MBA Urges Elimination of Barriers to Appraiser Entry

The Mortgage Bankers Association, in a Mar. 31 letter to The Appraisal Foundation, offered recommendations for attracting new appraisers to the real estate finance business and eliminating barriers to their entry.

The Appraiser Qualifications Board is examining potential areas of revision to the Real Property Appraiser Qualification Criteria and asked public comment. The potential revisions come amid volatility in the appraiser industry, which has seen not only an exodus in residential appraisers over the past 10 years, but also a shortage of new blood entering the industry–the average age of an appraiser is currently 58.

“There is no question that the profession is in dire need of change in order to survive into the next generation,” wrote MBA Senior Vice President of Residential Policy and Member Engagement Pete Mills. “A shortage of appraisers is currently felt in many rural and lower population communities, and in the coming years this shortage threatens to spread into new markets and become far more severe in existing markets.”

Mills said for MBA members, a decline in the number of appraisers could result in a decline in appraisal quality, an increase in appraisal-related costs passed on to consumers, and longer turn-times in the loan origination process.

The letter expressed MBA’s belief that certain unnecessary barriers to entry for talented individuals seeking to become residential appraisers can be eliminated or significantly reduced without undermining either the quality of the work product or the trust that the public places in its appraisers. It identified immediate opportunities for the Board to consider, including:

–Allowing “alternative experience” to count towards the appraisal experience requirement for the Certified Residential classification;
–Enhancing a college “practicum” curriculum; and
–Conducting a national appraiser dispersion study.

“While ample experience in the industry should properly remain the foundation of certification requirements, the current training/mentoring period is in need of substantial modification,” MBA said. “Because arms-length mentors (i.e. those who are not related to the trainee) are essentially paying to teach their own future competition, the interests of the parties are often in conflict. As a result, either aspiring trainees are unable to find a suitable mentor or the pairing is less beneficial and pedagogical than it could be.”

MBA said the experience requirement should be revised to allow for alternate forms of experience for those who are unable to break into the industry without a special connection. These forms of experience might include completion of the Board’s proposed practicum curriculum on a college campus, work as a property tax assessor, home inspector or experience gained in partial appraisal work assignments.

MBA added that introduction of a robust vocational program at a college, university, trade school or professional organization would also be of great value. “Exposing recent high school graduates to the residential appraisal industry will generate interest among many who had not predetermined to enter it,” MBA said.

MBA also recommended that the Appraisal Foundation conduct a national appraiser dispersion study that would examine which markets are saturated and which are in the most need of new appraisers.

“Such information, if publicized, would be a win for appraisers and consumers alike,” MBA said. “For aspiring appraisers, they will receive a valuable perspective into where they should begin their careers. The markets that currently have the greatest shortage are often the same markets where there are few comparable sales and where the need for talented residential appraising is therefore maximized. By providing a highly demanded service in an underserved market, the consumer also wins. Finally, an efficient distribution of appraisers would reduce the average commute time between work assignments.”