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