TheMReport — News and strategies for the evolving mortgage marketplace.
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TH E M R EP O RT | 35 FEATURE as a recognized form of train- ing instead of relying on the apprenticeship model. Rather than requiring trainees to obtain thousands of hours of field experience, the combination of practicum courses, as is currently being considered by the Appraisal Qualification Board and a reduced amount of field hours, would offer a more appealing and expeditious alternative for those looking to join the industry. Such programs would break barriers that prospects face when trying to enter the profession and would offer a more stream - lined path to success. For those concerned that a reduction in experience hours will degrade competency levels, this is the path that other trade professions have taken in moving toward an education-based training model, subsequently seeing resurgence in their ranks. Program Implementation The last concern of potential appraisers is the lack of in- come security and consistency. The solution? Staff appraiser programs. Working with an appraisal management company (AMC) as a staff appraiser of - fers benefits appraisers typically wouldn't receive as a contractor, such as salaried pay, paid time off, health benefits, and 401(k) matching. Some programs even offer reimbursement for mileage, licensing expenses, or continu - ing education. This is the best of both worlds for new apprais- ers because it allows flexibility to learn and work in their own market, while offering enough stability to pay off debt and start saving for the future. Some AMCs are implementing training programs to further their staff appraisers' skill set in an ef - fort to prepare them for the ever- changing needs of the appraisal industry. Programs like these, in addition to an education-based training model, show that options are slowly but surely becoming available for new professionals who want to make their living in the appraisal industry. The next few years will be instrumental in stabilizing the appraiser profession and ensur - ing success in the valuations industry. We should look to notable organizations that have established succession plans as a must have for business success and take a similar approach for our industry. As the current appraiser community retires, the industry should take significant steps to welcome new appraisers into the fold through effective training programs and courses. With the right tools, a new generation of appraisers will step up and provide highly credible, unbiased assessments for lenders and their borrowers. All they need is for someone to open the door. MIKE FLOYD is the Chief Appraiser and SVP of Compliance at Assurant Valuations. A practicing appraiser for nearly 20 years, Floyd focuses on product quality, vendor and internal education, client communication, regulatory compliance and new product development for Assurant Valuations. * * * A Glimpse Into the Future By James Contino and William Temple W e've spent some time over the past few weeks researching papers and articles that predict what the future of the appraisal business holds for the average residential appraiser. One of the most interesting findings was titled Reengineer - ing the Appraisal Process Redux and was written by Joan Trice in 2011. As we read the paper, we reminisced on challenges the industry experienced five years ago and compared them to obstacles the appraisal industry is faced with. Industry Rewind The average age of an active ap- praiser in the industry five years ago was 54, but the average age today is 58. There was concern that the industry requirements were too strict; it was necessary for appraisers to have four-year college degree, 2,500 hours of experience, and a two-year ap- prenticeship. Small appraisal volumes for new loans was one of the biggest issues in 2011, and the economy was beginning to see new life in originations. Fast forward to 2016, the industry has noticed spot areas throughout the country, spe- cifically in Oregon and Colorado. This has lead Fannie Mae and Freddie Mac to explore alternative valuation models and loosen some of the underwriting requirements for new loans. GSE Interference Fannie Mae's new program "Day One Certainty", which was launched in December, will re- move some of the restrictions on processing a new refinance loan. If the collateral and the borrower qualify, the program will offer a Property Inspection Waiver (PIW). An appraisal is required and the lender is offered relief from specific representations and warranties concerning the value, condition and marketability of the property. This will also reduce origination costs for the home- owner and lender and will also expedite the lending process. There's no question that the valuation industry is ready for an overhaul. The appraisal process has not changed over the past three to four decades. In previous years, an appraiser would inspect a property, gather pertinent data and information, and type a report. Now, an appraiser visits the property, returns to his or her office, and sits in front of a com- puter while filling out a form re- port. While the appraisal process has evolved with technology, the volume and quality of data has taken a substantially different trajectory. Appraisers deal with an immense amount of information and data that they're unaware of or unable to access. For example, the current single family appraisal form dates back 11 years ago to 2005 with modest adjustments, like the addition of a market con - ditions page and standardization of reporting data. Recognizing Trends Moving forward, stakeholders are seeking alternatives that mini- mize personal bias and maximize the objectivity from different data heavy tools. They are also mar- ried to trend analysis that could potentially even have a predict- ability feature to better serve the consumer, lender, and investor. A benefit would be a major savings in the time element that current appraisals consume so much of in the mortgage process. As the mortgage market contin - ues to evolve, due to the demands of consumers and stakeholders for faster more accurate valuations, the appraisal and lending commu - nities will have to continue to in- novate and improve on appraisal products that can be delivered in a shorter time frame with greater valuation accuracy. JAMES "JIM" CONTINO is the VP of Appraisal Production and Compliance at TSI Appraisal. He was previously a VP at Bank of America and the CEO of Contino and Associates. Contino is a state certified general appraiser with 30 years' experience, who is licensed in Florida, Colorado, and Arizona. WILLIAM "BILL" TEMPLE is an Appraisal Review Analyst at TSI Appraisal. With 35 years of experi- ence, he was previously a bank staff appraiser for several large national institutions, VP of marketing at a major national appraisal company, reviewer at Fannie Mae in Dallas and for the FDIC.