MReport September 2015 - Cool Under Pressure

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this issue, the NAC recently released a white paper, titled "Proposed Residential Appraisal Solutions Overview," which advocates for the inclusion of streamlined language in state appraiser trainee regulations in jurisdictions where there are too many barriers to entry. But it's not just state regulations that remain a burden. Financial firms also have taxing expectations. "Lenders will simply not accept trainees as the primary inspecting appraiser," added Durbin with Valuation Vision. "As such, supervisory appraisers must accompany trainees on every inspection. This makes it impossible to scale an appraisal practice. There are only so many hours in the day that a supervisory appraiser can spend inspecting properties. Add to that reviewing the written report and [the] supervisory appraiser[s] might as well do the work themselves. It is a shame lenders do not recognize that the certified appraisers they used today were trained to do inspections by themselves in the past." The NAC also launched a new subcommittee to advocate on behalf of new appraisers to grow their influence in the business and to break down barriers to training. Known as the "Society of Young Appraisal Professionals," the group is one of the first of its kind since it focuses solely on issues impacting new appraisers and trainees. "If we do nothing as an industry to tackle this issue, the appraisal profession as we know it will simply cease to exist," explained Erik Richard, CEO of Landmark Network and a member of the NAC Society of Young Appraisal Professionals. "Mortgage bankers and Realtors have very powerful lobbies in D.C. and as our industry becomes more of a burden with three-week turn times and skyrocketing fees they will seek other remedies. Unless we lead the effort to fix this problem, I am confident we won't be part of the solution." Unfortunately, new talent looking for a career may bypass the many perks of the appraisal business in exchange for an easier starting point on another career path. Still, the profession has a mystic, almost alluring quality, and fringe benefits not offered on other career paths. "We continue to find interested applicants that are drawn to job flexibility as well as opportunity to utilize advancing technologies," noted Fall. "Most understand that full earnings potential will not be obtained for a couple of years." If the trend continues, the future of residential valuations could be a bleak one, or at least one in which consumers and lenders end up holding the bag when it comes to rising costs. When asked what the industry will look like without a resurgence in new trainees and streamlined regulations, appraisers threw out the most likely scenarios. "It will probably be non-existent, as a lack of providers and the resulting significant service delays will likely lead the lending industry to push regulators to allow adoption of alternative solutions for valuing residential real estate in segments where appraisals are currently required," noted Floyd. Valuation Vision's Durbin worries about a supply-demand imbalance. "Initially the impact on the consumer will be higher valuation costs and extended closing times," Durbin said. "It is simple supply and demand. With less certified appraisers available, costs will increase and assignments will be backlogged." "Further down the line the lending industry will inevitably find other valuation solutions that may be riskier for the consumer," he further explained. "If appraisers are not readily available, other solutions such as AVMs and BPOs may be considered as alternatives. While these products have their place in valuation, they are certainly less preferable and riskier than an appraisal performed by a competent certified appraiser for origination purposes." With that in mind, residential appraisers committed to the profession are not waiting for tech products to take hold. They are fighting to ensure the appraiser on the street continues to be valued for offering flexibility, knowledge and independence throughout the process. Editor's note: The Five Star Institute is the parent com- pany of the National Appraisal Congress, MReport, and Kerri PanchuK is an attorney and financial writer with more than a decade of experience covering real estate, default servicing, residential mortgage-backed securities, retail, macroeconomics, and commercial real estate. Panchuk graduated from the Southern Methodist University Dedman School of Law and Texas Tech University. Panchuk previously served as online managing editor/producer and webcast anchor. In April, she rejoined the Five Star Institute as executive director of member groups, overseeing the development and growth of the National Appraisal Congress and Default Title Coalition. Panchuk is a member of the State Bar of Texas. Feature 26 | Th e M Rep o RT

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