The Home Valuation Code of Conduct, or HVCC, was forced on the mortgage industry after the Wall Street Ponzi scheme ended in 2007 and the entire market crashed in 2008. Washington Mutual got caught pressuring and coercing their appraisers to inflate appraised values in New York to keep their mortgage volume high as the market began to decline in late 2006 and 2007. This, along with the market crash, caused the government and the Federal Housing Financing Agency – Freddie and Fannie – to change the entire residential appraisal industry with HVCC becoming law in May 2009. The primary change that dramatically affected ethical and seasoned appraisers who had built businesses over many years with bank, loan officer and credit union relationships was the requirement that lenders could no longer call and order appraisals with their approved and favorite appraisers. Lenders since 2009 are forced to order appraisals through appraisal management companies, or AMCs. When an appraisal is ordered, the AMC sends out the request to a panel of appraisals and hopes one of them accepts the assignment. Up until recently, the appraisal fees being paid for by the consumer averaged around $550 for a single-family home in town and $650 for homes in the country within 15 to 20 minutes of the city. The AMC collects the fee from the lender and then pays the appraiser 65 to 75% of the fee. This cut in pay and the loss of the appraiser’s ability to build and maintain relationships with referral partners obviously made the hardworking, ethical, experienced and trusted appraisers mad and frustrated. The number of appraisers in California was more than 20,000 and is now down to fewer than 10,000 with 70% of them older than 50, 40% older than 60 and only 12% younger than 40. Now because of the refi mania and a red-hot purchase market, appraisal fees are occasionally being quoted at $750 to $850 for tract houses in town, and unless the lender agrees to pay a $200 rush fee, the appraisal could take as long as 15 to 30 days to complete the assignment. The education requirements to become an appraiser are tough and even tougher is the requirement to work as a trainee for 2,000 hours under a certified appraiser. It’s hard to find an old appraiser who will mentor a newcomer when the AMC is taking part of the fee. The liability of having an appraiser under them is probably a factor, too. Not a lot of young people followed in their appraiser parent’s footsteps from 2008 to 2013 because so many appraisers – like skilled construction workers, lenders and Realtors – suffered from 2008 to 2013. Freddie and Fannie are using data and artificial intelligence in their system to waive the appraisal requirement on a larger number of loans than ever before, but these property inspection waivers (PIWs) are not enough to solve the appraisal problems today.