State efforts to license and certify appraisers is given bad appraisal.

This week was supposed to be the deadline for all real estate appraisers in the State of California to be state certified or licensed. Without such credentials, appraisers were to be banished from virtually all appraisal work in the state.

But the California Office of Real Estate Appraisers has once again postponed that deadline -- this time until June 30 -- because not enough appraisers have taken the time or plunked down the money to get certified.

If the March 1 deadline had been imposed, as planned, the shortage of qualified appraisers would have sent California's already troubled real estate industry into a tizzy, state officials conceded.

The latest delay marks the state's third postponement of the deadline, which was originally set for June 30, 1991. The delays are a sign of problems at the California Office of Real Estate Appraisers, which remains without a director more than a year after its creation.

"I'm not privy as to why Governor Wilson has not appointed a director yet," conceded Loretta Maxwell, administrative officer in charge of the fledgling agency. "He has a lot of other priorities he's trying to deal with right now."

The agency's lack of director and overall understaffing has led to widespread frustration among local appraisers.

"It's almost impossible to call up there," complained on appraiser. "You keep getting a recording, and then they don't return your call for a couple of days, or not at all."

The continuing postponements of the deadline for getting certified or licensed are also taking their toll.

"This is a joke; regulation by the state isn't going to produce any more-credible appraisals," railed Zanville Green, an independent appraiser in Sherman Oaks. "It's just another layer of bureaucracy meant to extract fees from us."

State and federal lawmakers mandated more than a year ago that real estate appraisers must be certified or licensed to prevent the recurrence of negligent and fraudulent property appraisals that contributed to the nation's savings-and-loan debacle.

The Federal Institutions Reform, Recovery and Enforcement Act of 1989 requires all appraisers working on "federally related transactions" to pass a written competency exam, and to meet minimum experience and education requirements. The federal government has set suggested minimum requirements for education and experience. But individual states have the authority to depart from those federal minimums.

The federal deadline for appraisers to be certified or licensed was set for Dec. 31, 1991, but that was bumped to Dec. 31, 1992. California hopes to get its appraisers certified or licensed six months earlier.

Obtaining a state certificate or license is not cheap and can be a "real hassle," local appraisers complained.

A certificate costs $910 to obtain, and a license costs $760. A certificate allows the holder to appraise larger and more-varied types of properties (see box below).

All licenses and certificates are valid for four years from the date of issuance. But appraisers who were conscientious and obtained their licenses or certificates quickly are now watching as the four-year life of their credentials wind down.

"By the time this law becomes effective, I'm only going to have three and a half years left on this damn thing," said Green, who paid $910 for a certificate issued Jan. 7. "There may be a class-action suit," he added.

Maxwell of the Office of Real Estate Appraisers said she sympathizes with the 1,279 appraisers who have been issued California certificates or licenses so far, but no decision has yet been made about granting those appraisers extensions.

"I know that a lot of people feel they are being penalized because no law is in effect yet," she said. "But, although certificates and licenses are not mandatory right now, a lot of lenders are already requiring them."

Maxwell refused to identify a single lender now requiring certificates and licenses. When asked if she thought it was fair to allow the four-year terms to run down without a law being in effect, Maxwell replied, "I would prefer not to give a personal opinion on that."

Besides being too costly, the certificates and licenses are too inconvenient to obtain, local appraisers groused.

Last month, weekend testing centers were finally opened in Glendale and San Diego. But prior to that, Southern California's only testing center was in Riverside. Those wishing to take the exam on weekdays still must drive to Riverside.

"They might as well have opened it in Death Valley," griped one local appraiser.

He added that many of his Los Angeles-area colleagues had put off taking the exam until a more convenient testing center was opened.

Maxwell defended the decision to open the first Southern California testing center in Riverside.

"We chose a location central to our appraiser population, rather than one central to the area's population as a whole," she explained. "We didn't want to put it in downtown L.A., where they'd have to drive through three hours of traffic."

Other issues in dispute involve provisions of the law itself.

Federal and state lawmakers have not yet determined the minimum real estate loan amount that would require a certified or licensed appraiser.

The Federal Reserve has recommended pegging the minimum at $100,000, but other federal agencies have recommended that it be $50,000.

Meanwhile, the California Association of Realtors is pushing to establish a state minimum equal to the state's median home sale price. And independent appraisers want all transactions, regardless of the loan amount, to be appraised by certified practitioners.

"Realtors want a situation where any transaction less than the median home-sale price wouldn't need an (certified or licensed) appraisal, but that's discriminatory," said Brian Barnwell, an independent appraiser in Santa Barbara. "That says small loans are not important. We think each loan deserves an objective, third-person analysis to make sure it is fair."

The California Association of Realtors also is lobbying to get brokerage experience and education courses counted toward satisfying the appraisal requirements. Independent appraisers are insisting only pure appraisal courses and experience be counted.

Meanwhile, only one of the 14 staffers now evaluating appraisers' application forms for the Office of Real Estate Appraisers has any formal training as an appraiser. And that has some independent appraisers upset, as well.

"The people put in charge of evaluating appraisers' qualifications are all just a bunch of bureaucrats brought over from the DMV (Department of Motor Vehicles)," Barnwell charged. "They're not qualified to pass judgement on our experience and education. How they can review and evaluate something they know nothing about is a mystery to us."

Maxwell once again defended her fledgling office.

"We are using specific guidelines set down by the federal government and those developed by the state," she asserted. "We have a good command of the subject and the requirements. We have very well qualified people to evaluate the applications, and I think we are doing a good job."

Maxwell conceded, however, that no one yet has any idea how many appraisers actually live and work in California. "I was told a year ago that California had anywhere from 8,000 to 40,000 appraisers," she said. "About 9,000 have applied so far, but I don't know how many more might be out there."

Specifically, 9,211 applications had been filed with the Office of Real Estate Appraisers as of late last month. Of those, 3,045 have taken the exam, and 1,279 have scored a passing grade and paid the money to get a certificate or license.

California typecasts appraisers by work

The California Office of Real Estate Appraisers has established the following designations for appraisers wishing to work on "federally related" real estate transactions, which includes about 95 percent of all appraisal work in the state.

* Certified General: This is the state's highest designation. It allows the holder to appraise all types of real estate. Appraisers wishing to become a certified general must have completed at least 165 hours of college-level appraisal courses, and have a minimum of 2,000 hours of professional experience.

* Certified Residential: This designation allows the holder to appraise any type of residential property. It requires the same minimum amount of education and experience as required for a certified general designation. But the certified-residential exam is less rigorous than the certified-general exam.

* Licensed: This designation allows the holder to appraise residential properties containing four units or less.

Licensed appraisers can work on "non-complex" residential transactions of up to $1 million, and "complex" transactions of up to $250,000.

Requirements for a license include at least two years of professional experience, a minimum of 75 hours of education and passing an exam that is less rigorous than either of the certificate exams.