I have delayed my usual beginning of the year prognostication for a number of reasons. I spend a lot of time speaking to individual appraisers as well as clients of appraisers -- both lenders and AMCs. There are indeed some common threads and of course there are the looming regulatory hairballs that affect us all. I also wanted to review the responses to the Appraisal Buzz National Appraiser Survey to which, by the way, it isn't too late to respond. We will be publishing the answers shortly but you can still offer your opinions if you click HERE and respond now.
It is imperative that appraisers understand the regulatory space. Understanding the minutia of lender and AMC rules with which they must comply is not a must. But to the extent these rules have a trickle down effect on appraisers, a general understanding of the regulatory landscape is important. Third Party Oversight has some new rules and a lot of other rules that have been around for years have largely not been enforced. That is changing. The effect is that lenders will be imposing more stringent oversight of their AMC relationships. That will impact how AMCs manage their fee panels.
No one knows better than I the resistance to change from appraisers. As a result of a multitude of regulations and guidance, appraisers will be vetted like no other period in history. Don't be alarmed. You can protest until you are blue in the face but the bottom line is if you have clients calling you and merely asking you for a fee and turn times "run, Forest, run". It will be those folks who are the dinosaurs. They simply are not current with the new world order. Lenders, and their agents must not only vet their appraisers but they must also constantly monitor them. No more "one and done". So just because you may have been doing business with a particular client for years does not get you a free pass.
To bring lenders and AMCs up to speed on Third Party Oversight we are beginning a series of compliance courses. The first this year will be on April 16 in New Orleans. Click HERE to register as space is limited. We sold out this event when offered in December of last year.
Business volume is way off and will continue to be. Get used to the new normal. Interest rates have nowhere to go but up. No one will refinance out of a sub 4% mortgage. The only glimmer of opportunity will come from the HELOC space. I spoke with a lender yesterday who is frustrated with all of the different flavors of desktop products. These new products are good news and bad news.
Let's start with the good news. These products are being more and more sought after as a replacement to BPOs. These products will replace the void of the low volume coming from the first mortgage world. I love the entrepreneurial spirit and passion for the profession which is the spark that has ignited the development of these emerging products. It is always a good thing when valuation professionals get the focus they deserve.
Now for the bad news. Lenders do want to use appraisers rather than real estate agents but what they don't want is a non standard form and process. I cringe a bit, frankly a lot, when lenders tell me they just wish the GSEs would develop a standard form. Because the 1004 is so outstanding? No because it is a standard. Standards are good for you too. I've seen some alternative products that have directions and a scope of work that would take me an hour to decipher and might require a call an attorney.
But please don't reject the notion of performing appraisals with alternative formats. I know I am tired of hearing the knee jerk reaction that " I can't do that per USPAP." I am not suggesting that all of these products allow you to remain compliant. We are having a webinar on the topic on Wednesday February 26th at 2PM EST. If you would like to learn more there might be tremendous opportunities. Just know what you are doing. If you would like to register you can do so by clicking HERE.
While overall volume of appraisal will almost certainly be down this year there is always opportunity to shine. If you find yourself a bit slow this is the optimal time to invest time in your professional development. With regulatory pressures and corresponding fees AMCs will be drastically reducing their fee panels. They used to brag about their bloated panels. Now a panel of 3000 to 5000 appraisers will likely serve a national AMC just fine. That means you have to figure out how to be the best appraiser in your market. Expand your knowledge base. Build a better website. Learn to network, not just with clients but your peers.
If you want to learn about how to expand your professional skills please consider joining us at Valuation Expo. This upcoming year will be the 15th anniversary. We will be back at the Flamingo in Las Vegas on June 23rd-June 25th. It is the best place I know of to meet prospective new clients and LEARN, NETWORK AND PROSPER. If you would like to take advantage of some of our early bird pricing options you can do so by clicking HERE and registering now!
Have any comments or would you like to submit content of your own? Email firstname.lastname@example.org.