24th April 2016

College Degree Requirement Misguided

by David Brauner, Publisher, http://workingre.com

I know about half of you disagree but the college degree requirement for Certification was a wrong turn for the industry. To its credit the Appraisal Foundation (TAF) is on the right track in trying to find a way out of the corner it has painted the profession into but it doesn’t look like it intends to go far enough in fixing the problem. As we all know by now, veteran appraisers as well as newbies can be licensed without a college degree but not Certified. Because so much of the business today depends on being Certified, not holding that license level can be a very limiting condition indeed: it disqualifies appraisers from most AMC and lender panels and excludes them from working for the FHA. A lack of opportunity has driven many good appraisers from the business and for the first time in a long time, there is a shortage of new appraisers entering the profession. This is not good news.

Without new vitality to innovate the profession, it will wither and die. Lenders will create alternative solutions that combine big data and low-fee “property inspections” for all but the most unique properties to replace appraisers. To the current “shortage” of appraisers you may be shouting “Hallelujah!” while you enjoy some long-overdue increases in your fees. But if you’re really honest with yourself you must agree that a college degree is no predictor of good work or good behavior (there are far too many examples from our profession and others that make that statement sadly ridiculous). Training, testing and time can separate the wheat from the chaff when combined with consistent enforcement. Effective oversight will identify repeat violators and patterns to reveal who won’t or can’t adopt accepted techniques or who refuse to play by the ethical rules. We all agree these types should be expunged from the ranks but a college degree does not guarantee competency or ethical behavior: so what is it about?

 
The college degree requirement seems more like a forced attempt at elevating the status of the profession by closing the club, and that strikes me as elitist. Not everyone has the opportunity, resources or aptitude to attend and/or flourish in college. Some very smart people just don’t learn via traditional education methods. And holding up the education requirements of other professions like attorneys, doctors and CPAs just does not hold water. An accountant is a more apt comparison and while a college degree is recommended, it is not required to become an accountant, nor is it to become an engineer, software developer, airline pilot or journalist for that matter. A recent letter from a reader points out that a degree is not even required to be President of the United States! The requirement is even more dubious when you consider that a degree in any subject passes muster for becoming a Certified Appraiser, no matter how unrelated (think French Literature for instance), while someone with the skills to flourish in this business would be shut out for all intents and purposes without a degree.

The folks at TAF tell WRE that they are looking into alternative paths to Certification for veteran appraisers with “a track record of professional (appraisal) experience.” That’s very good but not good enough. The college degree requirement for new appraisers ought to be replaced by some combination of education, coursework and testing so that a whole new generation of young, smart and tech-savvy entrepreneurs has a chance to contribute to the profession, whether they are cut out for college or not. Many young candidates will be your sons or daughters or grandchildren. Are they all destined to graduate college? Like you, they should be able to enjoy a profession that allows them to be their own boss while making an honest living and a valuable and rewarding contribution to their community. To dig in on this issue and leave the college degree requirement in place for prospective appraisers without any reasonable path to Certification risks the future of the profession and turns away many men and women who could add to its legacy.

 
TAF believes there is no opposition to the college degree requirement among appraisers. Whether you agree or not, you can share your opinion and feedback with Working RE’s new Future of Appraisers Survey. We will publish the results for all to see, whatever you decide.

repost from WorkingRE.com

posted in Appraiser News | Comments Off on College Degree Requirement Misguided

22nd April 2016

Photographer: Andrew Harrer/Bloomberg Lenders Are Getting Choosier When It Comes to Risky Real Estate Deals

Lenders are getting stingier when it comes to funding risky U.S. real estate developments, putting pressure on landlords in need of fresh funding to keep their projects afloat.

Banks are proceeding with caution as the specter of slowing economic growth rattles financial markets and shakes investor confidence in a six-year recovery that’s helped lift property values to records. Lenders are going to be more selective and discriminating as the year progresses, said Mark Myers, the head of the commercial real estate business at Wells Fargo & Co., the largest U.S. commercial-property lender.

“We’re getting late in the cycle,” Myers said in a phone interview. “If the economy continues to grow ever so slowly, demand for commercial real estate will continue to grow ever so slowly. To the extent that the economic climate goes in the wrong direction, it’s going to have an impact on demand for commercial real estate.” …continue reading the rest of this post: Photographer: Andrew Harrer/Bloomberg Lenders Are Getting Choosier When It Comes to Risky Real Estate Deals

posted in Appraiser News | Comments Off on Photographer: Andrew Harrer/Bloomberg Lenders Are Getting Choosier When It Comes to Risky Real Estate Deals

20th April 2016

Appraisers Win $36 Million Class Action

by Isaac Peck, Editor
On January 19, a federal judge in Orange County, CA approved a $36 million settlement between Landsafe Appraisal Services, Inc., a subsidiary of Bank of America (BoA), and 369 current and former appraiser employees. The award amounts to roughly $100,000 per appraiser, before attorney’s fees of 33 percent.

The lawsuit, originally filed in 2013 (See Appraisers Entitled to Overtime, Court Holds), alleges that BoA erroneously applied the “administrative” and “professional” exemptions to in-house staff appraisers and failed to pay them overtime.

A press release issued by employment and civil rights attorney Bryan Swartz, counsel for the plaintiffs, states that “In approving the settlement, at the hearing, the court noted that as a result of the lawsuit, the new owner of Landsafe – CoreLogic – has begun paying all appraisers overtime.”

Ethel Joann Parks of Manteca, California, one of four the named plaintiffs that is to receive an additional $25,000 for her time and effort in pursuing this litigation, says she frequently worked from 6 a.m. to 10 p.m. and decided to step forward because she felt that the bank failed to treat her and other appraisers “as human beings” with “family and personal needs that should be acknowledged.”

Parks says she feels vindicated by this lawsuit and the exceptional relief obtained on behalf of the class. “I hope it will force banks and appraisal management companies throughout the country to reconsider pressuring their staff appraisers to work long hours without paying overtime,” says Parks.

Swartz, lead counsel for the 369 appraiser class members, says the judgement not only provides meaningful compensation to hundreds of people, but he hopes it will lead to industry change for many thousands more.

One of the keys to success in this case, according to Swartz, was that the lead appraiser plaintiffs in the suit refused to quit. “First and foremost, our clients had the courage to step forward with their claims, and to stick with them for years. Next, we were able to avoid arbitration and stay in court with a thoughtful and fair-minded judge who had both the inclination and the ability to weigh the evidence carefully and make the right decision,” says Swartz.

In terms of the effect that the settlement will have on the appraisal industry, Swartz says he believes that AMCs with staff appraisers have significant exposure if they are not paying their appraisers and reviewers overtime and other required wages of non-exempt employees. “My firm hopes to find appraisers who – despite companies now clearly knowing the risk of liability – are denied appropriate overtime and other premiums, and ensure that they get paid what they are owed,” says Swartz.

“Employers take grave risks by cutting corners, and not fairly compensating their employees in tune with state and federal law. My firm and many others, including my co-counsel, are working to end wage theft in the economy…quickly,” says Schwartz. Click here for the Settlement Order.

The case is Terry P. Boyd et al. v. Bank of America Corp. et al., case number8:13-cv-00561, in the U.S. District Court for the Central District of California.

Bryan Schwartz Law is co-counsel with Schonbrun Desimone, of Los Angeles, in the case. He can be reached at bryan@bryanschwartzlaw.com.

repost from http://WorkingRE.com

posted in Appraiser News | Comments Off on Appraisers Win $36 Million Class Action

15th April 2016

Interest Rate Hikes Could be Closer Than You Think

Federal Reserve Bank of Boston President Eric Rosengren said on Monday said that investors that believe the central bank would only raise rates one time or not at all this year could be wrong.

As the Federal Open Market Committee (FOMC) heads into its third meeting of the year without having fulfilled one of the expected federal funds rate increases, many in the industry are beginning to question if, when, and how many times they will make their move.

Rosengren stated in remarks prepared for a Fed economic and cybersecurity conference in Boston, “financial market expectations of only a very slow removal of monetary policy accommodation could… prove unduly pessimistic” …continue reading the rest of this post: Interest Rate Hikes Could be Closer Than You Think

posted in Appraiser News | Comments Off on Interest Rate Hikes Could be Closer Than You Think

8th April 2016

Credit Suisse to pay $29 million in U.S. regulator’s mortgage case

Credit Suisse Group AG (CSGN.S) has agreed to pay more than $29 million to resolve a U.S. regulator’s claims that it sold toxic mortgage-backed securities to credit unions that later failed, according to court papers filed on Thursday.

The deal, disclosed in a filing in federal court in Manhattan, resolves one of several lawsuits by the National Credit Union Administration against banks over their sale of mortgage-backed securities before the 2008 financial crisis.

The deal boosts to more than $2.5 billion the amount the NCUA has recovered from banks through lawsuits it began filing in 2011, the U.S. regulator said. …continue reading the rest of this post: Credit Suisse to pay $29 million in U.S. regulator’s mortgage case

posted in Appraiser News | Comments Off on Credit Suisse to pay $29 million in U.S. regulator’s mortgage case

6th April 2016

AI Recognizes Robert L. Mesner, MAI, AI-GRS, Region X (South Florida Chapter) and Edward Molinari, SRA, Region VI (Southern New Jersey Chapter) as ‘Volunteer of Distinction’ in April

The Appraisal Institute announced April 6 the recognition of two individuals as a “Volunteer of Distinction” for the month.

The individuals honored are Robert L. Mesner, MAI, AI-GRS, Region X (South Florida Chapter) and Edward Molinari, SRA, Region VI (Southern New Jersey Chapter).

Mesner serves the South Florida Chapter as chair of the Candidate Guidance Committee and as regional representative. He was a participant in the Leadership Development and Advisory Council conference in 2015 and will be again this year. He also served on the national Demonstration Appraisal Report Grading Panel; Experience Screening Panel, and as a facilitator for the Capstone Demonstration Appraisal Program. He is an advisor to four AI Candidates for Designation. Mesner joined a predecessor organization of the Appraisal Institute in 1975, and received his MAI and AI-GRS designations in 2014. …continue reading the rest of this post: AI Recognizes Robert L. Mesner, MAI, AI-GRS, Region X (South Florida Chapter) and Edward Molinari, SRA, Region VI (Southern New Jersey Chapter) as ‘Volunteer of Distinction’ in April

posted in Appraiser News | Comments Off on AI Recognizes Robert L. Mesner, MAI, AI-GRS, Region X (South Florida Chapter) and Edward Molinari, SRA, Region VI (Southern New Jersey Chapter) as ‘Volunteer of Distinction’ in April

6th April 2016

Lender Capital Is Pouring into Affordable Housing

Affordable housing developers often run a daunting gauntlet when it comes to cobbling together different financing sources to move projects forward. But the job of accessing capitalhas gotten a lot easier lately as lenders and agencies alike step up their focus on the sector. It is an “absolutely awesome” time to be a borrower on the affordable housing side, says Frank Lutz, a senior vice president at Berkadia Commercial Mortgage. Banks are incredibly aggressive and both Fannie Mae and Freddie Mac have increased their lending to affordable housing projects, he adds. …continue reading the rest of this post: Lender Capital Is Pouring into Affordable Housing

posted in Appraiser News | Comments Off on Lender Capital Is Pouring into Affordable Housing

20th March 2016

CFPB Director: Mortgage Credit is “Still Too Tight, In My View”

CFPB Director: Mortgage Credit is “Still Too Tight, In My View”

frozen-credit

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray called attention to the mortgage industry, particularly lenders, in a speech on Wednesday, where he highlighted some of the progress and pitfalls that the housing market faces.

An Urban Institute report recently confirmed Cordray’s remarks by finding that between 2009 and 2014, 5.2 million borrowers with less-than-pristine credit were unable to get a mortgage loan due to tight lending.

The data showed that between 2009 and 2013, 4 million loans could have been originated if credit standards were like 2001’s levels. On top of this total, an additional 1.2 million borrowers were unable to get a mortgage loan.

“A tight credit box means that fewer families will become homeowners at an opportune point in the housing market cycle, depriving them of a critical wealth-building opportunity,” Urban Institute said. “It slows the housing market recovery by limiting the pool of potential borrowers. Ultimately, excessively tight credit hinders the economy, as it slows all the associated economic activity that comes with home buying, such as furniture purchases, landscaping, and renovations.”

In his speech, Cordray stated that the millennial generation is beginning to welcome homeownership despite the stereotype surrounding this generation, but as they are facing with the issue of tightening credit.

“Credit is still too tight, at least in my view, but we can now look in the rear-view mirror and see that some of the undue fears people had about legal liability under the QM rule, or market paralysis due to streamlining the mortgage disclosure forms, can be put in healthier perspective,” Cordray explained. “There is ample opportunity in the mortgage market as it continues to heal, and you should be doing what you do best: serving your customers through great deals and great customer service. Homeownership still remains the most effective engine of wealth accumulation for the American middle class, and you are the ones who are making that happen and rebuilding a key marketplace that failed this country so brutally less than a decade ago.”

Despite the bleak credit picture, mortgage lending practices have improved since the financial crisis, Cordray said in his speech.

“The market crash itself led to many changes, with bad actors and bad practices no longer feasible in a marketplace that had all-too-belatedly exposed the risks inherent in irresponsible and often predatory lending. Indeed, if anything, the market meltdown produced an overreaction, marked by very tight credit and historically low levels of consumer demand and available supply,” he said. “For those of us engaged in the important work of protecting consumers, these developments posed a very tricky task in implementing reforms. We were well aware of the concerns many had raised that the cost of protecting consumers would constrict the availability of credit and even drive many financial service providers out of business altogether.”

About Author: Xhevrije West

Vri 2
Xhevrije West is a talented writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.

posted in Appraiser News | Comments Off on CFPB Director: Mortgage Credit is “Still Too Tight, In My View”

16th March 2016

Wash. AMC Fails, Leaving Appraisers Unpaid

Wash. AMC Fails, Leaving Appraisers Unpaid

by Isaac Peck, Editor, WorkingRE.com

When an Appraisal Management Company (AMC) fails it is usually appraisers who are left holding the bag. Many appraisers are now reporting that the William Craig Company, Inc. (WCCI), based in Washington (Wash.), is closing its doors with up to $250,000 in unpaid fees owed to appraisers.

In early February, Jenna Bell, a Business Relations Specialist at WCCI, sent out an email to many appraisers on its panel indicating that “2015 has been one of the toughest years” for the company and that in order for WCCI to continue operations it “would have to clear out all appraiser vendors to be paid.” The email goes on to propose that, in lieu of payment for unpaid appraiser fees, WCCI would “transfer a portion of WCCI company stock to each appraiser in exchange for the balance WCCI shows you have invoiced as of 2/8/15.” …continue reading the rest of this post: Wash. AMC Fails, Leaving Appraisers Unpaid

posted in Appraiser News | Comments Off on Wash. AMC Fails, Leaving Appraisers Unpaid

11th March 2016

Is the Appraisal Industry Suffering from Barriers of Entry?

Author: Xhevrije West

appraisalThere a seismic change happening in the appraisal industry. Appraisers are diminishing in the housing market and the trend is showing no sign of reversal anytime soonunless something changes.

Scott Pickell, VP and Chief Appraiser atLRES explains to MReport what is happening to appraisers in the mortgage industry, challenges they face, and how the problem can be solved.

MReport: The appraisal industry has seen some dwindling numbers according to recent reports for a number of reasons. Why do you think this industry is struggling to bring in new hires? What challenges do appraisers face in today’s market?

Pickell: This has been an ongoing issue for a couple of years; it’s something that the industry is aware of. The appraisal industry has created significant barriers to entry for new appraisers coming into the industry. It’s a double-edged sword. The industry wanted to become more professionally related. For example, one of the requirements to become an appraiser is a degree, whereas before, appraisers did not need a degree to be licensed and certified as an appraiser. Instead, they needed experience, take a few classes, and take the test to become an appraiser. This is one barrier to entry. Individuals graduating college are looking at potential jobs they can do.  They have to take many units in appraisals, have their degree, and then they must find someone who will train them. This is another barrier to entry. Typically, if these new graduates do not have someone in their family that will train them, they need to find someone who will for almost two years. You can imagine how difficult that can be.

In this industry volumes are very fiscal so if you are lucky to find an individual to train you, when they are busy, they may not want to take the time to do it. When they are really slow, they may not have enough business to actually train you.

Appraising is considered a “family business.” It’s very difficult for someone without those family ties to find someone who will train them. The training period is about 2500 hours. This is after they have gotten their degree and taken the state test. That’s a pretty significant time frame for anybody in any industry. The industry is aging. The average age of appraisers is approaching 60 years, according to one of our studies. This means that there are a lot of appraisers that are well-above 60-years-old.

These are the issues that the appraisal industry is facing. Frankly, it needs to be seriously considered on what can be done to attract new appraisers to the industry.

MReport: How can the industry bolster up their appraiser numbers?

Pickell: I don’t have a crystal ball, but as more and more appraisers retire and get out of the industry, there will be a shortage of appraisers. We are already seeing that right now in the last couple years. We were getting to a point where appraisers were quoting four to six weeks of turnaround time to get one report done for us in certain markets. What will happen is that as the number of appraisers reduces, the ones that remain in business will begin to charge more money, so all of sudden appraising will become a very lucrative profession in the future. That will probably attract new individuals. So money will be a big factor in attracting new appraisers into the industry.

Some clients say that we will not accept an appraisal from a trainee signing the report. Because of that rule, we typically don’t recruit trainee appraisers. Even though the supervisor may sign the report stating that they did inspect the property with the trainee, many lenders will still not accept those reports. Somehow, there needs to be some legislation that requires lenders to accept reports done by trainee appraisers. That’s part of the double-edged sword. If the industry does attract more appraisers, they can’t do appraisals because no one will accept their work. I am not an advocate of more legislation, but because we do have these levels in the industry, there needs to be some rules and regs surrounding trainee’s appraisals with supervisory guidance and approval.

MReport:  Let’s talk about the homeowner vs appraiser opinion gap that Quicken Loans reports on every month. This gap, while it has gotten smaller over 2015, still persists. Homeowners are valuing their homes more than appraisers. Why is this? Will there ever be a point where the gap closes completely? Should the paradigm ever change to where appraisers’ opinions are higher?

Pickell: We think we have had the internet forever but we really haven’t. In the last 10 or 15 years, the internet has probably had the largest impact on a lot of people. With that, companies like Zillow and some others that provide valuations on homes. This is not an appraisal; this is number crunching and regression analysis. There is a big difference between appraised value and that value or price that these websites and companies are giving these homeowners. It creates a false sense of confidence from the homeowner who says, “Zillow says my house is worth $850,000.” Meanwhile, the appraiser says, “No, based on the comps and adjustments I made, your home is worth $825,000.” You have to use the information wisely. Valuation has always been and will probably always be a subjective value because it’s not a science. It’s an art. You have a difference of definitions going on. Appraisers have a specific, defined market value (Fannie Mae Form 1004). These websites are not concerned about that, while for an appraiser, that is what they are analyzing, so therefore, they will exclude comparables in an area where these other websites will include them in their analysis. This can skew the numbers.

MReport: With slow growth expected in the housing market in 2016, how can the appraisal industry prepare, prosper, and increase business?

Pickell: Companies and individuals that have been in this industry for a long time expect this slow growth period. If you are doing origination loans, you are a victim to the interest rates. When interest rates are low, you are very busy, but when interest rates are tweaking up, business can be slow. Appraisers that understand that model, they are diversifying themselves and preparing for this slow period when it’s really busy.  They are preparing by always providing excellent customer service. When it’s busy and appraisers are doing everything they can to keep their heads above water, they still have to provide exceptional customer service to clients. Knowing that the industry will slow down soon, these clients will know who to turn to. This comes by turning around files quickly, providing the highest quality appraisal, and accuracy is always important. The companies that are just now realizing that 2016 will slow, will struggle this year and beyond.

Since 2008, with the advent of HVCC, Dodd-Frank, and other regulations, that’s when the AMC really started to explode. It’s been on an explosion pace since then; there has not been much of a slowdown. If 2016 brings a slowdown, there may be some consolidation in the AMC market, where there will be mergers and acquisitions taking place.

MReport:  What is your outlook for the appraisal sector in 2016 and beyond?

Pickell: This industry is very interest rate sensitive. The appraisal industry is very niche oriented and there are a lot of opportunities for appraisers and AMCs. Diversity is key. It’s all about diversifying your client base, not just focusing on originations. There is still a lot of business among defaults, short sales, and REOs. Finding that business and niches will help companies do very well. I have been in this business for 30 years now and nothing surprises me. When you’re in the middle of a slowdown and all of sudden the work stops coming in, appraisers will start to leave the business and pursue other opportunities. With the aging appraisal industry and the slowdown, it will accelerate people leaving the industry.

From an AMC perspective, compliance is such an important part of this industry. That is something that will probably cause other AMCs to close their doors or consolidate and merge with other companies. The cost of compliance is a barrier of entry for AMCs entering the industry.

Original Article

…continue reading the rest of this post: Is the Appraisal Industry Suffering from Barriers of Entry?

posted in Appraiser News | Comments Off on Is the Appraisal Industry Suffering from Barriers of Entry?



FREE REPORT INCLUDED:
3 Steps to get
More AMC Orders

SECURE & CONFIDENTIAL
Your email will NEVER be rented, traded or sold.
WE GUARANTEE YOUR CONFIDENTIALITY.
We hate spam just as much as you do.


E&O Insurance
Appraisers Club Appraisal Management Companies





Get More Orders - Private Appraisers Club
Get More Estate Work!
Divorce, Bankruptcy,
Date of Death and
Estate orders are
needed in your area!