AQB Update On Proposed Changes To Appraiser Qualifications

[Joe Flacco]

Not working for whom?

Some appraisers are doing okay when considering the oversupply they're competing against. Others, not so much.

I work in the appraisal business too. I'm just not limited to doing the kind of work you do. I made the sacrifices it took to expand my skills and FOR ME the extra effort paid off.

Not working for the public. Not working for public trust.

What do you know about my business George? What kind of work do I do?

 

[George Hatch]

If you weren't referring to the business of appraising then maybe you shouldn't have used the term business and independent in the same sentence. Same thing when you earlier referred to pre-licensing being so much better when you actually had no clue of what you were talking about.


You're an SFR appraiser, right? I'm not limited to doing that.

I've appraised a number of homes in the last few years but not one of those assignments involved a GSE appraisal form. Or an AMC.

 

[Joe Flacco]

You're an SFR appraiser, right? I'm not limited to doing that.

I've appraised a number of homes in the last few years but not one of those assignments involved a GSE appraisal form. Or an AMC.

That's right. I appraise SFR. What does that have anything to do with if I am doing okay or not? Do you know what kind of work I do or my income?

If you are only appraising a number of residential properties in the last few years than maybe you should not even have an opinion about residential licensing. Why is it your business? It is starting to sound to me that you believe residential is for dummies and anybody can do it. Maybe you should just keep your mouth shut about residential licensing issues.

 

[J Grant]

I discussed the issue with him at length right when it happened (because I was curious) , and as I said, the reason he and his boss hired that guy at $12/hr was because they could. Not because they actually needed the additional skills.
One of my other sons dated a girl who spent $150k on a 4yr degree from Univ. of San Diego for a communications degree. She still works in retail at the same type of job she had at 16. She's 31 now.
But, maybe she's more ethical than the kids she works with.

Did you talk to the boss himself and learn his reasoning? If they can get more skills/education at $12 an hour, they could and they did. They appreciated the additional skills, one presumes, since he was the one who got the job. I still still fail to get your point, nor from the anecdote about the college ed girl working in retail or swipe about her ethics. Your posts now have given up any semblance of logic and are just bitter jabs at college grads .

 

[timd354]

The 2 dominant models at the time involved a combination of lender-employed appraisal departments and fee shops of various sizes, the functional ones starting at about 4 heads but the largest ones having dozens. There weren't that many SFR appraisers who worked solo because you basically couldn't make the overhead work unless you divided the costs between several people's production.

Back then the appraiser/client relationship was a big deal because whether you were a genius or a fool it was all about your personal connections. The quality control came in at the lender level via their review appraisers, with most disagreements and disputes settled via the appeal to authority; either "I'm right because I work for the lender", or "I'm right because I'm an SRA or an RM". The only appraisal standards that applied were whatever the lender thought was good appraisal practice.

If you want to know where that underlying sense of paranoia about there being no such thing as an acceptable appraisal because someone can always interpret things their own way, it came from that. The reviewers could just about make stuff up as they went along and you had to submit to them as if they were right because if you didn't THE REVIEWER would cut you off based on their personal say-so.

The thing now where if someone at the lender tells you to do something dumb and you explain your way out of it using the same rules that apply to them? That basically didn't exist back then. You were always in the subordinate position and you'd only come out on top if you could get the Chief Appraiser to agree with you over their own reviewer - which would happen on a rare occasion but not very often.

Yes, there were some appraisal shops that ran a real tight ship but there were also some that looked like a special education camp. There were any number people who had trained themselves by buying/reading a couple Henry Harrison books on how to fill out the URAR and how to appraise 2-4s who went on to build/run their own shops based on a single client relationship - often a marital or familial or friendship relationship. Some of those appraisers did okay and some didn't.

I knew one appraiser whose business plan was to hit up the bars where the loan processors from the big appraisal departments at the banks and the mortgage brokers would frequent after work. He'd "date" them and build his client base that way; and lemme tell you that was a very successful program for 20-something surferdude from Australia. Fortunately he was also a conscientious appraiser - which also helped - but not just anyone would be able to make a career out of that.

He was able to get a license at the outset but he was unable to renew it because although he was a good appraiser he was also an illegal alien. He eventually got deported.


The circus went on with the commercial side as well, although less commonly because commercial appraising has such a wider scope of practice and consists of a much smaller number of assignments that include far more complicated situations. But when those deals went bad the fallout was often much worse just because of the larger scale in some of those projects. Sometimes an SFR appraiser would just haul off and do an apartment or commercial appraisal simply because they got an order from their client to do one. Especially if it was a hard money lender or a small community bank with all that nepotism.

Long story short is that it was a mixed bag. There were appraisers who were rock stars back then, just like now; but there were also some real retards the likes of which don't exist any more no matter how badly people think our worst donkeys are. There were appraisers who were *routinely* fabricating comps out of thin air just to make a deal work and unless it was a multi-million dollar deal the worst that would ever happen to them if they got caught was they'd lose their status on the one lender's approval panel. Meaning, an appraiser could go do fraudulent work indefinitely so long as the actual losses weren't enough to justify bringing in the lawyers.

Single signed appraisals, performed by people masquerading as someone else and signed by appraisers who never saw anything, were not only routine, but weren't even considered wrong if they go caught; much less punished in any way.

So no, licensing did not improve the performance of the rock stars because they were already motivated to be the rock star. But what licensing did do is improve the functional level of the bottom tier of appraisals - which was the whole idea of licensing in the first place. Those programs actually forced people to take appraisal courses (which was a first for some appraisers) covering the basics and demonstrating some experience prior to being cut loose on the world. As is inevitable, the initial transition period was chaotic and some of the idiots got in by faking their experience, but everyone had to document their appraisal courses and pass the exams; and as mentioned those exams were sufficient in difficulty that even experienced appraisers were flunking it multiple times if they tried to wing it or not take it seriously. And then there were A LOT of appraisers whose output improved significantly over the years that followed because they had a license to protect.

Moreover, we quickly got to the point where a dispute or disagreement between an appraiser and a reviewer or other party would get resolved based on which side actually knew more of what they were doing, not by status. If you had never experienced it the other way around - which many of the current critics of licensing never have - you cannot fully appreciate how much of a difference that makes in the way you approach your assignments and your client relationships. We now have a level of parity with our clients and our peers that we never had before; and it's precisely because of the external appraisal standard that greatly reduces the amount of interpretation that can be applied. To the extent that appraisers and others defer to them, those standards support the legitimate interests of both sides of that dispute, not just the one side with the money or the "I'm licensed" status.

That is a pretty accurate description of how things were pre-licensing. One of my good friends (who later became my mentor) enter the profession in the early 1980's becuase his dad had a connection with an appraiser who was designated. One thing to note is that back then virtually nobody was able to get into the profession unless they were family or had some sort of personal connection with someone already in the profession ...my friend described the situation pre-licensing as being like the mafia in which the typical appraiser was a street soldier who had to do whatever he was told no matter whether it was right or wrong and the reviewers were capos who had to be listened to and who were more interested in making deals work than whether or not the value was really there with the chief appraiser/MAI's being like godfathers whose word was absolute law and who had the power to "whack" your career if you did not do exactly what you were told. Additionally, if you got "whacked" by one "godfather"/MAI, good luck finding work elsewhere since they would blackball you and there was zero chance you could get lender work in those days without a connection and there was less than zero chance that you could directly get lender work without a designation. In the area that I am from there were 5 large appraisal shops that dominated the local lending appraisal market...my friend (who worked for one of the five) referred to them as the "five families". He also has described the various appraisal organizations as functioning like corrupt labor unions since he thought that most of the organizations were more interested in limiting the number of people who received designations to protect their turf as opposed to actually doing anything to improve the profession

That is the reason that these entities fought so hard against licensing....they knew that licensing meant the end of their cartel.

 

[Evincere]

How do you or your son know this? Did you talk to the boss himself and learn his reasoning? If they can get more skills/education at $12 an hour, they could and they did. I still fail to get your point, nor from the anecdote about the college ed girl working in retail or swipe about her ethics. Your posts now have given up any semblance of logic and are just bitter jabs at college grads .

You have just obliterated your college degree argument out of the water as it applies to currently being more preferable and advantageous criteria regarding fees or ability to perform.

 

[Evincere]

That is a pretty accurate description of how things were pre-licensing. One of my good friends (who later became my mentor) enter the profession in the early 1980'd becuase his dad had a connection with an appraiser who was designated. One thing to note is that back then virtually nobody was able to get into the profession unless they were family or had some sort of personal connection with someone already in the profession ...my friend described the situation pre-licensing as being like the mafia in which the typical appraiser was a street soldier who had to do whatever he was told no matter whether it was right or wrong and the reviewers were capos who had to be listened to and who were more interested in making deals work than whether or not the value was really there with the chief appraiser/MAI's being like godfathers whose word was absolute law and who had the power to "whack" your career if you did not do exactly what you were told. Additionally, if you got "whacked: by one "godfather"/MAI, good luck finding work elsewhere since they would blackball you and there was zero chance you could get lender work in those days without a connection. In the area that I am from there were 5 large appraisal shops that dominated the local lending appraisal market...my friend (who worked for one of the five) referred to them as the "five families". He also has described the various appraisal organizations as functioning like a corrupt t labor unions since most of the organizations were more interested in limiting the number of people who received designations to protect their turf as opposed to actually doing anything to improve the profession

That is the reason that these entities fought so hard against licensing....they knew that licensing meant the end of their cartel.

Hence, my earlier post mustache pete reference

 

[J Grant]

You have just obliterated your college degree argument out of the water as it applies to currently being more preferable and advantageous regarding fees.

Because one college grad in a different profession took an entry level job at $12 an hour? I hardly think so. But whatever, keep arguing to drop the degree so they drop it, which will allow in more low qualified trainees to compete against you. Good luck with it.

 

[George Hatch]

Did you talk to the boss himself and learn his reasoning? If they can get more skills/education at $12 an hour, they could and they did. They appreciated the additional skills, one presumes, since he was the one who got the job. I still still fail to get your point, nor from the anecdote about the college ed girl working in retail or swipe about her ethics. Your posts now have given up any semblance of logic and are just bitter jabs at college grads .

My son was an active participant in the interview and hiring process of his subordinate.

Would it be more clear if I drew the picture in crayon?

 

[George Hatch]

Because one college grad in a different profession took an entry level job at $12 an hour? I hardly think so. But whatever, keep arguing to drop the degree so they drop it, which will allow in more low qualified trainees to compete against you. Good luck with it.

I'm not arguing to drop the degree and I'm certainly not arguing to go back to the pre-2008 criteria. Stop mischaracterizing my comments because that's not going to advance your veiws.

All I'm saying is that we haven't even had the opportunity to give the 2008 criteria a fair chance before we decided - apparently without any data to support an informed conclusion - that we needed the 4yr degree in order to be a competent SFR appraiser.