The current system with the advent of licensing of appraisers was put into place to ensure public trust in the real estate market after the S&L crisis. The system of licensing of appraisers worked as the percentage of Americans confidant enough to own a house reached an all-time high. After the subprime mortgage crisis, millennial Americans lost faith in the dream of home ownership. Time is healing the scars left by the subprime mortgage crisis with millennials now buying homes. The current system of requiring appraisals with trained and experienced appraisers doing the home inspection is working. The confidence and public trust in home ownership is back. So the system before the advent of Hybrid appraisal was working. I have spoken to many homeowners while doing inspection about hybrid appraisals and appraisal waver loans and how they work. The typical reaction is they can’t believe it. The newly informed homeowner all express concerns with the way the real estate market could be going. This will make the public lose confidence in the market as more and more of the public learn about the new system in place.
Now this leads us to the cost of appraisals and time necessary to complete appraisals. One quick way to bring down the cost of an appraisal is to eliminate the middle man. The middle man also known as the AMC (appraisal management companies) does not produce a single appraisal nor improve the quality of an appraisal but yet can collect hundreds of dollars per appraisal simply for being in the middle between the appraiser and his/her client.
Eliminating the middle man (AMC) should also speed up the appraisal process. The middle man who brings nothing of value to the appraisal process also slows the system down.
Keep the public trust in real estate by requiring appraisals and by requiring appraisers to inspect.