Could this be true? Is Fannie Mae trying to recruit new appraisers to enter the field? It seems as though over the past decade Fannie Mae has been trying to minimize and reduce the role of the appraiser with proposed changes by moving toward appraisal waivers, hybrid appraisals (also known as bifurcated appraisals) and automated valuation models. Well, it now seems that Fannie Mae has launched a new initiative to help recruit professionals into the real estate appraisal industry. In late 2018, Fannie Mae and Altisource combined forces to establish the Appraiser Diversity Pipeline Initiative (ADPI). The reason for this was to encourage career opportunities for new professionals interested in the real estate appraisal field.
One way of raising awareness is the providing of information through community events about how to become an appraiser, different career paths, what appraisers do in the field and real life experiences of an appraiser. These hosted events started in Baltimore and Philadelphia by the local Urban League Entrepreneurship Centers. In August of 2019 the Appraisal Institute (AI) became a part of this movement and will aid in expanding appraisal career workshops and facilitating incentives for new recruits that would include: appraisal software, scholarships for their appraisal education and other resources during the training process.
So, what happened? Why does it seem now as if Fannie Mae wants more appraisers, instead of limiting us? In recent years appraisers have been concerned about our elimination by the hands of an Automated Valuation Model (AVMs), hybrid model appraisals and by increasing the amounts of education and field work needed to become a licensed or certified appraiser?
Well…a few things are happening. The majority of appraisers are over 55 years old and will be retiring in a few years. This will cause a shortage of professionals in the field and the increased work load on the remaining appraisers will cause appraisal turn around times to lengthen: this is an ever growing problem with the current demands for quick turnovers from the lenders and management companies. The other possible explanation for the recent need for more appraisal is that FHFA (Federal Housing Finance Agency) confirmed that it asked Fannie Mae to pause any bifurcated valuation process that doesn’t result in an appraisal. This bifurcated valuation or hybrid appraisal includes an exterior observation of the property, sometimes including an interior inspection by a third-party: this third party inspection could be done by a real estate agent, a property inspector or even another real estate appraiser. The use of this type of bifurcated valuation process for lenders boils down to reducing turn-times for appraisals and lowering fees. Fortunately, the pitfalls of this valuation were recognized and are being reconsidered.
The only practical solution to the lessening amount of appraisers without compromising the relevancy or quality of appraisal reports are to encourage new entrants into the profession to replace the wavering supply of real estate appraisers.
Through the ups and downs and all the talk of our profession being replaced by computer data, technology and automated options the news that the traditional role of an appraiser can not be expendable is a wonderful way to bring in the new year. May we all have a bright and prosperous 2020!