Appraisers Destroying Goliath’s Messaging
The seeming destruction of the appraisal profession by the federal government, GSEs and lending stakeholders is a collective action problem. Appraisers are responding to new GSE and lending dictates with reactions based on our own personal well-being. Not enough people speak up or stand up to change the trajectory of the narrative. Or so it seems.
Appraisal waivers, hybrid appraisals, automated valuation models, all based on the last 13 years of data collection by an entity I will call Goliath has created a paradoxical inversion of what it was designed to do; instill greater reliability on appraisal data. The resulting attempts to remove appraisers from lender risk decisions is not an accident, it is deliberate. However, it is widely know and basically misunderstood, that we greatly outnumber those we have been forced to be pitted against. Goliath’s voice has become louder, his muscle flexing more pronounces, however, his fatal error is trying to remove all of the courageous people from the equation, thus putting at risk the very institutions he says he is protecting.
As examples, Goliath appointed Marcia Fudge as head of HUD. Her narrative of racial inequality in housing and lending is picked up by the appointed media and spewed as truth. David Benson over at FNMA believes consent of the governed is too dangerous to tolerate. These are not egomaniacal characters portrayed by Mike Myers as rulers of the world who want what they want, but instead are puppets who do not know what kind of Hell they are inviting, resulting in the creation of chaos. They are manipulated by those with a completely different agenda; deliberately impacting financial markets, personal wealth and the end to the American Dream, eroding personal freedoms and guaranteeing chaos. They are taking away the structure by which our national economic health depends. Or so it seems.
Goliath’s strength is in his messaging. It is appraisers who are destroying the message. Not by using national media, but in a grass-roots way. Keep speaking up. Keep the blog posts going. Keep telling lenders and investors, IN THE REPORTS YOU WRITE, the truth about neighborhoods, market trends, interest rates and prevailing buyer trends. Keep fighting those bias complaints. Do not cower under the pressures of banned words and phrases.
As famously stated by William Shakespeare: He doth protest too much, me thinks.
Kimberly is right on the money. Personally, although so close to calling it quits what I say is not so relevant, I find myself more and more exposing scope creep and report rejections for ignoring non-industry guideline – client specific – items that force us into being contractors and safety inspectors rather than valuation professionals (like after making an appraiser responsible for reporting water heater strapping – sneaking in the words “properly installed” double strapping to compound the problem) and asking them where in the assignment guidelines this requirement is specified. Surprising how many times the “correction” or “revision” request is set aside. It is set aside because such demands are in neither appraisal standards nor within the expertise of an appraiser. Just make it clear you’re asking for clarification and not being confrontational and you should be just fine.
No lender, no GSE, no Congressional member cares about the “American Dream” it’s all and only about the Benjamins. How fast and how much can they garnish. Doing everything possible to remove the “Congressional Mandated government regulated (ad nauseam) appraisers/appraisal industry. AMC’s, AI’s, Waivers, Cries of discrimination, Scope creep, form changes, expansion of “inspection” requirements, Word prohibitions, CONSTANT “standard changes”, Zoning changes, quicker, faster, cheaper but more and more information required; what can possibly go wrong?
Have you read Jeremy Bagotts latest article?
https://nitter.cz/jbagott/status/1743291543975547220#m
Whew! Good thing such an event would never happen here in the good old USA!
Policy for sale. Peace sells, but who’s buying?
Dealing with changes in guidelines & standards takes intelligence, ethics, and common sense; not crying.
This is an interesting comment coming from someone that has been out of the industry for the past 16 years .. Cant help but wonder why you came back and who you work for. https://idfpr.illinois.gov/DRE.asp
active for 35 + years
you might need some brushing up on how to research.
When do the people purposefully pushing appraisers out of the picture, eliminating safeguard checks and balance systems meant to protect consumers and the viability of government sponsored enterprises which justifies their tie in with taxpayer backing in the first place. When do they get held to the same standard?
Yeah I will need to add one of your Pepe the frog memes for good measure.
Ha! I just cut that comment down, then after had read your message. Well, at least someone is reading. Thanks.
You do know that Pepe is a white nationalist symbol of hate & racism right?
Well Real Estate is the last and final tangible item that Americans own. If all safeguards are removed; the grand theft “real estate game” can begin.
The problem with your rather brief analogy, henry, is that it takes intelligence, ethics, and common sense from the creator before blind acceptance should be expected from an entire industry. If you don’t have a problem with scope creep and standards that no longer apply to value or marketability, I suppose that is your choice to make. The rest of us are not crying, just having a little peaceful protest. Remember those?
Sure looks & sounds like a lot of crying & whining to me.
At least in the past year & half… this blog is all rants… rarely anything productive.
I am guessing majority of you are working part time at Home Depot… or writing small novels on blogs like Bags.
The issue is many of you crybabies lack a compete understanding of the current issues at hand in the industry, the country, and reality.
Sad. Like this blog of losers.
Yes Henry, there are probably a lot of appraisers working at part time jobs struggling to pay their mortgages and feed their families.
Your smug condescending comments are not helping anybody.
henry jung,
You’re constantly acting like you’re on some moral high ground, yet you clearly aren’t. You harass, mock and insult other appraisers. We have yet to see a comment of yours that isn’t dripping with negativity, or an attempt to bait a response from someone. You are nothing but a troll, and a bad one at that. Since you have nothing more up your sleeve than cheap attacks, we’ve decided to:
1- Unsubscribe you
2- Not allow you to post comments. Going forward your comments will automatically be deleted.
Please stay away from this blog!
Oh come on guys. Pepe the frog is just another meme string which organically originated from various online forums and peoples imaginations as they debated online. It’s funny, because of the ameture qualities and the million cheap photoshop alterations out there. A frog eating popcorn, now a symbol of white nationalism? This defies logic and is simply not a rational conclusion. Pepe’s fun, he’s your online pal. Before that was the ‘bait’, also quite entertaining and images worthy of a click and save. It’s the slander crew whom decided to slap a label on this, as if to shame everyone whom disagreed with others points of view. Everything wiki is fluid, online content able to be changed by basically anyone with a login. One day it says this, the other day those pages say something entirely different. We try to stay fluid to sidestep the constant propaganda which saturates syndicated media and online spaces these days. Let the people troll, not that big of a deal. I like Henry, regardless. We should bring back the enough downvotes makes posts invisible feature. Anyways, it’s free day at the stock show, talk to you soon. Thanks.
Not sure why my previous post disappeared, but just be reminded that changes is guidelines & standards should take intelligence, ethics, and common sense as well, not just with specific intent to make the lowest paid spoke in the wheel the biggest scapegoat.
https://www.fhfa.gov/Media/Blog/Pages/Reducing-Valuation-Bias-by-Addressing-Appraiser-and-Property-Valuation-Commentary.aspx
They looked at millions of appraisals and this nonsense was all they found.
https://www.usmi.org/policy_priorities/guardrails-for-appraisal-modernization/
Related.
Industry related, not everyone is cool with such broad use of waiver programs.
https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA-2023-PAR.pdf
Control+F to bring up keyword search tool, enter; appraisal
Another challenge for FHFA is providing sufficient oversight of the Enterprises’ use of appraisals to ensure those appraisals do not improperly consider bases that are prohibited by federal fair lending law. FHFA’s independent review of a sample of appraisal reports concluded that valuation bias persists in housing finance in America. In its review, the Agency identified several overt references to race, color, and other prohibited bases in appraisals. During our evaluation, FHFA told us they made 17 referrals to the U.S. Department of Housing and Urban Development and made appraisal information available to the U.S. Department of Justice. The Agency also told us it shared information with the Consumer Financial Protection Bureau. Although the Agency had not taken the additional step of filing complaints with the state licensing authorities responsible for investigating complaints against appraisers, in April 2023 it required the Enterprises to submit complaints to those authorities. Working to identify and address appraisal bias will continue to be an important challenge facing FHFA and the Enterprises.
Which takes us to a report specifically about this filing complaints endeavor.
https://www.fhfaoig.gov/sites/default/files/EVL-2023-001.pdf
Here is a gem;
FHFA also reported that it has made approximately 25.6 million active appraisal records available to DOJ; FHFA has not made any specific referrals to DOJ Anyone care to calculate this ratio of investigations to actually finding something? What’s the technical percentage or odds on 17 in 25.6 million?
FHFA told us that it made 17 referrals and provided approximately 25.6 million active appraisal records to HUD, the agency with lead responsibility for enforcing the Fair Housing Act.
And somewhere in the past several months posts, I had posted the FHFA conservators monthly proposals or guidance points for Fannie and Freddie, and one of their constant points which the GSE’s are required to accomplish, in order to stay compliant with conservatorship rules, is to ‘increase the amount of automation used to eliminate human appraisal bias’. Basically forcing all of us out of a job based on an assumption their avm systems will be more reliable, and an assumption because there are so many white appraisers, none of us can be trusted. (but magically we’d be trustworthy again if totaly unrelated people whom were not white, were also part of the industry.) Perhaps if they did not allow legalized theft and embezzlement by way of sanctioning the AMC appraisal management industry, the appraisal industry would not have shed well over 100,000 licensed persons, and we could have kept up with the times and trained more people, to better represent current social relations and conditions. FHFA totally does not understand the issues revolving around the appraisal industry.
Dare to look. I’m getting pretty tired of even looking at this, but per your comment Mr Kues; they probably believe these decisions are made using those criteria and common sense, but it’s pretty obvious to actual working appraisers they have swung for the fences and struck out repeatedly, so far off base, these decisions defy logic. Yet, per other industry stakeholders perspectives such as USMI United States Mortgage Insurers Group, as posted above, some are drawing more rational logical conclusions and urging caution rather than abandoning the merits of using human appraisers. Although I’m sure most of us would agree; more desktops and remote inspectors is not the right answer. Isn’t it nice to know the entire CU repository is now in the hands of HUD and the DOJ? Brilliant. I wonder if they’re even aware of the AEI report from Tobias…
https://www.aei.org/research-products/report/how-common-is-appraiser-racial-bias-an-update/
AEI report related. I mean for real, 99.99999% of the feds discoveries on the matter are clearly on the side of incompetence, and not bias. Seventeen idiot appraisers out there making comments like ‘the neighborhood got spicy’ and such, ruined it for everyone else. Good thing the government does not hold itself, and it’s own employees to a similar standard of total and complete one size fit’s all and if anything goes wrong it’s everyone’s fault sort of accountability. Today’s research reveals fresh data, relating to the pattern of increased state agency complaint referrals regarding appraisers. Dare to look. As far as comments disappearing, refresh the page, that’s most likely something technical related, happens to me now and then too.
I think the industry, and the world for that matter, would benefit greatly if youth education began with common sense rather than political correctness. When in Rome, do as the Romans do, is an age old, very logical, common sense application of humanity. Without describing my own sex, religion, weight, political correctness, or bias of any kind for any reason, if I am in your neighborhood, state, country, organization, church, or whatever……. then I approach the assignment, job interview, guideline compliance, whatever, with the Golden Rule as my engagement letter. If I am a lender, I want to know if the security for my money is in a blighted or crime ridden area, headed in the wrong direction, or prone to foreclosure, I DO want to know that, and I DO want that information well supported. I DO NOT care what the color, sex, religion, ethnicity of the borrower is/are, but I DO CARE about the payment/credit history of the prospective borrower. Now then, if my only choice is to retain a licensed appraiser to get that information, and that licensed appraiser is wearing handcuffs and a blindfold regarding what I need and want to know, working instead in favor of industry standard political correctness and legislated rulings that they CANNOT offend anyone, especially the borrower, then my money comes out of the loop. Quite simple, actually, and just wait until the federal census rules are changed. Imagine what happens to the national and global economic planning when all the information now reported (sex, race, national origin, age, etc), that appraisers are prohibited from mentioning under threat of cancellation, becomes extinct. Just imagine. Then remember this old whining fart that said “I told you so”.
Yeah. The situation is just alarming and confusing. The illusion of fair markets all the while investor classes have a totally different approach, a more sensible real world approach, to measuring risk factors.
What is the DOJ going to do with all those appraisal records?
How is it that now HUD has access to every appraisal for fannie since the CU data base started recording appraisals? They’re not the intended client. Certainly the DOJ is not. This is their idea of data security with CU appraisal data?
https://appraisersblogs.com/majority-of-reviewers-had-very-limited-field-experience/#comment-39237
Previously I wrote about the CU system, dangers of using typist services, and how this tool has been misused since it’s inception. And now they’ve given the entire body of appraisal records to the DOJ? What about our promises of confidential data to all the home owners? How do lenders feel about this unauthorized data sharing?
This defies belief and I’m still trying to digest this information. FHFA appears negligent here and perhaps someone should get the SEC involved. Clearly a bridge too far. Now requiring complaints be pressed against appraisers and state boards are overwhelmed nationally. Are these bonafide violations of appraisers and consumers constitutional rights? Does Brookings Institute have a copy of the CU system data too? The gravity of this is simply incredible.
The problem with being and independent fee appraiser is that we’re too darn independent for our own good. If we were all members of the Guild (AGA) we could act collectively and legally. I’m retiring soon so it won’t matter much to me but I hate that our profession is being demeaned and denigrated.
This is EXACTLY what I keep harping on. We are our own worst enemies. We’re in a “cut-throat industry” where we’re all cutting our own throats.
I agree, but the problem is we all talk a lot and pontificate but we do nothing more than that. Its like a big therapy session with no end game. I’m as guilty as the next person. As my late, great football coach used to say “Talk is cheap, it takes money to buy beer.”
Building skills and in turn an online community whom constantly contributes incrementally to better total picture awareness and education. I’ve learned a lot through these forums, having researched so many specific points, all the links. One step at a time. The long standing position is that people will care about this research and content, when shtf. Which many believe is already airborne and heading for the blade. Every contribution matters, in it’s own interesting and often unique ways. I wrote a letter to judicial watch just recently. And the mayor, and the governor. Was thinking of forwarding some of it to the pro bono law firm Mr Bagott referenced in one of his latest articles, the one with the engineer. Most realty sales agents stand in stark disagreement to FHFA’s goal on automating humans out of the process, especially appraisers. Most people literally laugh when I tell them the appraisers are all racist story, as if I’m making up a joke or something, the concept is that absurd and typically only accepted by those already deeply immersed in state propaganda. I like independent appraisal and it’s unfair for them to shut this industry down to accommodate a big short or the next socialist program. So we keep fighting. Retiring, leaving, or abandoning all the citizens to GSE’s modernization programs solves nothing, everyone in this country will be effected by these policies eventually. Everyone’s’ contributions do matter and are important. Write a new article. Unique honest journalism is so difficult to come by lately. Keep looking up.
Here we go again!
“Yes I’m sure on the appraisal form used by lenders, there’s a big box that says CHECK THIS IF OWNER IS BLACK. Yeah. That’s totally how it works.”
https://x.com/townhallcom/status/1744420973321859115
So the black dude pays lower taxes? Sounds like fiscal responsibility to me.
Lower taxes by the black dude. Why? Cannot say this in the appraisal: Higher crime area. Statistics: Blacks comprise 13% of the overall population. Yet commit 65% of all crime. 50% of all homicides. FBI statistics NOT mine. But we are not allowed to point out this FACT. Politicians indicate that black neighborhoods are “undervalued” by racist appraisers? Or is the value of the homes less in a (non-identified) higher crime area. Ignoring facts can be dangerous, this is a double edged sword. Damned if you do, and damned if you don’t.
Sadly, all those making these comments and decisions in our industry are completely ignorant to our process. All of the sudden, Location, Location, Location doesn’t matter ?? Who should the focus be on ?
Can we flip the argument? Where I could get an ‘equitable appraisal’, which values the home as if it’s somewhere else, so I pay less instead? The homes over there sell for less, so why should I have to pay more?
Because you are not over “there”. That is what the market says, not us
Sorry to say, and, I tried to bite my tongue, but Biden is a joke. He has no clue what he is talking about less an authority on appraisal or how the appraiser does his job. He just needs to shut his pie hole. My comment is also is inclusive of female appraisers.
I dont disagree with anything you’ve said. Knowledge is power but what good is it if it’s not implemented? That’s where we all fall short.
Our Independence has been used against us since the beginning – especially after Dudd-Fwank. Henry may say this blog is useless but it’s about all we have is our blogs and social media. The State Coalitions were gaining some momentum and are still viable but our downfall is from the Central Swamp in DC. REVAA is parked there next to AARO with $Millions in lobbying efforts and WE are being splintered as the rest of the country with the “racial divide”. It’s truly sad to be a part of and having to watch this happen to our lives and careers. With all that – our focus needs to be on DC – join every coalition you can find and they need to focus on joining forces and having representation in DC at every opportunity. Else, the beatings will continue.
Our job may be to protect the public trust, in theory, but our REAL job is the one we are assigned to accomplish, and that is to provide the lender (institutional or private) with an informed and market supported opinion of value that will assist them in making a decision in which the money in their pocket, or the money in their pocket that belongs to others, is at risk. If that lender is us, which of the following is absolutely and without compromise the most important things for us to consider: Would it be if and how the water heater is strapped, or would it be the appearance of the neighborhood?; would it be the functionality of the stove, or the existence / lack of crime in the area?; would it be the use of a word like “poor”, or the accurate reporting of condition?; would it be the coincidence of racial makeup, or the fact that 15% of the homes in the area are 100% financed and regularly foreclosed upon?; would it be that the appraiser drove 20 miles to take a picture of a locked gate with the structures not visible, or might it be acceptable to render recent MLS photos of the exterior, interior, yard, and extra features? This list could go on and on, but the reality is that the industry keeps coming up with new “property inspection” items and “picture blurring” requirements while at the same time putting handcuffs on the appraiser regarding actual, verifiable, market supported value influencing factors within the expertise of the appraiser retained to perform the service. Now, any one of you that really believes this scenario is within the scope of “protecting the public interest” rather than preparation for yet another collapse….. I sincerely welcome your logic, criticism, and condemnation.
You ain’t wrong