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Congress Wakes Up?
by David Brauner, Publisher
It is not only appraisers who see the folly in a recent decision by the Appraisal Subcomittee (ASC) to waive appraiser certification requirements in North Dakota.
Recently, two members of Congress expressed their concerns in no uncertain terms, which is noteworthy as appraiser-related issues typically go unnoticed, no matter how detrimental they may be to the public trust. Lenders wield a big stick. But given this response, Congress is waking up to appraiser issues. Therefore, this may be the time to express your concerns to your Representatives in Congress about bifurcated appraisals, Fannie Mae Waivers and other moves to dilute and replace appraiser oversight.
The Letter
The September 24 letter from Senator Sherrod Brown (D-OH) and Representative Maxine Waters (D-CA) to the ASC says in part: “Congress has repeatedly recognized the essential role that appraisals play in both safety and soundness and consumer protection. That is why it is so concerning that the ASC, the primary federal organization with oversight over appraisal and appraiser standards, has acted to waive appraiser certification requirements with minimal justification.”
And also from the letter, “It is extremely troubling that the ASC would grant such a waiver, over the objections of the Congressionally-recognized nonprofit seen as the entity best able to establish appraisal and appraiser standards (The Appraisal Foundation), as well as the North Dakota Real Estate Appraiser Qualifications and Ethics Board. Moreover, the waiver that has been granted only provides a waiver of the requirement that an appraisal be performed by a certified or licensed appraiser. The appraisal must still meet Uniform Standard of Professional Appraisal Practice (USPAP) requirements and any other standards established by the regulator. It remains unclear how an individual without the appropriate training will complete an appraisal that meets these standards.”
According to appraiser and educator Richard Hagar, SRA there is no shortage of appraisers. “Numerous states have asked for appraisal waivers and in most of these instances the pressure for the waivers comes from the banking industry, sometimes the very same banks that would like to eliminate the requirement for appraisals (no conflict here!),” Hagar said. “In every state that has asked for these waivers there does not appear to be a shortage of appraisers. From the lenders I’ve talked to they are upset that appraisers are not accepting their appraisal orders that are paying $500 or less. These lenders do not seem to understand that appraisals cost more than they did 10 years ago.” Hagar continued, “It doesn’t appear there is a shortage of appraisers, just a shortage of appraisers willing to work for less than $500 or so per order, which is why some are complaining about ‘an appraiser shortage’.”
Appraisers are encouraged to let their Representatives know that the move toward replacing them poses a serious threat to the public trust. Read the full letter to the ASC here.
OREP/WRE Bifurcated Appraisal Survey
In about one week, the OREP/WRE Nationwide Bifurcated Appraisal Survey has over 1,700 respondents. The results so far indicate that appraisers are wary of their own liability when it comes to bifurcated appraisals, as well a breakdown in quality. Most appraisers also doubt that splitting the process in two will result in a time or cost savings.
Most survey takers also left a comment; here are two: “I have completed two bifurcation appraisal where I did not inspect the subject property and I found inadequate and/or incorrect information supplied to me both times. The fees offered are not sufficient for the time involved to investigate subject data and appropriate market data.” And “This is a shortsighted attempt to change something that isn’t broken. Ultimately, this is about money, not speed.”
Take the OREP/WRE Bifurcated Appraisal Survey here. Survey results and comments will be published in Working RE in the near future.
Now in its 17th year, OREP is a leading provider of E&O insurance and risk management services to appraisers nationwide.
>> Take OREP/Working RE’s Bifurcated Appraisal Survey
About the Author
David Brauner is Senior Broker at OREP, a leading provider of E&O Insurance for home inspectors and other real estate professionals in 50 states (OREP.org). He has provided E&O insurance to home inspectors for over 20 years. Contact him at dbrauner@orep.org or (888) 347-5273. OREP–Organization of Real Estate Professionals Insurance, LLC. Calif. Lic. #0K99465.
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