My critical analysis of Freddie Mac’s “appraisal gap” white paper Appraisers, this is not an easy essay to write. It is my critical analysis of an academic study put out by a GSE, which I have read. In September 2021, Freddie Mac’s Modeling, Econometrics, Data Science & Analytics; Single Family Risk Management; and Economic & Housing Research groups released a white paper (Economic & Housing Research Note) named “Racial and Ethnic Valuation Gaps in Home Purchase Appraisals.” The paper uses the term ‘appraisal gaps.’ The paper’s definition of the ‘gap’ is: the percentage difference between minority and White groups in...
A floor plan is supposed to be included in Desktop & Hybrid reports. How will that be done? Appraisers, I’ve recently been studying a ‘word change’ in various GSE documents. This change happened initially in March 2020 in the COVID era revised ‘flexibility’ Assumption and Limiting Conditions and Scope of Work attached to residential reports, and was further incorporated into TWO new appraisal forms issued in July 2020, which you might not even realize they exist! The word change was subtle, but has major implications for appraisers. The change is ‘sketch’ to “Floor Plan.” But when I inquired about this...
The real estate industry has a square footage credibility problem. ANSI has been out since 1996 with no new pages added and very few changes. In a constantly changing industry with new home styles and designs, change is a requirement. We have to remember that ANSI was originally created to be simple enough for a teenager to understand. It’s a great basic tool but falls well short of solving the real estate industry’s square footage problems. The first problem is that mandating ANSI for all appraisers may be a good first step, but fixing the whole problem requires two additional...
From The Chrisman Commentary (Rob is a mortgage broker but an essential source of information on the mortgage industry). You can subscribe here. From Appraisals are near the top of any list of current lender and borrower complaints about the processing of mortgages. This week I received this note from Mike Simmons, Co-President of AXIS AMC. “I’ve heard of something overhanging the appraisal industry. Namely, that appraisers are ghosting (abandoning) orders and are beyond accountability. Part of my responsibility at AXIS Appraisal Management Solutions is to attend lender conferences and talk about the appraisal industry, and addressing difficult topics centered...
This story, titled “Black homeowners allege appraisal bias in Prince George’s County” is published by a TV station based in Washington D.C. The homeowners who were interviewed live or lived in Prince George’s County, which is immediately east of Washington D.C. Roughly 863 thousand people live in that county, including some who are pretty wealthy. An interesting twist on one of the TV story interviews is the homeowners’ incorrect assumption that just because they SPENT 1.3 Million Dollars building their ‘dream’ house, it would APPRAISE for that amount. A comment was (paraphrasing) “we spent all those dollars buying nails to...
The USPAP Exposure Draft Process Continues To Step Outside Their Purpose With Her / Him as the new ‘Misleading’ Debacle The general idea of definitions added to USPAP was supposed to be industry-specific nomenclature. Because ASB doesn’t have policy writers nor does legal counsel review their work, we get a lot of garbage embedded into the document. And then it often gets removed because it was never correct, to begin with. This garbage in/out process is by design. There is no incentive for the technical boards (AQB, ASB) to get it right. This way USPAP can continue to be arbitrarily...
ASC 2021 Roundtable: Building a More Equitable Appraisal System The Appraisal Subcommittee is hosting the second in a series of roundtables to explore issues of bias and inequities facing the appraisal industry and how to chart a path forward. On November 9, 2021, the Appraisal Subcommittee (ASC) will convene its second ASC 2021 Roundtable: Building a More Equitable Appraisal System, to build upon the success of the first roundtable and address historical and contemporary factors that have contributed to the inequities challenging the appraisal system today. Please join us for the second event of this groundbreaking series, which will bring...
Appraisers, I just received notice about the untimely death due to COVID-19 of a Tennessee appraiser, Stephen Forrester, while he and his wife and two young kids were on vacation in the Bahamas. Details are posted below. Please click here, and donate if you can. I just donated to this GoFundMe. If you can’t make a donation, it would be great if you could share the fundraiser via email to appraisers you know, and on social media, to help spread the word. By the way, Stephen has been Certified licensed since 2003. The National Association of Appraisers (NAA) would like...
