Written by Woody Fincham, SRA, AI-RRS, RAA
Once again, we have some great news coming from the appraisal organizations. The American Society of Appraisers, Appraisal Institute American Society of Farm Managers and Rural Appraisers, MBREA|The Association for Valuation Professionals, American Guild of Appraisers, OPEIU, AFL-CIO and RICS signed off on a joint letter sent to the OCC, The Federal Reserve and the FDIC. The organizations made a direct reference to the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) which already addressed this issue less than two years ago where the agencies replied with:
“Based on considerations of safety and soundness and consumer protection, the agencies do not currently believe that a change to the current $250,000 threshold for residential mortgage loans would be appropriate. The agencies will continue to consider possibilities for relieving burden related to appraisals for residential mortgage loans, such as coordination of our rules with the practices of HUD, the GSEs, and other federal entities in the residential real estate market.”
The letter is worth a read and all appraisers should be aware that there has been real effort put forth by the organizations to help protect the importance of having an unbiased party available to vet mortgage transactions through appraisals.
In addition to this, the National Association of Realtors also chimed in with a letter in support of the pragmatic soundness of using professional appraisers. One notable quote from the letter addresses the misconception of appraisal delays (underline emphasis mine):
“The Agencies note that increased cost burden is often the result of delays due to the lack of appraisal availability. NAR’s own research shows that the typical wait time for an appraisal in 2018 was seven days, with 63 percent of REALTORS® reporting wait times to be seven days or less. The question is whether that wait time is burdensome. When asked about ease of obtaining an appraisal, 67 percent of REALTORS® felt it was “easy” or “very easy” to get an appraisal and only one percent noted it being “difficult” or “very difficult.” Given the vast majority of REALTORS® feel getting an appraisal in their area is not a problem, it is hard to imagine that the wait time for an appraisal is resulting in a large number of cost-inducing delays. Based on the average appraisal costs and REALTOR® sentiment regarding appraisal wait time, NAR does not believe that appraisals are creating a cost burden on a national level, but that the problem is likely restricted to specific markets.”
Today has been an interesting one in the world of valuation. Well done to all the organizations that have stood up for the public trust. One can only hope that the agencies will listen to common sense.