AQB Update On Proposed Changes To Appraiser Qualifications

[djd09]

How many does he have to meet? Since 1989 The AQB has been a family tree with the batons being passed year to year from one small circle
https://en.wikipedia.org/wiki/Appraisal_Standards_Board#Board_members

Wow. Really interesting. I counted 40 members in 28 years.

Are they all AI members?

Only 9 women.

How many minorities?

 

[The Warrior Monk]

nonexistent? so you are saying that the difference between existing and not is a college degree? in 2005 you still had to amass 2,000-3,000 hours of experience over a minimum of 2 years, still had to take all the classes, still had to submit reports for review and still had to pass the test, which at least in ohio, has a very small pass rate for first time takers.

i guess it's a good thing that by having a college degree one is suddenly more ethical too.

A great many people, at least in the downstate NY area (which covers a lot of appraisers), took their classes through a proprietary school. The classes were simply geared toward passing the test, and pass rates were dismal. Prior to licensing, education was either through a college class or an appraisal society, and appraisers learned the theory necessary to actually solve problems. In fact, the commercial classes I took in 1991 were the reason I passed the CG test in 2013. I would have failed had I relied on the commercial classes I took circa 2000.

The fact that the pass rate was so low demonstrates how bad the state of education is. If one simply took all their qualifying education through AI, the pass rate would be much higher. There really isn't any difference between the level of difficulty in an AI exam and the state test....pass the AI courses, and you pass the state test.

As far as the hours go, much of it was a joke. Many just did cookie cutter appraisals to get their certification, because it was fast and efficient to do so. I made an issue of this very point when I complained to the NY State Appraisal Board in person regarding this matter. While my point pertained mostly to the commercial side of experience, I also brought of the residential side. Experience hours were capped as 6 hours for a single-family residential appraisal. I made the point that it was obviously unfair that whether I perform a cookie cutter appraisal in Levittown or a $100,000,000 oceanfront property in the Hamptons, I get one 6 hours of experience. Hence the experience requirements were set up to favor avoiding complex assignments, tackling difficult problems, and learning from this experience. And that is exactly what many did.

The degree requirement doesn't solve the problem, but it most certainly helped put the brakes on the opportunist just-back-from-the-prom overnight valuation "experts." Plus it creates upward fee pressure, which nobody (except AMCs) is complaining about.

 

[hastalavista]

Plus it creates upward fee pressure, which nobody (except AMCs) is complaining about.

(my bold)
I don't totally dismiss the assertion and I don't want to sidetrack this thread, but I think the primary reason the AMCs care is because their client (the lenders) care. Because if the lender's didn't care (and were willing to pay more), why would the AMCs care?

 

[djd09]

How many minorities?

Danny Wiley was the Chief from 01 - 03. He should be able to answer this question.

 

[TRESinc]

The degree requirement doesn't solve the problem, but it most certainly helped put the brakes on the opportunist just-back-from-the-prom overnight valuation "experts." Plus it creates upward fee pressure, which nobody (except AMCs) is complaining about.

how many "just-back-from-the-prom-overnight" people are willing to put in 2-5 years just to become licensed, which is just the start? not many. they way you talk about it obtaining an appraisal license is as easy as ordering a cooler from amazon, which just simply isn't true. someone who spent the last 16 years in school, gets their degree and is ready to go out in the world and make their money isn't going to want to be an apprentice appraiser and make squat for the next 3-8 years and the number of entrants into our field supports that.

 

[The Warrior Monk]

(my bold)
I don't totally dismiss the assertion and I don't want to sidetrack this thread, but I think the primary reason the AMCs care is because their client (the lenders) care. Because if the lender's didn't care (and were willing to pay more), why would the AMCs care?

Unless the model is cost+, which is not the case with the residential AMCs that are being discussed here, the AMC is simply another middleman and another mouth to feed. That upward fee pressure on the appraiser's end causes pressure on the AMC, because they either have to absorb the cost or pass it on to the lender. And because the AMCs are advocating the reduction of entry requirements into the profession, the college degree requirement is having the effect that many us believed it would have...increase in fees.

 

[George Hatch]

The stated purpose of appraiser licensing was to protect the public's interests. It was not to advance our economic interests or our social standing. That's (arguably) what the professional orgs are for.

If there was no evidence of there having been MANY good appraisers who never stepped foot in a college classroom then maybe you could make that argument. But the history is what it is and it's a little late to attempt the rewrite.

IRL, newspapers are supposedly written with the 9th grade reading level; police reports are done at the 11th grade reading level. The idea that someone who can pass an appraisal exam is incapable of learning how to write a reasonable appraisal report without going to a 4yr college program is simply not supported by the facts.

Just because there are a lot of lazy appraisers who were never held to the requirement to write in complete sentences and that "report writing" on the truncated Fannie forms has traditionally tolerated a sparse brevity in favor of the traditional syntax we would use when writing in longhand doesn't necessarily speak to those people being *incapable* of writing a coherent sentence, but rather they have never been compelled to do it in an appraisal report. I doubt many people would argue the point that churn-n-burn has most definitely been of effect on writing performance.

 

[J Grant]

(my bold)
I don't totally dismiss the assertion and I don't want to sidetrack this thread, but I think the primary reason the AMCs care is because their client (the lenders) care. Because if the lender's didn't care (and were willing to pay more), why would the AMCs care?

Not really. The primary reasons that MC's care about keeping the $ amount (fee they pay to appraisers) low, is because the AMC profits from the difference between the amount lender pays them for an order and amount AMC pays the appraiser. Therefore AMC's have an agenda to keep fees as low as possible, which is the heart of what is heart of what is wrong with the system.

Lenders charge the borrowers similar/equivalent fees in a regional area to each other. The only difference is due depending on whether they use an AMC, is how much of the borrower paid reaches the appraiser.

Lender A orders direct, charges consumer borrower $475. Lender A pays the appraiser $ 475,- or they might pay appraiser $400 if they retain $75 for processing)

Lender B orders through AMC , charges consumer borrower $450. Lender A pays AMC $475 ( one assumes ;, they don't make it public). AMC pays appraiser $300. Therefore, the AMC cares very much about the amount lenders get paid, and activates for lower education/ reduced training/supervisory hours in the hopes of getting more newbies in the field to work cheap and a larger supply of appraisers to pit against each others to compete on fee..

I will agree in part though when you say the lender cares about fees- it would pertain to those lenders who assign through an AMC. They enjoy free service, since the AMC, since the AMC makes its profit from fee split/paying appraiser less, rather than charging the lender. They'd like to keep that in place, though they may realize in future they will have to pay for the service like every other business does. Some lenders also own an AMC or own stock in it so they too would like to see fees stay low and reducing education and training to get more people in fast with lower earnings expectations is one way to accomplish that.

.

 

[The Warrior Monk]

how many "just-back-from-the-prom-overnight" people are willing to put in 2-5 years just to become licensed, which is just the start? not many. they way you talk about it obtaining an appraisal license is as easy as ordering a cooler from amazon, which just simply isn't true. someone who spent the last 16 years in school, gets their degree and is ready to go out in the world and make their money isn't going to want to be an apprentice appraiser and make squat for the next 3-8 years and the number of entrants into our field supports that.

Not 2-5 years: The absolute minimum time frame to get licensed, or the absolute minimum time to get certified, by doing cookie cutter assignments at sweat shops. And, based on my review experience, which was basically reports that came through wholesale via AMCs or MBs back then, the type of work expected from this type of situation was exactly as expected.

Also, back then, licensed appraisers were able to supervise. So one could train another person after one year in the business at that time.

 

[hastalavista]

The stated purpose of appraiser licensing was to protect the public's interests. It was not to advance our economic interests or our social standing. That's (arguably) what the professional orgs are for.

If there was no evidence of there having been MANY good appraisers who never stepped foot in a college classroom then maybe you could make that argument. But the history is what it is and it's a little late to attempt the rewrite.

IRL, newspapers are supposedly written with the 9th grade reading level; police reports are done at the 11th grade reading level. The idea that someone who can pass an appraisal exam is incapable of learning how to write a reasonable appraisal report without going to a 4yr college program is simply not supported by the facts.

Just because there are a lot of lazy appraisers who were never held to the requirement to write in complete sentences and that "report writing" on the truncated Fannie forms has traditionally tolerated a sparse brevity in favor of the traditional syntax we would use when writing in longhand doesn't necessarily speak to those people being *incapable* of writing a coherent sentence, but rather they have never been compelled to do it in an appraisal report. I doubt many people would argue the point that churn-n-burn has most definitely been of effect on writing performance.

I hear you George, but I disagree for the reasons I've already stated.
While others might make the argument that the college degree would result in an increase in fees (and I think they would) that isn't my motivation; rather, it is a consequence of my motivation; which is to raise the standing of appraisers as a group such that the stakeholders and public view them as the professional experts they are. (I, as a matter of principle, do not like unnecessary entry-barriers; the counter-argument to my position is that it is "unnecessary". I'm not convinced of that looking at the bigger picture).

This is an issue where I think reasonable people can disagree.
While any decision that is made to retain or reduce the existing formal education requirements will have some impact on me (as it will on everyone else), I do not foresee that direct/personal impact to be significant or very meaningful; likely the same is true of you and many others participating in this thread. I can live with either outcome but still advocate for the one I think best serves, on balance, the whole (our group, stakeholders in our group, and the public at large).