By Alan Hummel, Chief Appraiser Forsythe Appraisal
The topic may seem peculiar at a time when mortgage originations are down from the heyday of the early 2000s, but if the issue isn’t addressed now, a shortage of qualified residential appraisers could have a dampening effect on the mortgage market at precisely the moment when it is trying to regain its past vibrancy.
The decline in the numbers of appraisers entering the profession can be attributed to many factors including (but not limited to): qualifications and licensing requirements, the economics involved in training, and unwillingness on the part of some financial institutions to allow trainee appraisers to perform services. The most significant obstacle for many trainee appraisers is completing the 2,500 hours of required experience to achieve Certified Residential status, after the education component has been completed.
My comment: The only answer is for lenders to allow trainees to “sign on their own”.Hummel proposes a training program. But, I don’t see this happening on a large scale. Since Fannie and Freddie started loan securitization in the 1970s, the volume of appraisals needed has been very, very cyclical. Before licensing, most appraisers were employees of lenders. Lenders solved the problem by hiring armies of trainees during boom times and then laying them off when volume dropped. Few appraisers are employees of lenders now. Fee appraisers have been expected to train new appraisers. Lenders paid them a salary and experienced salaried appraisers were the supervisors. But, fee appraisers are not set up for it – no time, minimal supervisor training, little economic incentive, etc.
Read the full article at:
There is no shortage of appraisers in my area – and a lot of them are younger – below 40- it is a supply and demand issue, when the demand for more appraisers goes up, we will see people moving into the profession.
Lenders whine about the shortage of appraisers. However, the reason is right under their nose. The investment of school, time, and money, is not worth the “Return” that appraisers receive.
Who would want to spend 50% of their time checking a trainees work for free? A real profession would have an organized internship (Physician, Plumber, bus driver, etc.) funded, not by the trainers, but by the entity involved.
Alan’s comments are well received. That said the increased training requirements are not the primary issue resulting in appraisal “shortages” in some markets. Economics remain the primary reason. The compressed fee structure environment that has been created by AMCs have virtually eliminated the trainee budget for many practitioners. So, for those practitioners that rely on mortgage work as their primary source of business the money to bring on a trainee simply isn’t there. The good news is that this compressed fee situation is not universal. For a number of reasons many lenders are taking their appraisal management and compliance function in house. In our experience those lenders with restored in house management functions have restored fees to workable levels.
If that trend continues we may see more appraisers stay in practice and possibly add trainees.