The New Appraisal Industry

[George Hatch]

Running 3 trainees and doing personal inspections on all their assignments was never financially viable. Not in 2005 and not in 2025. That's why almost no legit appraisers were doing it.

 

[J Grant]

The occurrence of the fraudulent "did inspect" supervisors was never limited to the sweatshops even though the impacts of those larger operations were a big factor. Probably the majority of the smaller operators were doing the same, as reported by a number of the trainees on this forum during that time period.

The larger point is that the single signers have always been a factor in the fee appraisal business since before either of us started.. My first fee shop way back when was run by an appraiser who did it. I came up thinking that was normal until I later learned otherwise.

As far as I'm concerned, the only difference between a 1990s fee shop paying splits vs an AMC paying splits is the larger scale of operations and the income tax withholding. In both cases the "principal" is the one with the relationship with the lender, not the appraisers who are working for splits.

It was very difficult for trainee appraisers to find a supervisor even before the 3 trainee rule because MOST supervisors went on inspections when they signed did inspect. You are inventing a scenario out of thin air.

I disagree that the only difference between a 1990's fee shop paying a split vs an AMC paying a split. A fee shop offered something in return - training for a trainee, and if a cert appraiser chose to stay with a shop, they often got a much higher split and had access to computers, MLS, or paid software, an assistant to set up appointments, and other appraisers to bounce things off of.

AMCs do not provide a positive benefit to the appraisals and often make doing the work more difficult. The AMC system locks up large swathes of lender work, making it extremely difficult for a solo competent fee appraiser to operate - in the fee shop system, a competent solo appraiser could and did compete well for clients with the fee shops.

 

[J Grant]

Running 3 trainees and doing personal inspections on all their assignments was never financially viable. Not in 2005 and not in 2025. That's why almost no legit appraisers were doing it.

A smaller but decent number did it in 2005, while almost none did it in 2025. The AMC fee predation made it almost impossible.

If the GSEs wanted to allow more trainees to inspect on their own to increase the ranks, they could have easily let that happen, such as the trainee inspect on their own after six months with a supervisor, with the discretion of a supervisor, rather than flood the field with non-appraiser, instantly trained "PDC collectors".

 

[George Hatch]

A smaller but decent number did it in 2005, while almost none did it in 2025. The AMC fee predation made it almost impossible.

If the GSEs wanted to allow more trainees to inspect on their own to increase the ranks, they could have easily let that happen, such as the trainee inspect on their own after six months with a supervisor, with the discretion of a supervisor, rather than flood the field with non-appraiser, instantly trained "PDC collectors".

Not accepting a "did not inspect" countersignature was always a buyer preference. Same with the lenders who decided they would only work with the CRs, not the SLs. Same with their later choice to use these other alternatives like the waivers and hybrids.

Back in the 1990s the designated appraisers were every bit as angry at the lenders' actions when licensing came in. They previously had a significant economic advantage in the market that got decimated when a large percentage of the lenders decided "licensed/certified" was just as useful to them as "designated".

In both of those examples, the actual grievance is with the prevailing buyer preferences. Including their sensitivity to price.

 

[Joe Flacco]

Running 3 trainees and doing personal inspections on all their assignments was never financially viable. Not in 2005 and not in 2025. That's why almost no legit appraisers were doing it.

I think the "did not inspect" thing came about after the financial crisis. It was fine for the supervisor to not inspect and check the "did not inspect" box back then.

 

[Joe Flacco]

The "did not inspect" issue started after the AMC took over and said that trainees can't sign the reports. Then a lot of supervisory appraisers decided to sign the report saying that they did inspect the property when they didn't.

 

[Joe Flacco]

The issue before the financial crisis was unsupervised trainees or not properly supervised trainees. I'm not sure anything has really changed with that.

Also, it seems like most lenders allow trainees to sign the report today with the supervisory appraiser checking the "did-not-inspect" box. It was only a few years when the lenders were not accepting it. I think it was only AMC's that ever had that requirement.

 

[TerryRohrer]

Did not inspect is a choice in the form that hasn’t changed since 2005. Obviously, the concept isn’t new. That everyone, including appraisers, are fine with it and lying about it is simply business is among the many reasons appraisers are being replaced. If appraisers can’t speak out about, I say good riddance.

 

[George Hatch]

The "did not inspect" issue started after the AMC took over and said that trainees can't sign the reports. Then a lot of supervisory appraisers decided to sign the report saying that they did inspect the property when they didn't.

The lenders made that choice. Not the AMCs. Same as what happened when many of the lenders decided they only wanted to engage CRs and excluded the SLs. It didn't cost them anything to require the extra so they did it. If it had been the AMCs discretion they would have leveraged the usage of SLs and the usage of "did not inspect" trainees into even lower fees.

 

[George Hatch]

The issue before the financial crisis was unsupervised trainees or not properly supervised trainees. I'm not sure anything has really changed with that.

Also, it seems like most lenders allow trainees to sign the report today with the supervisory appraiser checking the "did-not-inspect" box. It was only a few years when the lenders were not accepting it. I think it was only AMC's that ever had that requirement.

I disagree. In 2026 I think most lenders still will not accept a "did not inspect" trainee. If they did we'd be adding trainees like crazy again whether there was enough work to support them or not.