We live in unprecedented times regarding appraiser scrutiny. Fannie Mae and Freddie Mac review appraisals using Collateral Underwriter and Automated Collateral Evaluation. State boards field complaints about appraisals, often when appraised value is below sales contract price. There are obligations to clients and other intended users under the engagement letter and assignment conditions, and questions asked by a lender or AMC, all part of the existing reality of working as a professional appraiser.
And now, the Federal Housing Finance Agency has begun sharing collected appraiser information – including name and license number – for a wide range of purposes, including “for fair lending and fair housing research, investigation, supervision, and enforcement.” Put differently, expect to see more enforcement actions brought under the Fair Housing Act against appraisers, especially as the focus on appraisal bias and its effect of minority borrowers comes into focus.
I ask you, the professional appraiser – is all this risk worth the rewards (as you define them) of doing mortgage lending work? Do you fully comprehend the amount of risk every time you accept and complete an assignment, and how long that risk will hang over you?
For those appraisers who feel strongly that their work is of the highest professional and ethical quality, I’m sure the answer is undoubtedly yes. As I’ve learned over many years, appraisers are passionate about their work and the role they play in the housing finance system.
I would caution that personal conviction and demonstrated professional excellence may not be enough to survive unscathed in this new environment of risk. With so many avenues of exposure to federal or state enforcement activities, lender or GSE blacklisting, or even headline risk, it becomes a herculean task to simultaneously balance these considerations and maintain your objectivity and independence. It’s only human, after all, to consider risk and make decisions that insulate from it – potentially at the cost of true independence and the core tenets of what an appraiser is supposed to represent.
This is usually where an author would put forward some panacea, some cure-all that would lift the weight of professional risk from your shoulders and return the appraisal profession back to one where your opinions were afforded the weight and credibility that came with calling yourself a professional, and where few questions were asked.
There is no such thing, not anymore.
It’s time to accept that calling yourself an appraiser and making much – if not all – of your living working with mortgage finance transactions, will carry enormous risk going forward. Simply telling an acquaintance that you are an appraiser may invite scrutiny not only of your professional skills, but of your personal character. More people than ever are looking at you and your work, finding faults well beyond your control but somehow ascribed to you individually.
The status quo is no longer an option, nor tenable for everyone involved. To try and hold onto what was will only devalue the important voices of appraisers as change comes to this profession.
So, you can choose. You can choose to look at everything bearing down on the appraisal profession today, and decide the risk is not worth the reward. I, nor anyone who is reasonable, would begrudge you for reaching that conclusion.
Or you can choose to accept this moment as a challenge, a call not to defend the profession as it exists but to elevate appraising into its next evolutionary stage, and to do the hard work of embracing and driving change.
Either choice takes clarity and honesty, a willingness to ask hard questions. There is little time remaining to make choices before they are made for you by others who may not feel as passionately about the appraisal profession, and to not choose for yourself cedes control to outside interests.
One choice to start this process is to align yourself with other like-minded professionals who are working toward a brighter future for the profession. Whether through ASA or another professional organization, surrounding yourself with a driven and motivated peer group can only help provide added perspective on the positive ways in which the profession can grow.
Additionally, ASA and others have begun this work toward the future of the appraisal profession. Through webinars covering topics such as unconscious bias, engaging with the PAVE Task Force Process, and remaining a key voice before legislators and regulators, professional organizations are working to positively shape the profession’s future for the better.
So, choose. And if you choose the hard work of change, come ready to do that work, to make the appraisal profession a credit to its role in housing finance, and to challenge yourself and your peers in ways designed to make this profession better.
