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Archive for June, 2015

Appraiser Shortage

June 1st, 2015

Fact or Fiction: Is There a Looming Shortage Of Appraisers? Or a Looming Shortage of Appraisals?

Writing in National Mortgage News on May 20th, Kate Berry at first expresses concern that a “persistent shortage of home appraisers” might threaten the business of mortgage lenders.  Later in her report, she writes that “some observers” are suggesting that technological advances “could further reduce the need for appraisers”.

There has been much written about the aging appraiser population and the lack of “newbies” entering the field.  There has also been much said about the myriad automated valuation technologies replacing some appraiser tasks.

Time will tell whether appraisers go the way of the “ice man” or whether the insights provided by professional appraisers will be recognized and sought after.  It is our opinion that knowledgeable, professional appraisers who utilize the newest technology to assist in developing their opinions of value will not have their livelihood threatened.  On the other hand, appraisers who do not change and adapt will likely be supplanted by professional appraisers who continue to strive for excellence on a daily basis.

A link to the National Mortgage News article (along with an Appraisal Institute graph showing the declining number of appraisers over the past eight years) is found here: Appraiser Shortage Could Gum Up The Works at Mortgage Lenders

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Reader Comments From Our Last Newsletter

Kansas Appraiser Thomas C. Linsin writes: "I’ve decided to give you a shout-out regarding the AppraisalPort poll and the conclusions that were drawn from those results.  Frankly, all four of your conclusions drawn from the poll missed the target dramatically.  Another poll would likely show that the reason most appraisers are working long hours is that our clients are demanding it due to the very high loan volume.  The high demand for appraisals is nationwide.  Most appraisers have more work than we can handle and we are doing our best to meet those demands by working long hours". 

California appraiser Frank Palatella of Palatella & Associates comments: “I read your take on AppraisalPort’s recent poll question regarding hours worked with great interest. However, from my point of view, you left an explanation off your list: the onerous requirements of Dodd-Frank, coupled with a general decrease in fees paid by miserly AMC’s, requires appraisers to work longer to earn a reasonable percentage of their income compared to ten years ago. While I am far more efficient than I was back then, "back- end" revisions, ridiculous scrutiny and armchair quarterbacking from out-of-area reviewers, the use of AVM’s as a backstop, etc. have contributed to "scope creep", there’s no denying it. Appraisals simply take a lot longer today than they did a decade ago. 
I’m in the last group; 13+ hours a day on average (nights, weekends, you name it). But my average fee has declined compared to prior years, and this is entirely due to the prevalence of AMC’s in the industry now versus the period prior to the advent of HVCC and its red-headed stepchild Dodd-Frank. In a world where things generally cost more over time, appraisal fees have gone the other way. For self-employed people, that translates into longer hours, or a substantial decline in gross income.
Of course, in the next few years, as older appraisers retire, the fee issue will cure itself. There is a severe and prolonged shortage of qualified appraisers coming, and this situation was entirely manufactured by the advent of AMC’s. While raising the bar in terms of entry to this profession, we’ve see fees in most areas decrease, and this is a recipe for disaster. What college graduate is going to be crazy enough to enter a profession that requires two years of indentured servitude, only to find lousy pay once they are certified? The short answer is very few. As supply dwindles, fees will rise, from necessity, as in any other industry facing a shortage.
So for those of us left standing, at least there’s a silver lining on the horizon. But in the meantime, it’s taking a lot more work to make the same money”.

Kimberly Remsing of Vincent C. Remsing and Associates, Inc., a Pennsylvania appraisal firm, writes: “Clients force appraisers to work long hours due to their strict turn times 24-48 hours for a report to be turned in after inspection completed or you will not continue to receive work.  We do not want to work these long hours but are forced to with low fees and these turn times”.

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Recent Real Estate Reports

Last week, the National Association of Realtors (NAR) released their quarterly commercial real estate forecast.  They predicted a continuing overall decline in vacancy rates and increase in rental rates with the exception of a very slight increase in the multifamily vacancy rate due to the large number of new apartment units coming to market.  Some of the findings:

~The national office vacancy rate is projected to decline from 15.6% in the 2nd Quarter of 2015 to 15.5% in the 2nd Quarter of 2016; rents are expected to increase by 3.4% this year and 3.7% in 2016.

~The national industrial vacancy rate will drop from 8.4% in the 2nd Quarter this year to 8.1% in the same quarter next year; rents will increase by 3.1% in both 2015 and 2016.

~The national retail vacancy rate will fall from the current 9.6% to 9.2% during the next year; rents will increase 2.6% this year and 3.1% in 2016.

A link to the entire NAR report is found here: Modest Growth Expectred in Commercial Real Estate Markets

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From The Farmer’s Almanac: Moon Facts and Folklore

~A growing Moon and a flowing tide are lucky times to marry.
~Days following both the new and full Moons are most likely to be rainy or stormy.
~Crabbing, shrimping, and clamming are best when the Moon is full.

Today is the first full moon in June.  The Farmer’s Almanac tells us that the month of June’s “full Moon’s name” is the “Full Strawberry Moon”.  It got this name because the Algonquin tribes knew it as a signal to gather ripening fruit. 

We’ll have to work on Appraiser “Moon Names” as we’ll have more free time with interest rates projected to rise and appraiser’s workloads expected to diminish (at least until the expected appraiser shortage materializes later this decade).  In the meantime, perhaps when USPAP is revised a restricted report might be entitled a limited “Lemon” report and any appraisal other than that a full “Strawberry” report? And reports provided through AMCs a “Raspberry”?  Just sayin’…

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Just Released! Appraiser Help’s 2015 Directory of AMCs and National Appraisal Companies is Now Available!

To help appraisers evaluate how AMCs will work for their appraisal practices, we have compiled this expanded directory of over 275 AMCs and National Appraisal Companies, listing complete, contact information and other details for each company.

If you’re looking to maintain or expand your mortgage appraisal practice, our Directory of Appraisal Management and National Appraisal Companies is a great place to start. Order it today for $79.99 and download it immediately!

Please visit our website now to make your purchase securely or contact us at (877) 434-2825 for more information on this comprehensive directory!

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Rates & Dates

Freddie Mac and the Mortgage Brokers Association (MBA) reported small increases in mortgage interest rates last week while HSH Market Trends found little movement. 

In their survey on May 28th, Freddie Mac reported that 30-year fixed-rate mortgages rose from 3.84% to 3.87%. They also noted that last year at this time the 30-year rate was at 4.12%. Freddie Mac’s deputy chief economist Len Kiefer is quoted in the release as saying:

“Mortgage rates rose to the highest level in 2015 following positive housing market data. New home sales surged 6.8 percent to an annual pace of 517,000 units in April. Although existing home sales slipped 3.3 percent to a seasonally-adjusted pace of 5.04 million units, sales are up 6.1 percent on a year-over-year basis. The S&P/Case-Shiller 20-city home price index also posted a solid gain of 5 percent over the 12-months ending in March 2015."

The Mortgage Bankers Association (MBA) reported on May 27th (for the week ending May 22nd) that 30-year rates with conforming loan balances ($417,500 or less) rose to 4.07% from 4.04%.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased from 4.04 to 4.06% while rates for FHA backed mortgages also moved upward, from 3.80% to 3.83%. 

Mortgage applications fell 1.6% from the previous week with the share of refinance applications as a percentage of all applications falling to 51% from 52% last week.  This was the lowest percentage for refinance applications in one year.

On May 29th, Market Trends reported that 30-year mortgage rates declined to 3.97% from 3.98% the previous week while rates for FHA-backed mortgages remained at 3.73% for the second straight week.

HSH had these insights in their news release regarding conditions in the real estate market and the future movement of interest rates:

“Although sales of existing homes didn’t seem to benefit all that much, what with tight levels of inventory and amid rising prices, the downtrend in mortgage rates in April appears to have helped sales of new homes to improve. The Census Bureau reported that sales of newly-built homes rose by 6.8 percent for the month, climbing to a 517,000 annualized rate of sale. Inventory levels here are somewhat more elastic; that is, more new homes can be built to meet demand. According to the report, there is about 4.8 months of built and ready-to-sell stock available; this is thinner than optimal at about 205,000 units. Builders continue to express caution about adding to stock even as the housing market continues on an overall path of slow improvement. The 5.3 percent month-over-month rise in prices may see a little more enthusiasm for that, though — it was the first increase in prices seen since last November…

Long-term interest rates (and mortgage rates) are of course forward-looking by their nature. Soft economic patches aside, interest rates have nudged higher this spring not because the current climate is much to write home about, but rather that the prospects for more widespread growth (here and abroad, especially in the Eurozone) are improving. That said, it seems as though it will be more of a slowly rising tide lifting all boats for this go-round, rather than the U.S. pulling hard to help keep afloat many other economies.

Also, no panic here and certainly less over there seems to have softened the conditions which produced recent lows for rates, which are likely to be sticky around these levels, give or take a little. If everything goes according to expectations (a process not likely, or at least not smoothly) we may be soon be at or near the start of a long and gradual upturn for rates. Before then, we will need to take the first step, probably in September, and see where we’ll go from there.”

Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac

Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

Additional information from HSH can be found by going to: HSH.Com

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Appraiser Help has Released its 2015 Directory of AMC’s and National Appraisal Companies. Click the link above to learn more and to download your copy today!

Ask Angie

Angie is shaking her head over the results from her last contest: not a single winner, only the second time in over five years that she received no correct answers.  She’s not sure why, maybe appraisers do not like B.B. King? Maybe he’s before their time?  

Anyway, B.B. King was the correct answer, having authored all three of the quotes in our last newsletter:

"The Blues? It’s the mother of American music. That’s what is is – the source”; “The beautiful thing about education is that no one can take it away from you”; and "Everybody wants to go to Heaven, but no one wants to die to get there”.

Today’s Questions:

1. Who said: "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies”.

a) Chico Marx
b) Karl Marx
c) Groucho Marx
d) None of the above

2. Who said: “The secret of life is honesty and fair dealing.  If you can fake that, you’ve got it made”.

a) Chico Marx
b) Karl Marx
c) Groucho Marx
d) None of the above

3. Who said: "Outside of a dog, a book is man’s best friend.  Inside of a dog it’s too dark to read”.

a) Chico Marx
b) Karl Marx
c) Groucho Marx
d) None of the above

The first person to respond with the correct answers wins a choice of one of the following:

One Free Regular Listing on

A Free Copy of the 2015 Directory of Appraisal Management Companies (Available to Members of and FREE!)


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Tell us what you think!

We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: with your thoughts!

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We really hope you find our newsletter to be informative!  If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue.  If you want to look back at past issues you can see our archive at


Bill Collins, Appraiser Help Inc.

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