbing to crisis levels. As Pistilli said, "You graduate from college, and you're three years away from making any money." A lack of available labor to take on new work means turnaround times several times longer than the average in some states, Pistilli says—and that may drive banks to seek other alternatives to move things along. "If it takes six to eight weeks to get a loan done because there are no appraisers, they'll find a different solution," he said. "I think a Realtor, with the right technology and the right tools—at some point, it could be possible that that's the chosen valuation method." Not everyone shares the view that the industry's talent "crisis" is actually a crisis, however. For Gaenzler, it's just "part and parcel of the ebb and flow of the market." "Even the lending community has had a tough time with trying to figure out what is the right size of their business," he said. "I'm not sure we're going to need as many people in the industry over the next two to five years as the market changes." The M Report | 25