As mortgage rates trend up in Colorado, the number of appraisers who choose not to renew their licenses is increasing [RISMedia]. As mortgage rates trended down over the past several years, the number of refinance applications increased, drawing in new appraisers. It follows that when rates rise, appraisers leave the business. This is fairly representative of the remainder of the country.

A common mix of business for a typical appraiser has been 70% refinance and 30% purchases over the past several years, especially those who specialize in work with mortgage brokers. Historically, the home purchase index has not been as volatile as refinance.

As mortgage rates trend up (assuming this will continue) then the amount of refinance business available usually contracts proportionally. Two things will happen:

  • Pressure on appraisers to “hit” the number will increase
  • Appraisers will leave the profession

Historically, this is not a unique phenomenon. What makes this pattern troublesome is the number of appraisers that have succumbed to lending pressure has surged as the business has changed. More focus on turn times and overstating values has made the remaining appraisers particularly vulnerable to being even more morally flexible.

A telling quote from the article:

The pressure to appraise in Colorado is terrible,” Shannon said. “I don’t think the normal person is threatened with losing work if they don’t do something unethical.”

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One Response to “Appraiser License Renewals Trend With Mortgage Rates”

  1. Patricia Campbell says:

    Ture. In the 1990’s after the market fell appraisers fled the business in droves. To stay in the business I worked as a fee appraiser for three fims simultaneously in five boroughs. Keeping track of who wanted what in terms of comments and adjustments was a numerical nightmare not to mention the traveling time and diversity of each meighborhood market. Funny story – one day I was in all five boroughs, from 9am to 6pm, when I arrived at the Verranzano Narrows Bridge I had to ask the token booth attendant what bridge Ii was on to pay the toll. He looked at me and said ” lady you better head on home”!