Photo credit: Sheila Sund
The growing appraiser shortage crisis has been addressed by key government agencies, highlighting two alternatives to help appraiser-starved areas and hoping to bring relief to the shortage that’s slowing down the mortgage process.
While the alternative options are aimed at getting more state certified and licensed appraisers in rural areas, the problem is much deeper than the rural appraiser shortage. With the average age of appraisers in their late 50’s, they are not mentoring many trainees because of lender restrictions, educational requirements and there’s no compensation or benefits.
“The AQB and Appraisal Institute are looking for ways to minimize the education requirements or to consider alternatives to the bachelor’s degree requirement to attract more people into the real estate valuations field”, said Paul Prentice, Senior Managing Appraiser at PEMCO Limited. “There are some proposed changes including college credit in specific courses in lieu of the degree requirement. This would appear to be a welcome change if experience levels are met to compensate for less education.”
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency, issued an advisory highlighting two options to help bank holding companies and insured depository institutions facilitate the timely consideration of loan applications.
The agencies were responding to concerns brought up by financial industry representatives during the Economic Growth and Regulatory Paperwork Reduction Act review process. Appraisal timeliness was blamed on the availability of state-certified and licensed appraisers by the representatives.
Valuations for federally related transactions are required to be performed by an individual meeting certain state certification and licensing requirements under Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
The agencies advisory highlights two existing alternatives that may help alleviate the appraiser shortage: temporary waivers and temporary practice permits.
Here are summaries of the two options:
- Temporary waivers
Temporary waivers set aside requirements relating to individuals being certified or licensed under Title XI of FIRREA where certain conditions are met in states or other geographic political subdivisions. These may be granted when it’s determined that a shortage of state-certified or licensed appraisers will lead to major delays in getting an appraisal.
- Temporary practice permits
Temporary practice permits allow appraisers credentialed in one state to provide their valuation services on a temporary basis in another state where there is an appraiser shortage, subject to state law. Reciprocity is also discussed, where certified or licensed appraisers in one state can obtain certification or licensing in another state with a shortage, without having to meet all that state’s certification or licensing standards.
For a full description, check out the advisory note.
HousingWire. Feds take action to solve appraiser shortage