ASC Blaming Appraisers

Dave Towne

ASC Blaming Appraisers For Low Home Values in Communities of Color. The Appraisal Subcommittee, because they were directed to do so, has produced a report, which frankly and explicitly lays the blame for low market values of homes in ‘communities of color’ directly at the feet of independent appraisers involved with mortgage lending.

You will start seeing accusatory slanted media reports about this report. ABC news already has distributed it. A TV station in San Francisco has aired a story already.

Yes, the report casually mentions actual facts that GOVERNMENT policies and procedures promulgated segregated and extraordinarily unfair housing issues in the US, from the 1930’s into the early 1960’s. The GSE’s, FHA, VA wrote the documents appraisers followed. Banks and other lenders went along with those policies. It was part of the culture at the time. Was it wrong? Yes. Just like the slave trade many COUNTRIES encouraged. Which ended, thankfully.

Unfortunately, appraisal associations had to be sued in the early 1970’s to finally eradicate discriminatory advice they continued to promote until then. That appears to be one justification for the piling on this report does.

The report basically says “you appraisers shouldn’t have done what you were told to do”, “you caused the low values”, and now we’re coming after you, the independent appraisers and the agencies who write policies, to fix what ‘the GOVERNMENT’ originally caused.

The report also implies that ‘you’ are responsible because so few ‘people of color’ are appraisers. (If parity to equalize racial composition is such a huge concern, why no outcry about National Football League teams which are dominated by ‘people of color’?)

Appraisers need to take a few minutes and peruse this delightful document. If you read nothing else, read pages 1-12, and the Conclusion below.

There are some other interesting passages buried in the bowels. One that caught my eye is a suggestion that using the ‘Sales Comparison Approach’ is “not fair” to ‘communities of color’, unless the appraiser leaves the immediate neighborhood to seek out higher priced homes elsewhere to artificially increase the appraised value of the subject.

This is the conclusion in the report:

G. Conclusion

An appraiser has the unique power to determine the value of a home, which for most Americans, is their single most important financial asset and holds the key to wealth, stability, and opportunity for their family and generations to come.

In addition, home values affect the tax base, school funding, and community investments. Moreover, time and again, our nation’s economy and financial markets have been significantly impacted by home valuations, with communities of color often bearing the brunt of failings in the mortgage market and the home appraisal process.

Given the importance of homeownership to American families, particularly families of color, governmental and private organizations have called for reforms and a comprehensive examination of the structure and governance of the appraisal industry.

In response to these calls for reform, we have assembled the research and recommendations in this report. We urge federal and state governmental entities, The Appraisal Foundation, the GSEs, lenders, appraisers, researchers, and civil rights and consumer advocates to work together to address the concerns raised in the report, including:

  • Questions About the Governance of the Appraisal Industry
  • Gaps in Fair Housing Requirements and Training
  • Barriers to Entry to the Appraisal Profession
  • Compliance and Enforcement

We hope that this report will encourage conversations among key stakeholders in the appraisal and housing industries to seek workable, sustainable solutions that benefit the whole of the housing market, including borrowers of color.

This ‘train’ of accusations started down the track about four years ago, because appraisers are easy targets. It’s been building steam ever since. The ride toward ‘reforms’ is not going to be very scenic or pleasant for appraisers for at least three more years. Appraisers will need to keep very close tabs on the waybill of items being hauled your way.

Even though this report is extraordinarily discouraging, I will say again: if you are a biased appraiser in any way, in how you conduct yourself or in how you analyze data and report values, then you need to excise yourself from appraisal work. On the other hand, if you are doing your work appropriately and professionally according to current policies and procedures, continue being careful and diligent. And hold your head high.
 

Image credit flickr - anokarina
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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64 Responses

  1. Very Interesting. Thank you.

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  2. Avatar Dan says:

    I believe I will solve this problem by turning down assignments in neighborhoods where this problem exists.

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  3. Avatar Jesse L says:

    So according to the report, no appraiser was an author, and it does not reflect the ASC’s position.

    “The following individuals authored this report:
    Maureen Yap Senior Counsel, NFHA
    Morgan Williams General Counsel, NFHA
    Lisa Rice President and CEO, NFHA
    Scott Chang Senior Counsel, NFHA
    Peter Christensen Principal, Christensen Law Firm
    Stephen M. Dane Founder and Owner, Dane Law, LLC

    The views and opinions expressed in the report are those of the authors and do not reflect the official policy or position of the Appraisal Subcommittee or the agencies represented on its Board.”

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    • Avatar Jesse says:

      This is a train wreck of a document. While there are a few good suggestions (added education, more clear statements, additional openness), essentially, they want the banks (who authored the actual racist laws in this country, and who are still discriminating) to take over majority stake in TAF, and to then reduce the bar to entry to something closer to a real estate agent. The implied changes are frightening to say the least and a brick on the gas peddle towards mortgage fraud.

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  4. Avatar J. Bock says:

    Under G. Conclusion

    “An appraiser has the unique power to determine the value of a home.” This is a bold-faced lie! Appraisers report the market values based on closed and pending sales in the neighborhood. Appraisers do NOT create or “make up” or pull out of thin air, a value for any property. Shouldn’t the ASC understand the difference? Yes, they should! If not, they should all resign! So glad I’m now retired!.

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    • Baggins Baggins says:

      That was my very first conclusion just from reading this blogs article. Let’s help these jokers out with some language correction. “The appraisers have a rather benign and non descript position, analyzing and measuring value which the other parties, the buyers and sellers themselves, have set the value measurement points for their respective market places.”

      The second conclusion is more telling; “home values affect the tax base, school funding, and community investments”. Oh I see. Because posterity thrives and we’re all more prosperous under a heavier rather than a lighter tax burden. Here we go again with bureaucrats telling us the only sensible conclusion to come to is that we need to rely on government and need more and larger government to have a cohesive community. Yeah because higher pricing and higher taxes is really helpful for people starting out on the path to home ownership. As these people simultaneously do nothing about one of the most massive corporate purchasing sweeps in residential housing history, having bought entire blocks and percentages of housing, as companies like Blackrock and others would seek to turn the USA into a nation of renters and not home owners. True independent appraisers stand in their way. We know who pulls these bureaucrats strings.

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  5. Avatar Seneca says:

    So what. Let them have their grandstanding moment. What can they do? Tell us to apply a 10% increase in value of certain neighborhoods. Whatever. Just be ethical every moment of every day.

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  6. Avatar ShenValley Appraiser says:

    “One that caught my eye is a suggestion that using the ‘Sales Comparison Approach’ is “not fair” to ‘communities of color’, unless the appraiser leaves the immediate neighborhood to seek out higher priced homes elsewhere to artificially increase the appraised value of the subject.”

    So, following their logic in this statement, the Authors and Committee members, who most likely live in subdivisions/areas where each home is a different custom design, want us to go to the 1970s FHA tract housing subdivisions to get “comps” for their “custom” homes when we appraise them? How fast do you think they would file a complaint with State Appraisal Boards ?

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    • Avatar Mary says:

      Amen! If they want us chose whatver comps we want, it can work both ways. They have no clue! We do not determine values people. Buyers do! And we will not go outside the subject neighborhood unless there are NO sales inside.

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    • Avatar PJTMC says:

      REALTORS UNITE, you are next for underpricing a property when taking a listing. Find the highest sale prices you can find to support your listing and spend thousands and years marketing the property that never sells then get sued by your customer. Sounds kinda stupid doesn’t it?

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  7. Avatar Mary says:

    G. Conclusion – Wrong right off the bat with the first sentence below.

    “An appraiser has the unique power to determine the value of a home, which for most Americans, is their single most important financial asset and holds the key to wealth, stability, and opportunity for their family and generations to come.” IT IS CLEAR THESE PEOPLE HAVE NO CLUE WHAT WE DO. SURPRISE PEOPLE, WE DO NOT DETERMINE VALUES…..BUYERS DO! ASK THEM AND THEIR REALTORS WHY THEY ARE PAYING LESS IN A GIVEN AREA, FIX THOSE PROBLEMS AND WE WILL SEE VALUES RISE. They seem to think we are all SO powerful. Now if they want us to go outside the neighborhood to bump values, then what is to stop us from undervaluing High priced homes. If Appraisers are given the power to select ANY comps they want regardless of how comparable they actually are, all Hell will break loose and we have just undermined the entire the appraisal process. We are not that powerful but they sure think we are and they are gunning for us every step of the way.

    They want us to name the Borrower as an intended user in addition to the Client/Lender. Everything they are addressing makes it much easier for someone to SUE us for no good reason when their appraisal comes in lower than they think it should. Well we are not going to accept that kind of liablity unless we are paid way more than we are! Even then, it is not worth this attack on our profession and we have no support other than ourselves! Getting E & O coverage will be impossible with this kind of potential liability.

    They want new Appraisers to be able to get into the profession much faster and easier; take some education, pass an exam and BOOM they are a CERTIFIED Appraiser! Not licensed, go right to Certification. They want the proces easier so we have a more diverse Appraisal Roster. If I was Black or Latino, I would be offended that they seem to think we need it to be easier for us to enter the profession. If most of this stuff that they are proposing comes to fruition, most everyone will retire to another profession as it is not worth it. Let the diversity begin, they won’t want this kind of liablity either! Diversity BTW in no way guarantees higher values in undervalued areas. That statement right there is biased thinking. They just need to use AVM’s and be done with this whole thing. We have no motive or vested interest in being biased or worse racist. AS noted in article if there are those out there and I am sure as in any profession there are bad actors, then get out so you don’t continue to ruin it for the rest of us.

    Not once did they say they completed a thorough examination of Both appraisal reports in each instance that they outlined. Why is it automatically assumed that the higher appraisal is the CORRECT one? Insanity! Remember when they said Appraisers were responsible for the Crash in the market in 2008-2009 because we “did what lenders wanted” and over valued properties? They blamed us for that and now they say we have been undervaluing certain properties all along. Overvaluation is just as detrimental to the housing industry as undervaluation. Where is the Appraiser representation because the Appraisal Institute sure has thrown us under the BUS. Thanks for letting me rant. I am done with this!

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    • Baggins Baggins says:

      Don’t get stressed, you’d just be playing their game. You do have a good handle on this, great perspective. You can see bureaucrats and special interests coming a mile away. Toss out a bunch of slander and accusation, get everyone heated, get a movement going, then expand government to solve the problem, expand taxation, profit at other peoples expense. It’s all a narrative and they know ahead of time their points are untenable and not workable. Their solution will be automation because that’s what allows more control over other peoples money and helps circumvent legitimate checks and balances systems. This has nothing to do with race and everything to do with expanded pilfering of the tax payers under a proposed color coded system. Now that there is more money in the hands of the minority base, the bureaucrats what a larger piece of it. Increased pricing is like increased regulations, it limits entry of competing forces. These people can’t manage their own budgets and have ran trillions into the red in an unprecedented quantitive easing cash printing blitz and unlimited special interests cash give away. The idea they could artificially impose parity pricing on real property markets and actually help anyone is laughable.

      It is important to recognize that bureaucrats never actually want free markets. They live and die by tax imposition. This is why we have to reiterate the most important principals of liberty if we want to provide effective resistance. The governments job is to protect liberty. The measure of our prosperity lies with the free peoples. If we allow for continued expansion of government the results are inevitable, they will create two new problems for every issue they supposedly solve. We are past the tipping point where through a long series of redundant taxation points and accelerating de valuing of our currency, well more than half of our income flows to government. It’s so complex people can’t see it but it’s there, we all pay about half of everything we work for to government systems. If considering imbalance and unfair dealings, look no further than the sheer size of government itself.

      https://mailchi.mp/64efe602ac48/december-trainee-update-13701482
      The hopeful new appraisers should be aware whom their competition is. The current appraisers should be aware too. I like the guy willing to work for free for several years, that’s what I had to do. Easier entry will erode the value of the appraisal service because when the license is easier to attain, more people will attain it, and those people will be more compliant and flexible, easier to push around, replace, pull their strings too. The new appraisers will get sued at a record pace themselves if they depart from the basics of valuation principals and try to ‘create value’ in locations where the existing market forces indicate a lower value indicator is present.

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  8. Avatar CJK says:

    In 3 years and 7 months (or at least 2 years) I will be done with all of this nonsense. I feel sorry for the new people who are just starting out. Now FNMA wants us to do desktop reports with a sketch that includes the interior walls. “Minds are like parachutes… they only function when open!” – Thomas Dewar

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  9. Avatar CJK says:

    “Remember when they said Appraisers were responsible for the Crash in the market in 2008-2009 because we “did what lenders wanted” and over valued properties? They blamed us for that and now they say we have been undervaluing certain properties all along.”

    It is funny how that conveniently works for them.

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    • Avatar Dan says:

      It’s also kind of funny that appraisers cannot, under any circumstances, note the demographics of a neighborhood because that is racist. And, in the next paragraph they tell us hiring more appraisers of color may fix the problem. You can’t make this stuff up!

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      • Baggins Baggins says:

        It’s also kind of funny that appraisers cannot, under any circumstances, note the demographics of a neighborhood because that is racist. And, in the next paragraph they tell us hiring more appraisers of color may fix the problem. You can’t make this stuff up!

        Dan, just in case anyone is not aware of what they may be observing; actual racism directed against people whom are not in similar categorization as them. So much for civil rights and the entire MLK movement. It’s color coded policies or bust now. That’s fine, have no interest in dealing with racists anyways. Would prefer it if they’d quit stealing money from the public funds though, taxation without representation and such. The affirmative action movement has devolved into special privileges for everyone except one certain type of human regardless of gains made by said policies in the past. Brilliant. The effected human type occupies 15% of the global populace and falling, however another increasingly growing portion has adopted certain sexual preference views so they can escape said non protected classification. Who’s still buying this?

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  10. Avatar Eric Kennedy says:

    Appraisers give a description of the current market. If the woke Fed wants to force lenders to loan higher than market then give them that option and let THEM make the decision to take the risk. I would also suggest they provide these “infected” markets be allowed to have loans at below prime rates with a cap at $200K or less. Opportunity Zones are already in place from Trump HUD so give them the tools and see what happens, hope it works…. STOP blaming Appraisers for DOING THEIR JOBS!!!

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    • Baggins Baggins says:

      Wait a second, hold the door. The federal reserve is a private consortium of for profit banks whom work for their own interest, while maintaining a chartered position reliant on the notion they are reliable stewards of the publics money supply. Quantitative easing is the process of expanding the fiat money supply to supposedly create economic growth and stability, a departure from Article 1 Section X. The feds target has been a year over year 2% monetary de valuation for decades and of late they’ve lost control and the number is much higher. QE is necessary to fund new government programs and incentives because the government does not produce, it only borrows and directs. QE is taxation, taxation of the existing money supply via currency devaluation, it effects all of us, hitting the poorest the hardest. Doling out even more special favors and discounted cost of money to special groups won’t solve anything, it will only make the problem worse, because that’s what accelerates issues of economic imbalance. Opportunity zones can go either way, it depends if the approach is subsidization by tax dollars (bad) or incentivization of private industry without any government spending via taxation relief and red tape relief (good). These people could incentivize private industry to complete urban renewal projects nationwide with simple tax and regulatory relief, instead they choose to try and rewrite centuries old valuation principals and pick ‘value’ out of thin air to dole out to one group of citizens but not the other. But then again, what’s new, that’s how we got here in the first place. Our tax dollars, hard at work.

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  11. Avatar Raymond says:

    Interesting quote: “The appraisal industry seems to have escaped the type of regulation and scrutiny faced by other participants in the mortgage market. Our analysis finds that the appraisal industry has operated in a relatively closed, self-regulated framework.” BY Senior Mortgage Reporter Georgia Kromrei commissioned by the Appraisal Subcommittee. Pretty amazing when, we all know that all the mortgage lending players (non appraisers) have been totally dictating to appraisers on how to prepared their reports and how much fees they deserve. Its been pretty much a professional slavery situation for decades.

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    • Avatar Seneca says:

      Exactly. While Realtors get away with very little oversight or accusations. Why? NAR spent $18 million in lobbying. Appraisers? $0

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      • Avatar PJTMC says:

        Ferget bout it….appraisers are the most disorganized inept group when it comes to supporting the profession and that is exactly why we get beat up all the time. After 3 decades I get the fact, we are hanging on by the skin of our teeth and only have ourselves to blame.

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    • Baggins Baggins says:

      Great insight Raymond. They presume the fault could lie with appraisers, given the excess regulatory framework elsewhere. That comes with an assumption that the existing regulation is effective in the first place. Trust the government, nothing to see here, move along. Just one problem; The appraisal specific regulation is already integrated into every body of regulatory framework related to lending. If she’d actually read the tens and tens of thousands of pages of lending regulations she’s referring to like many appraisers have, she would know that. Because the appraiser does not do much, other than measure existing market value forces, our regulatory needs are necessarily limited to the appraisers limited scope of work duties, which is measuring value and proving that was unbiased value analysis with a long chain of underwriting guidelines and complex form filling cross references and checkpoints, with redundant human and technical review after report submission to boot. The statement is worded so cleverly and deceptively by Georgia Kromrei, I was compelled to google this individual.

      https://kromreig.github.io/
      Wow, she specializes in hit pieces and pro socialist writing. Not surprising. From rural texas and grew up in Mexico city, now in the big city. Sorry babe, if you want to go up against the entire appraisal industry you are clearly out of your league. We’re not struggling tenets or political pundits and your liberal causes carry no weight here, even if trying to appeal to liberal appraisers. Punt away with slanderous nonsense and deceptive statements or just plainly poor research, it won’t make a difference. Valuation principal is fixed, it is not fluid or flexible. Price is not the same thing as value. Someone send this lady a copy of the FNMA selling guide, firrea, reg z from dodd frank, the hud handbook, state regs, and a few of those several hundred page long mortgage underwriting funding guideline books, and a copy of the USPAP appraiser ethics book. Who wouldn’t have gray hair by the time they are done reading all that. She clearly does not have a clue what she’s talking about and is just reaching, spinning how she is told to spin. I picked that up from her, having suffered through reading several of this ladies other real estate related articles today, lost time in my life which I will never get back and found no value in. An appraisers license is the most difficult real estate industry license to both acquire and maintain. If we were all out of a job tomorrow we’d have no problem claiming Sr positions anywhere else real estate related tomorrow, scoot people like her right out. See ya. An illusion, a deception, see right through.

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  12. Matt McCormick on Facebook Matt McCormick on Facebook says:

    You don’t have to dig real deep to figure out where this is coming from: https://nationalfairhousing.org/

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    • Avatar Seneca says:

      A Brookings Institute driven organization.

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    • Avatar Eric Kennedy says:

      You are spot on – this started with a meeting in DC 2-3 years ago wtih Brookings claiming that comps should be pulled from superior neighborhoods. Another Fed idea that will do nothing but damage the people they propose to be trying to help by making already unaffordable housing even more unaffordable. Democratic Party = Unintended Consequences… or just plain stoopid

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      • Baggins Baggins says:

        The helicopter theory; That if a home was lifted up with a helicopter and placed elsewhere, the exact same home would be worth more elsewhere… Not surprisingly, a politician came up with that gem. A problem that obviously needs rectified. This is the socialist mindset, equality at all costs and elimination of free market principals. They intend to use the power of your tax dollars to force the change.

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  13. Heidi Ford on Facebook Heidi Ford on Facebook says:

    We don’t control the market, we analyze the market. And if you haven’t taken the 2022-2023 USPAP, you are about to be lectured about how you are a racist. The people selling AVM software are playing this for all it is worth.

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  14. Avatar PJTMC says:

    This is very disheartening. I have been appraising for over 36 years and find this offensive to me personally. Never, ever, ever in my time as an appraiser has the thought of bias entered my mind (consciously or unconsciously) or my professional work. Quite frankly I don’t care the color of anyone’s skin, ethnicity or the neighborhood I am working in. This seems more of the “defund” the police mentality than an “unbiased” opinion. Some things will never change, and the appraiser has always been the target of all groups for decades. There are bad players in every profession; politics, law, accounting, medical etc. etc. but, after all these years, the appraiser seems to be the one blamed for all the troubles in the mortgage industry. It is unfortunate and I believe appraisers worth their “salt” will continue to do their job in a professional and ethical manner despite the naysayers.

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  15. Avatar Raymond says:

    Look, these proposal and/or ideas is what the appraisal industry gets, when non-appraiser groups are in control and think they know more than appraisers about the appraisal process. I repeat, again,…..appraisers have loss all control of their own profession. Pretty amazing, that our very clients are telling us how to practice our profession. Do patients tell their heart surgeons how to perform heart surgery???.

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  16. Avatar Pat Turner says:

    This is so totally false and wrong on so many levels it actually turns my stomach!

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    • Avatar Eric Kennedy says:

      You were at this meeting Mr. Pat Turner- tell people about it who have forgotten or were not paying attention. – this started with a meeting in DC 2-3 years ago wtih Brookings claiming that comps should be pulled from superior neighborhoods. Another Fed idea that will do nothing but damage the people they propose to be trying to help by making already unaffordable housing even more unaffordable. Democratic Party = Unintended Consequences… or just plain stoopid

      5
      • Avatar Pat Turner says:

        Eric,

        That meeting was at best a setup to begin with. All this gentleman quoted was Zillow, Zillow, Zillow. Now I’m sure that made Zillow feel really good/bad.

        After the meeting I went up to this guy who was black (which makes no never mind) and asked him did he know what Zillow was or did. The answer was a surface scratch. It was apparent he knew nothing about HOW their algorithms are derived. Try census tracts on for size. Did he check that before he testified. Lol

        One other thing that chaps my ass is this lack of diversity also being “Racist “!

        I’ve done this too long and seen way too much. A story if you will allow…

        About 10 years ago my son screwed around and came to work for me. About 5 years. He met this girl, fell in love, and married her. He was moving to Charlotte because of her dream job. During the run up to the marriage… I asked him if he wanted me to get him a couple of interviews with appraiser friends of mine.

        He looked me dead in the eye and said “Dad, I don’t want to be an appraiser. I’m sick of being wrong all the time”

        He went into commercial real estate… and like all parents I am soooo proud of how much more successful he is.

        Oh, but is that racist? With the advent of the AMC monopoly, I will bet the greatest majority of us would not be interested in the least in becoming an appraiser. The financial incentive has been removed from being willing to train and be trained.

        Where’s the real racism?

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  17. Avatar PJTMC says:

    First and foremost, “location, location, location” is the mantra of Realtor’s and has been for years. That is a pure and simple, unadulterated “fact”. If the appraiser is being blamed for undervaluing properties based on location, then shouldn’t the Realtors be held equally accountable for the listing prices of the varying market areas they work in (could have something to do with their PAC, ya think?). That is the absurdity of this assault on appraisers; but I suppose, in their minds, the end justifies the means. It appears there is an all-out assault on the appraisal profession at the moment from varying agencies. Now the ASC is making unsubstantiated and inflammatory claims the appraiser is responsible for everything wrong with the Mortgage Industry. It seems, once again, USPAP is irrelevant to individuals who do not work in this industry. It is easy to be an “arm-chair quarterback” when you have a “woke” agenda. “Fly in the face of” best describes this assault on the appraiser and, visa vee, USPAP (laws we are licensed to abide by). Sad to say, USPAP and the hard-working people who oversee our industry are also being assaulted by this very ASC report and treated as irrelevant just to meet their predetermined agenda. “Hmmm, so let’s have the appraiser do unethical things so they can produce perceived ethical appraisals that meet our agenda and then file a law suit when the property gets foreclosed for over-valuation”; yeah, that’s the ticket. This can happen in any market and any value range. So why have appraisers or, for that matter, regulations? I think this is the best interpretation to the ASC report. Let’s be honest, the appraisal industry is not a perfect process and has never claimed to be. Admittedly there is room for improvement however intimidation is not the answer. I don’t think this new ANSI mandate by FNMA is coincidence and seems to be in lock-step with the ASC report. The “ethical” appraiser is the last stronghold in protecting the American consumer from mortgage fraud, abuse and collapse of the economy (or have we forgotten the mortgage crash after the implementation of “B” & “C” paper by Wall Street and unscrupulous secondary market lenders?). Sad to say, this report is not surprising given the environment we now live in. I just hope the powers to be can see through this thinned veiled attempt to “defund” and eliminate anything and everything that stands in their way. I certainly hope that the Appraisal Foundation, National Association of Realtors, Appraisal Institute, Smaller Banks, State Attorney’s and any other relevant legal and mortgage industry participant can see none of what is going on is in the best interest of their business and certainly not the consumer. They all need to step up and get to the bottom of what is taking place if they want to be relevant in the future. This isn’t just about appraisers, it about the very fabric of the mortgage industry as a whole and stability of our economy. Today, the appraiser, tomorrow….?

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    • Baggins Baggins says:

      Get to the bottom of it? The Creature from Jekyl Island is over a hundred years old. There is no powers that be whom has our cause in mind. They’re on the other side. It is one of the great disappointments and realizations of being an independent licensed appraiser. You are among the last remaining effective checks and balances systems which have not yet been dismantled by the principals of power.

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  18. Avatar ShenValley Appraiser says:

    Appraisers were previously the only licensed party in a refinance. Mortgage Loan officers now have registered License numbers – tomorrow may come sooner than they think…..

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  19. Avatar Realist says:

    Easy Fix. Do away with independent appraisals for mortgage purposes altogether. Have the lenders/secondary market use computer generated values only; and then they can apply a fairness factor or whatever they want to for their politically correct motivations. To heck with market based values. One question regarding an inconsistency. If appraisers are forced to go outside of a neighborhood for comps, why does it have to be only neighborhoods with higher values/prices. Appraisers need to insert their backbones or increasingly become puppets of the ever growing oppressive machine. Woops sorry, to late – we are sadly beyond the point of no return.

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  20. Avatar FR says:

    Well, if the gubberment wants us to introduce a bias in favor of minorities to increase values, they’re going to have to train us because it was never a part of my training 22+ years ago. We’re going to need a 7 hour CE class on “How to Prove and Support Your Race Based Adjustments”. I sure don’t know how to do it without violating USPAP, UAD, Fannie and Freddie Guidelines, FHFA, VA, and HUD’s Fair Housing Act. We’ll also have to get all the lenders, underwriters, and review appraisers to sign off on it and NAR will have to put some special fields in the MLS that identify the ethnicity of the property owner and neighborhood.

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    • Baggins Baggins says:

      That’s a really interesting take on it FR. The practical application of this is simply not workable. These people do not understand free market principals nor do they care to.

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  21. Avatar Mel Edwards says:

    They cant make their minds up and are talking out both sides of their mouth. Page 26- “The overvaluation of appraisals has a deleterious impact on consumers and communities because it is often tied to abusive and excessive fees and equity stripping. It serves to lock borrowers in unfair and often unsustainable loans, prohibits the ability of consumers to refinance into safer and more affordable products, limits people’s ability to sell their homes, and often leads to other predatory practices.”

    Correct me if I am wrong here. But if I pull sales from, their words not mine, the “white” neighborhood to increase the value in the “black” neighborhood wouldn’t we be over valuing the property?? And doing the very stuff they are complaining about like unsustainable loans, prohibits the ability of consumers to refinance into safer and more affordable products, limits people’s ability to sell their homes??? Help me understand!

    5
    • Baggins Baggins says:

      My home has shot up in value substantially over several years. We pay more in taxes. We have lost mobility. We can no longer switch to another home without taking substantial risk. Mega corporations are attracted to this area for investment housing now that prices are up. Average rent prices doubled and tripled. There are more rentals and fewer single family mortgage opportunities as time goes by, as investors always want another investment home, so we compete with them too. We’re outpaced by the market in general as everything from cost of services to insurance and tax and housing products, even used cars increases rise alongside rising housing price. Community standards have changed dramatically. Progressive policies have taken hold. There is a substantial increase in homelessness. There has been a substantial increase in crime. There has been a substantial increase in illegal migration because we are also a sanctuary state. Young people are often unable to move away from their parents. Carving out investment opportunities is exponentially more difficult. Saving money in the bank carries less weight. What a second. What does this have to do with race because higher housing pricing really sucks! These idiots should be punting for lower housing pricing instead. You know, like when we’re not dealing with artificial restrictions which drive pricing upward? Like when there is prosperity and plenty and the cost of goods comes down instead of increasing.

      0
  22. Avatar JCB says:

    What would happen if all appraisers went on vacation for one month and shut down the mortgage lending industry? Then maybe the powers to be would listen to the voice of the appraisers. Appraisers could express their concerns and demand appropriate changes to the appraisal profession. It certainly would be a major story that would go viral on the internet as well as every news outlet in the country.

    5
    • Avatar Mary says:

      I like it! Let’s do it!

      1
    • Avatar Mary says:

      Like a STRIKE! 🙂

      1
    • Avatar Seneca says:

      Silly idea, First, It would be what they wanted. For us to go away and so they can use AVMs and speed things up. Second, 70% of us are one person shops. This is the reason we’ve never been able to unite & have a voice. Third, how is a family of five going to live without a months worth of income?

      1
      • Baggins Baggins says:

        Shoot, in several instances relating to life events I have taken off several month blocks with absolutely no requests taken in. A few times while I marketed in staunch refusal to work with amc’s, a few times due to health issues, several times simply just to de stress. The world is what you make of it so if you appreciate and agree with the amc model, by all means, keep accepting those orders. Throw the towel in tomorrow, one phone call, back in business with something else. Define what you want out of life and make it happen. Nobody else is coming to save anyone here.

        0
    • Avatar PJTMC says:

      It would be used as a reason to eliminate all of us as loans will be made based AVMs (regardless of accuracy) and they will be saying “see, we don’t need appraisers”. No one will care the AVMs are bs.

      0
  23. The authors ignorance about the appraisal profession is disheartening. The data used in this report was compiled by someone who had a preconceived objective and backed into the final conclusion. In short, I give it no merit.

    6
  24. Avatar Mary says:

    Dave can you send this post with all the comments to the AUTHORS of this document. They need to see how Appraisers, the ones who have boots on the ground every day feel about this insanity. And Oh yeah, send this off to The Appraisal Institute. They need to do more to support us as they too have thrown us under the Bus on this issue!

    5
  25. Avatar MEE says:

    One of the aurthors of this report looks like a lawyer for the AMCs. https://www.valuationlegal.com/services/

    0
  26. Avatar BA says:

    First we must clearly see what this is really all about. Who complains when they buy a home that it isn’t more expensive? Too cheap, please raise the price? No that’s not it.

    The only time “buyers” complain is when they are owners looking to refinance. The only time a mortgage lender complains is when the loan is too small!!! So let’s put this all together. Who befits from refinancing in most of the refinance loans? Well, we know it’s the lender. (Not the borrower who is diminishing their equity with a refinance)

    Now let’s look at low-income areas because my friends this is NOT ABOUT RACE!! ITs about lower income families. No minimum wadge worker lives in the “high rent” district. AND no Doctor lives in a 65K home. This is not ABOUT black or white or yellow or green. IT’s about income. Most of the areas these idiots are talking about have many races including Caucasians residing there. But they are not Doctors, lawyers, Politicians, CEOs or Professors!! They are blue collar workers or restaurant workers, or people with typical jobs. Just plain hardworking humans living on poverty level incomes. We also see out of state or even out of the Country investor landowners who cause neighborhood values to drop by allowing the property to deteriorate to the point of condemnation.

    The lenders don’t help either when they foreclose on a 75K property whose owner missed a payment and after charging default charges on the loan compounding the debt daily util the debt increases by thousands with an absurd penalty interest rate making it impossible for the owner to dig out of the situation. The lender then will foreclose and turn around and sell the REO for 5K to a maggot out of state investor’s LLC who will not do a thing to fix it. Who then rents it out as a “fixer” with reduced rent (still more than it’s worth) and when it gets uninhabitable after a few years of great income…… lets the city tear it down and moves on the next.

    Yea there’s a lot of things that keep the lower income families down but it’s not the appraisers and its NOT RACE!!

    Another point to consider… home ownership is a great way to create wealth but not if you keep refinancing and take all the equity out!! Now we all know for the first 5 years or so of a 30-year term loan almost nothing goes to the principal. So, FNMA now wants to implement a genius idea to let only Blacks (African Americans) have a “new loan” product not available to any other race. A new “40-year loan with no down payment.” Now let’s look at THIS special favor FNMA is proposing. Now instead of the first 5 years with little to no equity it will be over 10 years before an owner (an African American) will have any equity!!

    The truth is red lining was a lender-imposed restriction NO ONE ELSE!! Now they are trying to forget the disgusting things they did to human beings. Like Women who until 1972 or after could not get a mortgage loan or have a credit card in their name. IT HAD TO BE IN THEIR HUSBANDS ONLY!!!! Then we had the age thing were if a woman was of childbearing age she could not get credit because she may just have a baby and not be able to work any longer and pay her debts!! They did not just pick on AFRICAN AMERICANS…. they screwed a lot of humans. Little is ever mentioned about woman and their loss of wealth, education and even today equal pay for woman is not reality.

    The facts are low-income people are not complaining that the home they are buying isn’t more expensive the lenders are!! Whoever is beating the drums is most likely in the pocket of lenders who want more 40-year loans in their portfolios. I have sold hundreds of homes to African Americans anywhere they want in any price range they choose. I have offered to supervise people of all races in an appraisal apprenticeship programs. The reason they turned me down were the requirements (RESTRICTIONS) the lenders demanded prior to 2006 that were implemented in 2008 that caused a shortage of all races of appraisers in general not just African American candidates.

    We are ALL drinking the Kool aide here and they keep us on the defense so much we forget to look through the BS to see the real stories here. Why are we even entertaining this crap?

    I have a low-income friends who live in the previously red lined areas of our town. They are Caucasian, have blue collar wage jobs and are great people. The cost of healthcare, insurance, gas, childcare and their ever-increasing TAXES (we all pay) keeps them in their homes in these areas. They have good pride of ownership and love their neighbors. They do know their homes are not worth as much as the homes in upper income areas. They know what they can afford and that’s why they live where they do…… that’s how they were able to even buy a home…. the AMERICAN DREAM!!

    Let’s face it the FOX have been in charge of the Hen house for years and now they want to eat all of the chickens to eliminate the hunters from making pelts out of THEIR (the Foxes) hides.

    1
    • Avatar Pat Turner says:

      I agree

      Something needs to be thought out regarding these large corporations buying up so much of the inventory which makes it impossible for the working class

      Just think about it

      2
  27. Avatar PJTMC says:

    I will repeat once again what I’ve been saying all along. First, from everything I have read, this whole fabricated agenda is based on refinances that speaks for itself. Second, if white appraisers are blamed for area values, based on sound appraisal protocols, then too are Realtors for list prices and most telling Assessors who value for tax purposes based, in many cases, on valuation companies. So this report should also include: 1. Assessors, 2. Realtors, 3. appraisal valuation companies. Does no one see the ridiculous argument being made here solely for political purposes. It seems this unsupported witch hunt of Americans needs to be brought to the new House of Representatives to investigate. The accusation all white appraisers are racist is a racist statement in itself. Just a never ending assault in support of big banking who should be ashamed using racism as a club to try and run the profession into the ground. I for one will be select in appraisal assignments I will accept in the future.

    1
  28. Avatar Raymond says:

    BTW,…….I find it interesting that Peter Christensen, Esq. is part of the group that put this report together. The Christensen Law Firm is focused on legal and regulatory matters concerning valuation
    (primarily real property) and related services. The clients the firm serves are valuation firms and professionals; technology and appraisal management companies; and also individual and commercial parties who use or rely on valuation service. I would think Christensen who has spoken at appraisal conferences on legal issues for appraisers did not have a bigger influence on the reports findings. Hmmm…………..

    0
  29. After reading this again a few things are clear. First How many here would allow for the borrower to be added as an intended user of your report for the lender? You do and you open yourself wide open for lawsuits in mass quanities. If your value is low, they can now claim that you have hurt your intended user and you are down the creek without a paddle. How will Errors and Omissions insurance deal with this if USPAP requires us to add borrowers as intended users?

    2nd. They plan to dumb down this profession big time so that you just take a class, you pass an EASY test and you are now Certified. There goes public trust down the drain!

    3rd. Diversity will improve upon the problem as they can provide more accurate valuations due to their backgrounds/race. This is basically their own words! Really? Okay well then they will have to know the race of the Appraisers so they can make sure they hire a Black Appraiser for a Black Homeowner and a White Appraiser for a White Homeowner, etc.. Talk about being RACIST!

    They are blaming us for sins of the past with LENDERS and GOVERNMENT many decades ago when most of us were not in the profession yet.

    Finally…..By they time they try to implement ALL of these supposed fixes most of us will be long gone and retired. God help the next generation of Appraisers and users of Appraisers. They say we have the POWER To determine value…..NO WE DO NOT. They have no clue. Buyers determine values, period end of sentence.

    I plan to watch the circus show that ASC is having online on the 24th of January. https://www.asc.gov/node/266053?fbclid=IwAR2JyuZmLJzwSBwjXJWFpePwTD93QKzvky0rgha9CozApOFLzn6EdQGJjQQ

    They are having a public hearing on Appraisal Bias. If you wish to attend online sign up here then everyone should email them (as they say you can for a period of time after this hearing) and give them an EARFUL. I already have emailed them my 2 cents! I can’t wait to see if they have any boots on the ground Appraisers in this public hearing and I hope they have a backbone and can stand up for us!

    1
    • Baggins Baggins says:

      Everyone should click the link Mary provided.
      Oh that’s rich. I’ll be standing by ready to take screen snippets that will live in infamy.
      Andre, it’s time for your next close up, to become a living meme. Make us proud.
      All the 501c non profits leeching off the taxpayers back will be in attendance! Be there or be square.

      1
      • Avatar Mary says:

        Amen! If we all send them emails too after we “sit in” maybe they will get the hint that they should stop making changes without talking to those of us who have boots on the ground to get the true facts! I say class action suit ripe for the taking if any lawyer out there wants to take this one on!! Yes be there or be square 🙂

        1
        • Baggins Baggins says:

          Class action against lenders is tough. They will just phone the fed to print more money, then hire limitless lawyers. I made this comment the other day; Don’t worry too much about the diversity new hires, there is no magical insurance protection for them, nor is there any special allowances granted from the investigative and accountability level. Equity does not mean what people think it means, but they’re going to learn when they get a taste of the fair equitable distribution this industry has to offer for it’s own licensees. Keep up the good work though, we’re all in this together.

          2
          • Avatar Mary says:

            No I am thinking bigger than that. Sue the ASC for defamation of our profession or The Brookings Institute or HUD or Fannie MAE or how about we counter sue any individual that tries to sue us for bias due to loss of our business? I know this is all pie in the sky but I sure wish we had the support in our profession that the Realtors have with NAR for example.

            2
            • Baggins Baggins says:

              This was an older suggestion, but one which is still possible to pursue.
              https://appraisersblogs.com/scofflaw-us-agency-taps-states-4-its-backchannel-budget

              Lawsuits are effective. The downside is the delayed effect, 2 year minimum at absolute best, with excess costs to boot as that’s not pro bono or payment only if successful type of litigation. It’s not pie in the sky, legal relief is effective, just look at how many stories are coming through years later, the soccer player compensated for not taking a knee, the vax mandates struck down, back pay required, it all happens in retrospect if remedy is through the courts. Still though, been going on for so long, when will anyone actually take the time to pick up the phone and talk to their lawyer connections about the possibilities of appraisal industry lawsuits? I mean just form some cold solicitations and redirect any lawyer whom would listen to this website, perhaps push a special article detailing the merits of getting some legal representation for appraisers, as the ASC & TAF have failed miserably at appropriate proper representation. Write the IRS and challenge these groups 501c not for profit status. If anyone had class actions for appraisers, I’d join and chip in, many would. It’s important to understand that non profit groups whom get the grant money to push these controversial approaches have the inside track, basically have government reps on speed dial which is how they get the grant money and special privileges of their orgs in the first place. You are watching political theater, they just need some new group to blame, eventually it will be the next group, the next one, the next. Anything except personal accountability which also brings more money is the name of the game. They will write new rules, install new programs, there will be debates, new legislation, many forms of lip service. Money will change hands. Business as usual and who will be targeted by the corrupted practices of our bloated runaway government next? Only time will tell. Best not to hold out any hope for government corrections from within at this point. Stay thrifty, stay safe. Be prepared to move on a moments notice if these false accusations are levied at you. Besides the argument is going to fizzle fast as foreclosures ramp up. People will not be decrying lack of high prices if they need to re enter the housing market. The entire thing is an illusion staged around appealing to sellers interests, because buyers certainly are not volunteering to pay higher prices. I for one have appraisers are racist story fatigue, it’s old, irrelevant, fictitious, and obviously an insider play for non profit grant money. Your tax dollars, hard at work.

              2
              • Avatar Mary says:

                Thanks for that article link! Totally agree with what you stated here! 🙂

                1
              • Avatar Pat Turner says:

                Let me tell you about a lawsuit

                I was a principle Plaintiff in the AppraisalPort law suit for stealing our data.

                We settled at the advice of our attorneys. Bad move knowing what we know now!!

                1
            • Avatar Pat Turner says:

              Exactly

              1

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ASC Blaming Appraisers

by Dave Towne time to read: 3 min
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