Author: AppraisersBlogs

Fight Unfair AMC Practices - Leverage State Authorities 31

Fight Unfair AMC Practices – Leverage State Authorities

Alarmed by predatory practices among AMCs, a peer has drafted letters urging appraisers to call on state authorities to address unfair AMC conduct and potential regulatory violations.  As appraisers, we have faced an ongoing challenge with Appraisal Management Companies (AMCs) offering fees that are well below the customary and reasonable rates for standard appraisal assignments. This practice has created a troubling trend of “bid wars” where AMCs pit appraisers against one another, driving down fees to unacceptably low levels. In response to this issue, a peer has provided two draft letters that can be easily modified and used by other...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / Customary & Reasonable Fees

Insights from CFPB's Public Comment Period 53

Insights from CFPB’s Public Comment Period

The comment period on the Consumer Financial Protection Bureau’s (CFPB) “Request for Information Regarding Fees Imposed in Residential Mortgage Transactions” concluded on August 2, 2024, with a total of 959 comments received. Upon reviewing some of these submissions, several noteworthy perspectives emerged regarding appraisal fees and the role of Appraisal Management Companies (AMCs). The National Association of REALTORS® (NAR) highlighted the lack of transparency surrounding AMC fees, which are often bundled together with the actual appraisal fee on the Closing Disclosure (CD). This opaque structure prevents consumers from understanding the true cost of the appraisal service and hinders their ability...

ACOW / AMC / American Society of Appraisers / American Society of Farm Managers and Rural Appraisers / Appraisal / Appraisal Institute

72

Accurate Appraisal Underreporting

The HousingWire article highlighting that only 40% of homes sold include an “accurate” appraisal, as defined by the Corporate Settlement Solutions (CSS) report, is deeply problematic and indicative of a concerning lack of understanding around the appraisal process. The report cited from CSS, analyzed appraisal data across 10 states in the East Coast and Midwest, finding that only around 40% of home sales included an appraisal that was within $2,500 of the final sale price. This is being presented as evidence that the vast majority of home appraisals are inaccurate. Appraising a home’s value is an inherently complex endeavor, with...

Appraisal / Appraisal News / Appraisers News / Trending

Uncovering Flaws in FHA Appraisal & Loan Review Process 28

Uncovering Flaws in FHA Appraisal & Loan Review Process

The story of this single mother’s harrowing experience with a defective home purchase and HUD’s negligent oversight exposes deep flaws in the FHA appraisal and loan review process. After sacrificing for years to rebuild her credit and earn the right to become a homeowner, this borrower found her dream home in the country – or so she thought. During the home inspection, several issues were flagged. The seller, an investor who had purchased the home in an estate sale, was unaware of the septic system’s location. The seller agreed to have the tanks pumped so the location could be determined....

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / CFPB

Exposing Predatory AMCs 49

Exposing Predatory AMCs

Exposing the inner workings of these predatory AMCs and their corrosive influence on the housing market.  Cindy Chance’s recent comments about the concerning practices of some appraisal management companies (AMCs) have struck a chord with many in the real estate valuation industry. Chance is shedding light on the troubling ways in which certain AMCs have come to wield significant power and influence over the appraisal process, often to the detriment of both appraisers and the public. The growth of AMCs in the wake of the 2008 financial crisis was driven by the misguided belief that they could help “ensure the...

AI / AMC / Appraisal / Appraisal Institute / Appraisal Management Companies / Appraisal News

Unresolved Complaints Filed with HUD 47

Unresolved Complaints Filed with HUD

The “unresolved complaints” may not be as clear-cut cases of discrimination as they are being portrayed. The lack of resolution in the fair housing complaints filed with HUD regarding alleged appraisal discrimination has become a pressing concern for all parties involved. As highlighted by Peter Christensen, HUD has received over 200 such complaints since 2020, yet has failed to make a determination on the merits of any of them, either way. This suggests that the complaints are not as straightforward as they may initially appear, and that there are significant challenges in distinguishing legitimate grievances from those driven by other...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / HUD

Fannie & Freddie's AI Appraisal Photo Recognition 46

Fannie & Freddie’s AI Appraisal Photo Recognition

A colleague recently shared an important heads up regarding Fannie Mae and Freddie Mac’s plans to implement photo recognition AI to analyze appraisal photos. This technology can scan a single photo and extract over 100 data points related to quality, condition, and repairs. For example, it can identify flooring types, appliance models, and even assess light levels in a room. Later this year, the GSEs plan to run all appraisal reports through this AI and cross-check the appraiser’s stated quality and condition ratings. If the AI’s analysis differs significantly from the appraiser’s, it will automatically generate a complaint letter to...

Appraisal / Appraisal News / Appraisal Technology / Appraisers News / Fannie Mae - Freddie Mac / Trending

Fannie Mae Census Block Grid Adjustment Raises Redlining Concerns 29

Fannie Mae ‘Census Block Grid’ Adjustment Raises Redlining Concerns

“FNMA’s collateral underwriter tool has a line item adjustment it makes on every comparable called Census Block Grid.”  In a recent discussion within the comments section of an article titled ‘The Censorship of Appraisers,’ an appraiser shared a concerning statement from an underwriter about an adjustment made by Fannie Mae’s Collateral Underwriter tool. The underwriter revealed that the tool uses a ‘Census Block Grid’ adjustment (CBG) to evaluate comparable property values. This adjustment, which modifies values based on median home values within specific census blocks, raises concerns for potentially reflecting practices akin to redlining – a discriminatory practice that is...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Collateral Underwriter

Appraisers to Subsidize UWM Underwriters' Salary 47

UWM Underwriters Subsidized by Appraisers

The $29 fee also happens to nearly match the average hourly base salary of $29 for UWM underwriters.  United Wholesale Mortgage (UWM) began an aggressive campaign in September 2021 to recruit appraisers for their new Appraisal Direct system, which aimed to cut out appraisal management companies as middlemen. Through repeated emails, they urged appraisers – both current and former, alive or deceased – to partner directly with UWM through ANOW. Despite claims that this system would benefit appraisers by providing higher fees and faster payments, the reality did not match the hype. Fees offered by UWM through ANOW were well...

Appraisal / Appraisal News / Appraisers News / Trending

AI to Counter the Flawed Appraiser Bias Narrative 29

AI to Counter Flawed Appraiser Bias Narrative

In reality, appraisers have a great story to tell, but we have a long way to go to refocus the terribly flawed “appraiser bias” narrative onto facts and science.  Last week’s email from Cindy Chance, the CEO of the Appraisal Institute, marks an important and long overdue shift in the organization’s approach to addressing accusations of bias in the appraisal profession. For too long, appraisers have faced sweeping claims that their valuations are biased against certain groups, despite appraisers’ ethical standards, rigorous training, and lack of financial stake in transactions. As Chance acknowledges, the Institute should have done more to...

AI / Appraisal / Appraisal Institute / Appraisal News / Appraisal Organizations / Appraisers News

xml sitemap
blank