The Association of Appraisal Regulatory Officials' Fall Conference was held at the Westin City Center in Washington, D.C. from October 13-16, 2012. AARO is a vitally important stakeholder in the appraisal profession as it brings together regulators from thirty state boards to share information, compare notes and propose remedies for the most pressing issues.
I wanted to take some time and recap some of the events from the conference. That way everyone who couldn't attend would become aware of the changes that may be coming to the industry. It was an action packed weekend with a lot of great discussion and insight. I thought I would share the information that stuck out to me and pass it along to the Appraisal Buzz readers.
The meeting before the meetings started on Friday, October 12 with a discussion of USPAP changes. While the AARO fall meeting did not technically start until Saturday, the Appraisal Standards Board (ASB) and the State Regulatory Advisory Group (SRAG) hosted meetings on Friday and AARO members were invited to attend. Most participants agreed with the proposed changes with the exception of moving to a single report type and what actually constitutes a report. The third draft should be available this fall and added input will help influence the final product.
The Saturday sessions continued with further review of the ASB proposed changes to USPAP. All proposed comments were read aloud and discussed.
Next, the Federal Updates meeting continued with Don Rodgers (NC) moderating for AARO. Jim Park (ASC) addressed the attendees with updates regarding the Federal AMC Regulations due to be released January 21, 2013. At this time, further details regarding the regulations are not available. David Bunton of The Appraisal Foundation (TAF) explained their eLibrary for appraisers and regulators. TAF is working to further enhance their initial offerings and welcomes suggested topics. Carl Schultz (ASB) and Rick Baumgardner (AQB) detailed the Supervisory and Trainee Course Exposure and asked the states to determine course lengths and sought public input to aid their efforts.
The afternoon sessions covered a variety of topics, some of which included the discussion of "Electronic Portals", led by Nikole Avers (TN). The discussion that followed regarded the implementation of Dodd-Frank and how there was no intention to regulate an electronic highway connecting lenders and appraisers. The question of whether or not some of these portals are Appraisal Management Companies (AMCs) will have to be determined by each state's AMC laws.
Sunday's meetings kicked off with a session on Fraud Prevention, moderated by Sherry Bren (SD). Peter Emerzian (FHFA) detailed how they were tracking down fraud tied to Fannie and Freddie. Michael Stolworthy (HUD) discussed the fraudulent activity that lead to the crash and how the volume of cases was growing exponentially.
Bob Keith (OR) led the discussion on The Future of the Appraisal Profession and introduced Rick Baumgardner (AQB). Rick explained the efforts to approve Practicum Courses and the need to ensure the programs meet all AQB requirements. Tony Pistilli, renowned consultant and 2011 Valuation Visionary Award winner, presented the results of a white paper he helped create. Tony outlined the START program (Standards To Assure Responsible Training) in which lenders, appraisal companies and appraisers could more effectively provide opportunities for trainee appraisers to acquire their experience hours. He stressed the need for everyone in the industry to get behind the effort and suggested that states examine their statutes to ensure they are not being impediments to new appraisers entering the profession. Also discussed was the need to streamline the education and experience process for appraisers attending college degree programs, so they could work as other professions can such as, accountants, engineers, and attorneys upon graduation.
The Monday meetings continued with Ami Milne-Allen (VT) hosting a presentation of ASC proposed policies. Some of the most important changes discussed include reciprocity of appraiser's licensure to other states and modification of the state compliance ratings. Also of note was the required background checks for all appraisers. By 1/1/2015, it will be required that all states complete a background check on all new appraisal applicants. It was also suggested that all appraisers seeking renewal also submit to a background check as well. Whether the background check will simply be a state level check or an FBI criminal history check also must be resolved. Some difficulties exist on extending reciprocity in light of Dodd-Frank's requirements and compliance issues will have to be resolved at a later date.
The next General Session was moderated by the esteemed Larry Disney (KY) regarding ASC state grants. Much discussion followed involving the grant approval process and the distribution of funds.
Tuesday's meetings were moderated by Trenton Hogg (WY) and involved discussion with the FBI and several background check companies. The benefits of state, federal and both state and federal level checks were explored conclusively. With the added requirement of background checks looming on the horizon, this will likely be an important topic in the days and months that follow.
Some of the input I received based on the conference here follows. One state regulator told me of the "onslaught of coming changes" and how important it was for each state to be represented and present for each AARO meeting. Certainly any state that didn't attend is at a competitive disadvantage in keeping up to date. Additionally, all attendees had access to and the ability to engage in discussion with the Appraisal Subcommittee, The Appraisal Foundation, the Appraisal Standards Board, the Appraiser Qualifications Board, the Appraisal Practices Board, the Federal Finance Housing Agency, the US Department of Housing and Urban Development and a whole host of education and testing providers. He believes that his state's program is better prepared to protect the public and comply with all federal oversight.
Another attendee noted the "desire for consistency among states with respect to (AMC) regulation and rules." But given the difference of opinions amongst all the state representatives, finding common ground will be difficult to accomplish.
I am looking forward to meeting each and every one of you at Valuation Expo, November 7-10 in San Antonio, Texas. Hope to see you there!