January 2017 - The World's Local Bank

TheMReport — News and strategies for the evolving mortgage marketplace.

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28 | TH E M R EP O RT FEATURE The Evolution of the Industry By George Paquette T he past several months have been challenging for all of us in the valuations industry, but at the same time, it has also presented an opportunity to alleviate some concerns that many of us have expressed. It has become evident that there are select areas across the county that have a limited sup - ply of appraisers. With only a few appraisers located in these rural areas, those based in the more metropolitan cities were encouraged to accept assign- ments outside of their immedi- ate range. The phenomenon quickly spread as we witnessed the continuation of low mort- gage rates during historically busy seasons. This led areas like Portland, Denver, and Seattle to experience extended due dates and increased fees, which led to frustrations for all involved. While this issue continues, we have made some headway over the last several months. While having great impact on lenders, it has had as much, if not a greater impact on the lender servicing market and investors valuing bulk portfolios. These clients are often working with tighter constraints and have less flexibility on due dates and pric - ing. Many times these valuations are being done to acquire a port- folio of properties, or to determine a list price for a property to be listed for sale. Traditional apprais- al products proved to be difficult in these circumstances, but as is so often the case, when a door is closed, a window is opened. Expediting Assignments Recently, many lenders have responded to the shortage on their end by loosening their re- quirements for appraiser selection and allowing the use of appren- tice appraisers with a trainee license to inspect a property. This has resulted in the comple- tion of more assignments and has provided an opportunity to allow new appraisers to enter the profession while getting real world experience. In addition, the Appraisal Foundation has taken a forward thinking ap- proach and is working to make the profession more appealing for potential appraisers. The number of licensed trainees has fallen drastically since the last housing crisis and has seen little improvement, while the market as a whole has seen dramatic gains. Several factors have impacted the number of appraisers, including appraisal management compa - nies and lenders hiring licensed and certified appraisers as part of their auditing, management, and staff appraisers. Meanwhile, many appraisers are either reduc - ing their workloads or entering into retirement, and as a result we are seeing challenges that we have not seen in the past 25 years as an asset management and appraisal management company. Empowering these professionals with the flexibility and resources to earn a living that is in line with the requirements for licens - ing, while also training future ap- praisers is key to the sustainability of the appraisal profession. The question facing the industry at this juncture is: What can an appraisal manage - ment company do during this complex time to help expedite the appraisal process? It is more important than ever to tailor appraisal assignment instructions Breaking Down Valuation With the increasing amount of technology and innovation surrounding the valuation industry, appraisers are faced with multiple factors that will ultimately lead to the restructuring of their business. T he valuation industry has reached a pendulum shift that is resulting in the end of an era. Traditionalism has been replaced with modern technology, and as appraisers guide themselves through industry changes, they are also struggling to find answers to their problems. As the industry becomes more digitized, the emergence of big data and hybrid appraisal products are helping businesses streamline their workflow while allowing room for partnerships and collaboration. Appraisers are also dealing with regulation and program implementation from GSEs, which are shaping the course of the industry. This valuation update will discuss pertinent issues from the perspective of various appraisers regarding the state of valuation, from technology to recruiting the next generation. * * * * * * * * * * * *

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