For a while now I've been thinking about the changes in the residential mortgage appraisal business. Why has it gone downhill? Why has the standard become "give ‘em what they want" even though over the past few years almost all res appraisers were swamped with work? Licensing and the shift from lender to mortgage brokers ordering appraisals are the primary factors. Why did originations shift from lenders to mortgage brokers? Many analyses showed that it was cheaper for lenders if mortgage brokers did their originations. Lender staff and loan officers was more expensive. Prior to licensing, lenders had approved lists. Appraisers had to apply, send in samples, and have their work periodically reviewed. Now, there are very few of those lists. Instead those ordering appraisals just look for state licenses. Mortgage brokers are paid on 100% commission. An appraisal that doesn't make the deal work is of no use to them. If the loan goes bad, there is seldom recourse to the mortgage brokers. If there would have been licensing but lenders still ordered appraisals and had appraisal departments, "lets make a deal" would not have become the standard. Most trainees would be trained by lenders as staff appraisers, not in sweat shops working for peanuts. An idea I recently heard was that the "lets make a deal" of appraisals and appraisers could reflect poorly on all appraisers, not just residential form fillers. What's the future?