AQB Second Exposure Draft - Proposed Changes to Real Property Appraiser Qualification Criteria

[George Hatch]

I think there's a big difference between appraising one property type several times a week vs the broader scope of practice across multiple property types and not repeating any of them in any given month. There's a lot to understand about how SFRs/Condos work and it takes a long time to figure out all the different variations therein. A lot to understand about the expectations of those clients and users. Multiplying the number of details by few times over and it takes a lot longer to learn enough to operate solo.

 

[Surf Cat]

It's interesting that a couple of the posters in this thread ran a successful fee shop yet, still champion the AMC model.

The HVCC was the cliff that the appraisal profession went over. Once the lenders no longer employed Chief appraisers and staff, no longer paid their salary and benefits, no longer reviewed sample appraisals from the appraisers that were to be on their roster, and subsequently handed the whole ball of wax to AMCs...lenders now pay ZERO for appraisal services and entrance into the profession died.

I really enjoyed the fee shop environment although I have read from some appraisers here that belong to the Forum, despised that system. My experience was from what DW described in post # 26. The chief appraiser and owner of the shop I worked for created a win-win. I was trained, mentored, received help and advice from the other 15 appraisers on staff in tough situations.

Bottle line, the fee shop works only when the volume and fee spread is large enough to pay the lead appraiser, staff, trainees, and overhead.

When appraisers themselves had to pay the required middleman for their services from their own fee, fee shops closed en mass..... every Appraiser for himself. If you were a trainee back then, so sorry too bad, you were on your own, as mentors didn't have the inclination to train you for nothing. The cherry on top of this whole debacle, and what Chad mentioned, is that some AMC's specifically stated in their engagement letters that trainees were not to work on their assignments.... signing appraisers only.

What did the powers that be think was going to happen?

 

[DWiley]

I'm a little surprised that you favored the mentoring model. In your honest opinion, do you believe PAREA will produce the same level (or sufficient level) of competency in CG trainees as a good mentor(s)?

And to your second statement, it is unfortunate, but when appraisers don't see themselves outside of form fillers, it would only make sense that they don't view the profession as a business/professional office.

As far as I know, there is no PAREA for CG.

Having said that, when I look at changes in the appraisal landscape, I think the change has to be measured against the current state. The current state has produced a lot of appraisers who come to this forum (or other SM platforms) and ask, "My client has asked me how I got my adjustment rate - what do I tell them?"

It is beyond stunning to me that someone holds a CR and is completing "appraisal reports" but does not know how to support an adjustment - that's like being an NFL quarterback and not knowing how to pass a football.

 

[Surf Cat]

I finished my last report of my career last night.

Well, 85.5 more hours, none of it will matter to me.

Dude..... That's Heavy. What are you going to do with yourself? Go fishing, travel, speed date?

 

[Mile High Trout]

What is the minimum age to start PAREA?

I'm getting a CG license! You get a CG license!

CG licenses for EVERYONE!

The college requirement provided a basic age minimum, that's gone now. Never agreed with the college requirement in the first place, it was misplaced.

You guys are missing the big picture.

These changes allow so many avenues of entry with unforeseen consequences.

Every single a m c employee will soon be a licensed appraiser. All the data processors and menial work paper shufflers will soon be licensed appraisers as well. Every county assessor. Half the underwriting staff, etc, etc.

Those third party India appraisal typist people, they're all getting licenses.

No restrictions, only basic process compliance and filling out applications.

PAY TO PLAY.

Now that the asb, ASC, taf, and most of the state boards are completely co opted by the a m c industry, they all played along (in between sexting flirt messages and planning the next vaca, as we have learned from the latest round of lawsuit discovery.)

This was a way better approach to competent industry management and protecting the public trust than simply demanding cost plus billing and clearly separated fees. WAY BETTER.

Good thing so many of the appraisal trade group insiders played along with the exploit and became integrated with the a m c industry.

The paper also highlights the new situation of disproportionate CG's. A m c's totally decimated the industry. Far more than 40k people are gone from service to the public for frt and gse work. A hundred thousand never materialized and tens of thousands more fled to private or worked to cg status.

There is no amount of industry reform or pass through allowance for easier to attain licensing that will solve the problem.

The problem is appraisers do not have meaningful or fair representation. Fraud is the new status quo, all the lead appraisers gaming the a m c system are in on this. Perhaps you've heard the term; the franchise model.

People really don't understand the scale of the problem. The a m c appraisers have been violating personal inspection rules, signature sharing, using runners, outsourcing everything, raking grossly disproportionate shares of assignment volume. They've literally raked in millions by participating in the fraud. Comes from the top down, which is why nobody does anything about it.

The proposed changes are in violation of administrative procedural acts as well.

A m c's wrote the allowances. They run the entire thing now. A m c's do not provide separation from loan production.

A m c's ARE loan production. And now they'll have as many licensed appraisers on staff they want, and can create new ones with basic application strategy.

 

[Mile High Trout]

As far as I know, there is no PAREA for CG.

Having said that, when I look at changes in the appraisal landscape, I think the change has to be measured against the current state. The current state has produced a lot of appraisers who come to this forum (or other SM platforms) and ask, "My client has asked me how I got my adjustment rate - what do I tell them?"

It is beyond stunning to me that someone holds a CR and is completing "appraisal reports" but does not know how to support an adjustment - that's like being an NFL quarterback and not knowing how to pass a football.

Actually read the document dude.

It's in there. It's not PAREA. The 'multiple pathways.'

It's in there.

I'm getting a CG license and there is nothing anyone can do to stop me.

The only people whom will remain tied to CR is going to be the technically illiterate and the high turnover skeleton crew the middle managers keep on hand for regulatory compliance reasons, they'll all be underpaid menial employees.

 

[TerryRohrer]

...speed date?

 

[George Hatch]

The cumulative failure rate for the licensing test is 50% and the failure rate for the income courses it takes to qualify to take the test is another 50%. I assume the PAREA courses have their own failure rate. The stats for the CR license demonstrate that not everyone has what it takes to navigate the QE and testing.

 

[Mile High Trout]

The mentor situation was the established and obvious solution prior to licensing. Licensing changed that, but so the advances in technology, desktop PCs, digitized data sources in both CR-RM and online, email and the internet.

In 1990 you just about *couldn't* have operated efficiently as a sole practitioner. Not on a production scale. Appraisers had to work in groups in order to cover the office and related overhead it took to operate as a fee appraiser. I remember one analysis at the time concluding that the minimum size of a full service fee SFR appraisal operation started at 4 appraisers + 1 admin. Less than that resulted in undue overhead burdens.

In 1990 the concept of PAREA could not have been developed or implemented. (which I still don't think PAREA is an actual substitute for competent supervision). In 1990 nobody could have foreseen how the big players would vertically integrate these various operations and exploit the economy of scale to the extent that they have. Among other tech-enabled opportunities.

My point is that some of these elements were always subject to change depending on the technological basis at both the appraiser AND THE USER levels, which most of the participants in this discussion seems intent on gaslighting.

The key point being, in response to your comment, was that appraisers were stripped of any and all fair advocacy and representation.

Half the exploits in this industry came by way of hostile business take over and outright intimidation and mafia style engagement. More than half.

There was adequate opportunity to turn things around in defense of the mission, and the integrity of the appraisal industry.

Just one problem; Nearly everyone in the appraisal trade groups whom were in positions of leadership were in on the fraud. They paid to play.

The appraisal industry is a puppet on strings.




Missing the IVPI Proposal yet?

https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf

That's all that was ever needed, the IVPI Proposal.

The contrast between VA work and all the other frt gse work makes this beyond irrefutable. The IVPI would have prevented most of the fraud which has now become the status quo of the appraisal industry.

This industry deserves no trust from the public for anything to do with mortgage lending. Honest voices are drowned out. Honest participators can no longer compete on a level playing field. Predatory engagement rules the decade and beyond. The problem is only getting worse. I like Mike Ford's take; Only the investors can set this straight. Sadly, they're incentivized to look the other way, as defaulted property holdings are funneled directly to their shared interests at firesale pricing upstream of first choice ahead of regular consumers via the FNMA Whole Loan programs. They've moved trillions of dollars worth of housing directly to investors. It's why there will never be a real forensic review effort for failed portfolios ever again. From the crt's to the firesales, a complete 180 degree policy turn around which demands appraiser engagement which used to be strictly prohibited, now become the required, predatory lending has gained more ground than ever before.

 

[TerryRohrer]

The cumulative failure rate for the licensing test is 50% and the failure rate for the income courses it takes to qualify to take the test is another 50%. I assume the PAREA courses have their own failure rate. The stats for the CR license demonstrate that not everyone has what it takes to navigate the QE and testing.

The company line (anonymously, online):

"
This post was brought to my attention. I have asked two AI PAREA graduates to reach out to you. I am the AI PAREA Mentor Manager, and AI PAREA may be an option for you, depending on your state. As noted in another post, we have a 100% state exam pass rate for AI PAREA LR graduates (as of 06/30/2025). That speaks volumes in comparison to the standard supervisor/trainee current pass rate.

There are advantages and disadvantages to both routes. No, the Mentors cannot take you on-site for local measurements, data, etc.; however, AI PAREA provides you with the tools to gain this experience after graduation. Some Appraisal Institute local chapter members are offering assistance to AI PAREA Participants to learn such tools. Several of our graduates have found alternative routes to gain that experience.

Check out our PAREA FAQs page for additional information, especially scholarship opportunities. https://www.appraisalinstitute.org/the-appraisal-profession/parea/parea-faqs

Good luck with your decision! Real Estate Appraisal can be a rewarding career!"