TAF and HUD make a deal...PAREA providers win

[djd09]

you should be happy...the fish dude can help support the shilling

 

[George Hatch]

What happened to the ivpi? Did the snake oil shills act like they were going to include it with the hvcc then at the last minute convince regulators and DC to abandon it?

The agreement between Cuomo's office and Fannie/Freddie to form and fund an IVPI was never met. The link being posted is to one of several proposals by different groups and entities. Our's happened to originate among members of this forum, not in the professional orgs or the AMCs. Not that it matters because none of them went anywhere.

 

[George Hatch]

From the "HOME VALUE PROTECTION PROGRAM AND COOPERATION AGREEMENT" itself:

 

[ZZGAMAZZ]

HUD Reaches Groundbreaking Settlement with The Appraisal Foundation to Ensure Equal Opportunity in the Appraisal Profession​

Under the terms of the Agreement, The Appraisal Foundation is required to establish a $1.22 million scholarship fund, which will be utilized to cover the cost of aspiring appraisers to attend Practical Applications of Real Estate Appraisal (PAREA) programs. The PAREA program is designed to provide an alternative pathway to fulfill the experience requirement to become a state licensed appraiser. The scholarships will cover the cost of the program, which will further encourage entry into the profession. The Agreement also includes terms for marketing the PAREA program and the scholarship fund to diverse communities as well as terms for evaluating the marketing’s effectiveness to those communities and persons of color aspiring to be appraisers. In addition, the Agreement includes terms for collaboration with state and territory appraiser regulatory agencies for PAREA’s adoption and credit towards the experience requirement for licensed appraisers.

https://www.HUD.gov/press/press_releases_media_advisories/hud_no_24_176

what a clown show...

At least the scholarship fund isn't based upon a quota system to ensure that a designated class of individuals who otherwise would not qualify do indeed receive financial support.

 

[CGinMN]

Just watched this video posted by TAF of the board interviewing 2 of the best and brightest PAREA grads. A couple of things I picked up...

1. Both are very bright, but it is clear to me that a recently unboxed PAREA grad is nowhere near ready to step up shop. One of the appraisers is working for a company, and the other is starting her own business in a rural area where she couldn't find a mentor. The one working for a company has support to show them the ropes, which is basically a necessity. The other starting her own company and is working on putting together sample reports, but mentioned multiple times the need for ongoing mentorship. If you have the aptitude, PAREA probably teaches the fundamentals well enough but does not prepare the appraiser for the real world. IMO this gives credence to the argument that this shouldn't account for 100% of QE. PAREA grads should expect to work at least a couple of years under someone who can show them the ropes.

2. For the gentleman who is working for a company, he's had a difficult time getting lenders to accept his work. This is a problem for all newly licensed appraisers, especially in this market. He has an arrangement with one AMC where his work will be reviewed by someone within his company for a period of time before he's given a full go-ahead.

3. KD mentioned that TAF gave AI a $500k grant for PAREA, but the AI had invested at least $2m of their own funds. The typical PAREA tuition is around $4k, and it took both of these students around 12 months to complete the QE and the program. It sounds like the student-to-teacher ratio is around 30:1, which implies $120,000 per full-time educator. Presumably, the educators are getting some fraction of this.

4. AI Prez said they have 130 actively working through the program, 275 who have finished QE and are waiting to get in, and around 2000 interested but who have not taken QE. They had to put a time limit on the student's participation in the program because many were not progressing, which obviously comes at a cost to the educator. Last I heard 6 have graduated, but maybe there's more since then.

 

[Dale Floyd]

Thank you CGinMN for the information and your honest review.

 

[shrubberyvaluation]

Just watched this video posted by TAF of the board interviewing 2 of the best and brightest PAREA grads. A couple of things I picked up...

1. Both are very bright, but it is clear to me that a recently unboxed PAREA grad is nowhere near ready to step up shop. One of the appraisers is working for a company, and the other is starting her own business in a rural area where she couldn't find a mentor. The one working for a company has support to show them the ropes, which is basically a necessity. The other starting her own company and is working on putting together sample reports, but mentioned multiple times the need for ongoing mentorship. If you have the aptitude, PAREA probably teaches the fundamentals well enough but does not prepare the appraiser for the real world. IMO this gives credence to the argument that this shouldn't account for 100% of QE. PAREA grads should expect to work at least a couple of years under someone who can show them the ropes.

2. For the gentleman who is working for a company, he's had a difficult time getting lenders to accept his work. This is a problem for all newly licensed appraisers, especially in this market. He has an arrangement with one AMC where his work will be reviewed by someone within his company for a period of time before he's given a full go-ahead.

3. KD mentioned that TAF gave AI a $500k grant for PAREA, but the AI had invested at least $2m of their own funds. The typical PAREA tuition is around $4k, and it took both of these students around 12 months to complete the QE and the program. It sounds like the student-to-teacher ratio is around 30:1, which implies $120,000 per full-time educator. Presumably, the educators are getting some fraction of this.

4. AI Prez said they have 130 actively working through the program, 275 who have finished QE and are waiting to get in, and around 2000 interested but who have not taken QE. They had to put a time limit on the student's participation in the program because many were not progressing, which obviously comes at a cost to the educator. Last I heard 6 have graduated, but maybe there's more since then.

The 2000 interested doesn't mean much, haven't put any effort in yet. Someone fresh out of parea shouldn't be opening up a business as an independent. 12 months doesn't mean much to me, is this part time? I'd assume so.

 

[CGinMN]

3. KD mentioned that TAF gave AI a $500k grant for PAREA, but the AI had invested at least $2m of their own funds. The typical PAREA tuition is around $4k, and it took both of these students around 12 months to complete the QE and the program. It sounds like the student-to-teacher ratio is around 30:1, which implies $120,000 per full-time educator. Presumably, the educators are getting some fraction of this.

Let's assume that they have to pay the educator $70k, with another $20k in administrative overhead, so they clear $30,000 for every 30 students every year, amounting to about a 25% margin. I think these are really conservative estimates because a typical margin for an education company might be closed to 10%-15%. Just from a financial feasibility standpoint, for the AI to recoup their initial $2m investment (again conservative), they won't start to make a dime until they put around 2,000 students through the program. If they have 130 actively working the program each year, that means 15 years to profitability. I am sure they are hoping to scale, but IDK that does not sound like a wise investment for their membership, especially considering few resi appraisers are optimistic about being around in 10 years.

 

[CGinMN]

The 2000 interested doesn't mean much, haven't put any effort in yet. Someone fresh out of parea shouldn't be opening up a business as an independent. 12 months doesn't mean much to me, is this part time? I'd assume so.

Somewhere in between I think. At one point, they said part-time; at another point, it was close to full-time. If you worked FT and wanted to do this on nights and weekends and you were extra motivated you might be able to get through in a year. Of course, AI will want to push them along as quickly as they can as it sounds like they are trying to do.

 

[Non Sequitur]

Just watched this video posted by TAF of the board interviewing 2 of the best and brightest PAREA grads. A couple of things I picked up...

1. Both are very bright, but it is clear to me that a recently unboxed PAREA grad is nowhere near ready to step up shop. One of the appraisers is working for a company, and the other is starting her own business in a rural area where she couldn't find a mentor. The one working for a company has support to show them the ropes, which is basically a necessity. The other starting her own company and is working on putting together sample reports, but mentioned multiple times the need for ongoing mentorship. If you have the aptitude, PAREA probably teaches the fundamentals well enough but does not prepare the appraiser for the real world. IMO this gives credence to the argument that this shouldn't account for 100% of QE. PAREA grads should expect to work at least a couple of years under someone who can show them the ropes.

2. For the gentleman who is working for a company, he's had a difficult time getting lenders to accept his work. This is a problem for all newly licensed appraisers, especially in this market. He has an arrangement with one AMC where his work will be reviewed by someone within his company for a period of time before he's given a full go-ahead.

3. KD mentioned that TAF gave AI a $500k grant for PAREA, but the AI had invested at least $2m of their own funds. The typical PAREA tuition is around $4k, and it took both of these students around 12 months to complete the QE and the program. It sounds like the student-to-teacher ratio is around 30:1, which implies $120,000 per full-time educator. Presumably, the educators are getting some fraction of this.

4. AI Prez said they have 130 actively working through the program, 275 who have finished QE and are waiting to get in, and around 2000 interested but who have not taken QE. They had to put a time limit on the student's participation in the program because many were not progressing, which obviously comes at a cost to the educator. Last I heard 6 have graduated, but maybe there's more since then.

My comments from another thread:

Meanwhile, TAF and the Appraisal Institute proudly showcased their first two grads today. And in the words of the President and CEO of The Appraisal Foundation "...they are blazing the trail for the thousands that will come behind them..." Thousands? Really, from what I understand around 10 have completed PAREA, how will the AI scale that up? Anyway, this program is supposed to benefit minorities, but here we are with two non-minorities and the typical profile of a second/third/fourth career individual looking for a gig. The tone deafness of TAF and the AI knows no bounds. This is just a big money grab for those who are involved.

What I'm about to write is no shade on the two graduates, I really wish them luck. But shame on the AI and TAF for parading inexperienced noobs around. When asked by the Consumer Advocate on the board of trustees what they learned about appraisal bias (around the 42:20 mark) and if they felt PAREA prepared them to mitigate it, Sandy had to give a hint, and they basically talked about not including certain words and blurring people out of photos. Later on, in response to a question about form/narrative report training, they only completed form reports. And neither had any interactions with their peers in the program. Wow, lambs being led to slaughter. I hope they get competent advice and training before they get into trouble.

And I'll add, both acknowledged their need for mentors to teach them how to complete reports in the REAL WORLD. Imagine that, after millions spent on a failed program the few who pass through admit they have to start at the beginning like every single residential appraiser has: WITH A MENTOR/SUPERVISOR.