25 years full of memories, anecdotes, some bizarre things and also a prize

25 years full of memories, anecdotes, some bizarre things and also a prize

To this day, HypZert identification numbers are sometimes worn like badges. The lower the number, the prouder the owner. So, it is hardly surprising that our Ident number 2/96 did not miss the opportunity to write a wonderful story about his HypZert life.

Rudolf Baumgartner, a HypZert valuer from the very beginning, takes us on his journey through 25 years with HypZert:

1996 to 2021 - 25 years of HypZert
Memories from the first moment until today

It is now a quarter of a century - 25 years of rapid global developments - since the beginnings of HypZert. As one of the first certified valuers, I can't say that it seems like yesterday to me, but the memories are definitely still very present.  

At that time, there were a lot of mortgage banks in Germany; Hypobank and Vereinsbank alone each had 3 to 4 mortgage lending subsidiaries. But although I had been working at Münchener Hypothekenbank eG since 1980 and was head of the valuation department, I hardly knew my colleagues in Munich, let alone those from other regions. Contact was not necessarily desired by the board of directors. Because if some financing did not end up on their own books, it was certainly the fault of their own appraisers who were far too cautious in their property valuations. There were no uniform standards for determining the mortgage lending value - each institution worked with its own valuation guidelines approved by BAKred (former German financial supervisory authority).

Start of a quality initiative

At the end of 1994, however, the VDH (Association of Mortgage Banks) started to think about launching a quality campaign for bank valuations. However, this was done for entirely self-serving reasons by the mortgage bank board members. They wanted to make it clear to the international rating agencies that Germany has a highly qualified expert system for assessing real estate collateral. This was intended to document the high security of the Pfandbriefe issued and thus excellently secure and expand their sales in Europe and beyond.

Regardless of the underlying motivation, the valuation practice received the appropriate attention. In the spring of 1996, the VDH member institutes decided to establish a "Certification Body for Real Estate Valuers for Mortgage Lending Values". A "Valuation Committee" was also installed and this was immediately charged with implementing the decision. Mr. Reif from the VDH then visited the heads of the valuation departments to explain the intention of this project and to involve them in the further procedure. Quite a few - myself not excluded - were initially sceptical about the success of these "visionary" ideas. It sometimes took a lot of convincing to get everyone on board - which eventually worked out. 

One week of confinement for the foundation stone

The approximately 20 heads of the valuation departments then went into closed session for a week at Schloss Gymnich to lay down the philosophy of the mortgage lending value and the methodology of the determination of the mortgage lending value, to draft the basics of the training and the first approaches of the future study letters and to deal with the professional principles of future appraisers. This week brought an intensive personal getting to know and appreciation for each other and the realisation that we were all dealing with the same topics and problems. The "concentrated" knowledge and expertise of all participants facilitated the good results. Likewise, a great cohesion developed within this core group, which also became a factor for the extremely positive development of HypZert beyond this time.  

The very first exam

Then the moment of truth came for us too - like all the more than 2,000 participants after that, we had to take the certification exam with valuation report, plausibility check and question section. It was certainly not to be expected that one of us would fail, but the respect was undeniable even among the "mature and seasoned" colleagues of the big institutes. After the two assessments in the morning, we talked about the tasks over lunch and several times we heard: "Oh, I miscalculated the AfA", "Crap, the rent default risk is too low" and also the word "Sh..." was often heard. After the written part was passed, the oral exam was waiting, and this was also quite demanding; even the very first certification was by no means "given" to us for free.
 
By the way, it was no different for me later during the recertifications. Certainly equipped with the necessary knowledge, I was nevertheless somehow nervous and had stage fright, tried to brush up on all the subject areas and was always worried that I had forgotten something. Perhaps it's a small consolation that the senior staff were no different from any other examinee. But this respect for the examination is also justified, because the certificate is an absolute seal of quality and recognises the broad professional knowledge of the holder.   

In fact, all 21 "original" valuers passed the examination in autumn 1996. To my knowledge, this made it the only group so far in the past 25 years with a 100% quota. The first "highlight" in the history of HypZert was the presentation of the certificates on 23 January 1997. My certification was the proud number 002, even if only because of the ABC. Stylishly, the ceremony took place in a great setting at the Godesburg in Bonn. One of the newcomers was the young managing director of HypZert, Mr Reiner Lux, one of the main fathers of the success story that continues to this day.  

Starting from this core group, the idea of HypZert spread rapidly.

Initially quite modestly with the second level, more and more valuers were gradually certified. At Münchener Hypothekenbank and later at M-Wert GmbH, I always emphasised the importance of training and certification by HypZert for my employees. The number of certified valuers increased rapidly. Soon the 100th, then 500th and soon 1,000th person could receive their certificate.  

For all German banking groups, the HypZert standard became the benchmark for valuers for financing purposes. The work of the appraisers overall was increased in significance. The Valuation Committee of the VDH developed into a respected expert body for all questions concerning the determination of the mortgage lending value and was also the point of contact for the drafting of the Regulation on the Determination of the Mortgage Lending Value, the BelWertV. Excellent work was also done in the other committees and working groups and I fondly remember the time as chairman of the working group "Methodology".

Passing on this methodology around the determination of the mortgage lending value was a special concern of mine from the very beginning. 

Wolfgang Crimmann and I held the first training seminars as early as 1997. Today it is no longer imaginable that we tried to impart our knowledge with slides and an overhead projector. Over time, the requirements for training and examinations became more and more professional and extensive. To this day, I am involved in the academies with the core module "Mortgage Lending Value" and the final exam preparation. At every event I feel a sense of anticipation in exchanging ideas with the participants. Many of today's HypZert valuers - roughly estimated at more than 2/3 of the over 2,000 certified - attended one of my seminars at least once. So it was also one of my greatest and best days when I was awarded the "HypZert Certification & Valuation Award" at the HypZert Annual Convention 2014 in Frankfurt and many alumni celebrated with me.

HypZert Annual Convention - a professional "must"

Over the years, the HypZert Annual Conventions have developed into a professional "must" of the scene. Not only the extensive further training opportunities, but also the "networking" and the reunion with former fellow sufferers, training or work colleagues on the evening before would probably not be missed by anyone. Personally, I have not yet missed a single Annual Convention and am already looking forward to when this event will finally be doable again. Those who work should also celebrate. And so some of these events remain particularly memorable. Apart from the meeting in the AllianzArena, the trip on the "MS Rheinenergie" with the great Varieté programme on the occasion of the 10th anniversary is one of the unforgettable experiences. Even a lady seal could give you a wet smack then and there.

The "eye" of the bank

As the "eye" of the bank - as far as real estate financing is concerned - we have a great but responsible job. It is challenging, requires expertise and always brings new interesting aspects. You inspect a wide variety of properties and meet interesting people. The tour of the old New York Times building was unforgettable for me personally. The old printing presses were still standing in the basement and the original editions with the headlines of the attack on Pearl Harbour in 1941 or the first moon landing in 1969 were hanging on the walls. This touch of history gave me goose bumps.

Since I retired after 35 years of work, the day-to-day business has become quieter and there is more time for hobbies like travelling or golfing (when it is possible to do this again). But I continue to be involved in the academies around training and thus still remain connected to HypZert.

I would like to wish HypZert all the best for its milestone birthday and a successful future. Given the abundance of tasks and the dedicated team around Mr Lux and Ms Reiß, there are no doubts about this.

Thank you!

What a review! We thank Rudolf Baumgartner dearly for this unique insight into our own history!
If early retirement should become too boring, the job as HypZert chronicler is reserved for you in any case.