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Issues Affecting the Appraisal Community
Jefferson L. Sherman, MAI, AI-GRS 2018 Appraisal Institute Vice President
Ohio Coalition of Appraisal Professionals Summer Seminar
June 19, 2018
• Industry changes • Appraiser population trends • Legislative and regulatory changes • Adaptation
Today’s Highlights
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 2
Industry Changes
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• Digital mortgages • User needs & touch points
Changing Forces
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 4
Appraiser Population Trends
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• Last 5 years: about 2% annual decrease • Primary reasons oRetirements o Fewer new entrants o Economic factors oCompeting technology oGovernment regulation
U.S. Appraiser Population
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• Inaccessibility in some markets • Over-regulation creates problems • Improving attractiveness of profession
Accessibility Issues
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 7
Regulatory & Legislative Changes
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 8
• Paperwork Reduction Act review • Agencies’ final rule oCommercial oResidential oBusiness
Appraisal Threshold Levels
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• Expected but confounding • Increased risk • Evaluations • Significant concerns
CRE Threshold Increase
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 10
“Don’t believe everything you read on the internet.”
Abraham Lincoln
Evaluations
11 Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher.
• Required where appraisals exempt • Interagency Guidelines qualifications requirements • USPAP requirements exceed • Exemption from USPAP
Evaluations
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• Loan purchases and refinances • “Race to the bottom”
GSE Appraisal Waivers
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• FHFA should prevent implementation • Higher risk for first-purchase loans • Economic recovery imperiled
AI’s Response
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• S. 2155: banking regulation relief • Signed into law May 24 • Rollback of Dodd-Frank rules • AI led efforts to revise bill oAllowance vs. exemption oClarifying provisions oRulemaking issues
Federal Legislation
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 15
• H.R. 3221 oHigher Priced Mortgage Loans, USPAP Exemption
• H.R. 3561 oVA Hybrid appraisals
Other Federal Legislation
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 16
• Oklahoma request withdrawn • ASC denied Tennessee request oNo shortage in market oPublic comments show opposition oOnly TriStar affected o Lack of urgency
Temporary Waiver Requests
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 17
Adaptation
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• Staying current • Technology integration • Service industry – talk with your clients • Diversification of skills, services
Adaptation
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 19
• Trend shows need for change • Last update in 1989 • Effect on appraiser population • Appraisers choked by regulation
Modernizing Appraisal Regulatory Structure
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• “Layering effect” of regulation oBackground checks o Supervisor, trainee requirements o License renewal fees oCourse requirements oMandates to purchase rules
Impact of Regulation
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• Modernize appraisal oversight • Improve enforcement • Enhance appraisal quality
Appraisal Reform Vision
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• Appraisal Institute suggestions oMulti-state licensure oNMLS example
Recommendations for Change
Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher. 23
• GAIN NEW SKILLS
• RAISE YOUR GAME
BUILDING OUR VALUE
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electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher.
• “ABSENT QUALITY, WE WILL BE IRRELEVANT”
• Jeff Sherman, OCAP, June 19, 2018.
BUILDING OUR VALUE
25 Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher.
• My challenge to you is to CHASE EXCELLENCE. By doing so, you accomplish two things: 1. You raise the value of your services, and 2. You raise the value and sustainability of OUR profession.
If you do these things, YOU WILL SUCCEED AND SO WILL WE!!!!
BUILDING OUR VALUE (cont.)
26 Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher.
Issues Affecting the Appraisal Community
Jefferson L. Sherman, MAI, AI-GRS 2018 Appraisal Institute Vice President
Ohio Coalition of Appraisal Professionals Summer Seminar
June 19, 2018
• Newest Book: Valuation by Comparison, Forms & USPAP referenced throughout the book. Numerous case studies. Focuses Sales Comparison Approach when data is limited. Discusses alternative methods and logic including: current listings, pending sales, expired listings and historical market activity of subject and the comps. ($40/$50)
APPRAISAL INSTITUTE
28 Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher.
CLASSES:
Introduction to Green Buildings: Principles & Concepts (Oct. 24) and
Case Studies in Appraising Green Residential Buildings (Oct. 25)
Instructor: Sandra Adomatis, SRA
APPRAISAL INSTITUTE - OHIO CHAPTER
29 Copyright ©2018 Appraisal Institute. All rights reserved. Published in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, photocopy, recording or otherwise, without the prior written consent of the publisher.
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