Author: Jeremy Bagott

Finding of Bias in Home Valuations Fails by Own Measure 34

Finding of Bias in Home Valuations Fails by Own Measure

To the surprise of no one, their redacted study found that what Perry et al. had characterized as race-based differences in home valuations were almost entirely due to socio-economic status, not racial bias by real estate appraisers. In an updated refutation of the findings of Brookings Institution researcher Andre Perry, Edward Pinto and Tobias Peter of the AEI Housing Center demonstrated just how broken the Brookings research was. Perry’s 2018 research, titled “The Devaluation of Assets in Black Neighborhoods,” pinned the nation’s racial wealth gap on 80,000 state-licensed real property appraisers. Unfortunately, these now-discredited findings have been levered by housing-industry...

Appraisal / Appraisal News / Appraisers News / Trending

List of Banned Words... The Nightmarish End of Home Appraisals 27

The Nightmarish End of Home Appraisals

In his 1946 essay “Politics and the English Language,” the late British novelist, essayist and critic George Orwell examined the connection between political orthodoxies and the debasement of the English language. In a truly Orwellian move, mortgage giant Freddie Mac recently announced its intent to censor an arbitrary collection of words such as “desirable,” “safe,” “well-kept,” “student” and “crime” when they appear, in any context, in the hundreds of thousands of appraisal reports it relies on in mortgage underwriting. It would be hard to make this up. One of the banned words – “desirable” – will be recognized by students...

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

Dazzled by Wizardry, Federal Mortgage Regulators Ignore Zillow Debacle 17

Dazzled by Wizardry, Federal Mortgage Regulators Ignore Zillow Debacle

This rulemaking is one more sign that federal bureaucrats are all in on a whacky plan to use technical wizardry to tease out the value of individual properties across the country… Secretary of Defense Robert McNamara was a committed technocrat. Under his direction, a team of policy advisors descended into the Pentagon’s cavernous basement in 1967. They fed punch cards into the basement’s IBM mainframe computers with everything that could be quantified about the Vietnam War. Numbers of ships, tanks, transport helicopters, gunships, fixed-wing aircraft, artillery, troop strength, machine guns, ammo. They queried the computers, “What year will we win...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / CFPB

Clean-Slate Laws, Bad Policy Could Dispatch More Felons to Borrowers Homes 8

‘Clean-Slate’ Laws, Bad Policy Could Dispatch More Felons to Borrowers’ Homes

The idea of unlicensed individuals being hired off the streets and paid a pittance to video and photograph the interiors of borrowers’ homes, which would include the exact location of valuables and children’s bedrooms, has been unsettling to some.  An astute real estate broker recognized the name of a Michigan man awaiting sentencing in an armored-car robbery. The latter had been engaged by one of six companies authorized by mortgage giant Fannie Mae to dispatch so-called “data collectors” to borrowers’ homes. The broker alerted the bank and the National Association of Realtors. New, progressive laws designed to conceal felony convictions...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac

Woke 'Bounty' Bill Will Chill Speech of New York Appraisers 8

Woke ‘Bounty’ Bill Will Chill Speech of New York Appraisers

A bill being crafted by the New York state Senate’s Finance Committee would, in effect, place a $2,000 bounty on the head of any heretical real estate appraiser in the Empire State who dares conclude a value that fails to satisfy a seller, serial refinancer or commissioned broker in a deal. Vulnerable buyers, who could be paying off inflated loans based on coerced values, would simply have to live with it. If enacted, the bill would authorize fines to be levied on appraisers for a new category of thoughtcrime – something called “appraisal discrimination.” Half the proceeds from the fines...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Political Action

Are the Courts a Remedy for Nation's Financial Truth-Tellers? 6

Are the Courts a Remedy for Nation’s Financial Truth-Tellers?

Politicized boards and commissions with little accountability to the electorate want to deplatform these truth-tellers at every turn.  This month, the U.S. Supreme Court dealt a blow to the Regulatory State. Financial analysts, fiduciaries, auditors and appraisers should take heart. Those targeted by a growing number of independent agencies, boards and commissions may now immediately challenge an agency’s constitutionality in federal court without having to submit to a drawn-out administrative process that frequently serves only the interests of the agency being challenged. The decision couldn’t have come soon enough, as an army of assorted technocrats, believers, grand viziers, cronies, hustlers...

Appraisal / Appraisal News / Appraisal Organizations / Appraisal Subcommittee / Appraisers News / ASC

Canadian Banks Will Exploit Gutted U.S. Mortgage Underwriting 13

Canadian Banks Will Exploit Gutted U.S. Mortgage Underwriting

Canadian banks see the newly dismantled underwriting safeguards and risk-shedding experiments at Fannie and Freddie as a way to keep the party going, with the risk passed along to the U.S. taxpayer directly… Canada’s banks are in trouble. Their mortgage portfolios are filled with time-bombs called “fixed-payment” mortgages. Despite the name, the loans contain rate-hike triggers that are causing payment shocks for borrowers. High interest rates and falling home values mean borrowers north of the border aren’t able to refinance out of these toxic mortgages. Short sellers are even targeting one Canadian bank, Toronto-Dominion Bank, better known as TD Bank....

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

HUD Hands $54 Million to Nonprofits in Quest to Cow Appraisers 17

HUD’s Private Inquisitors Will Chill Protected Speech of Appraisers

HUD awarded $54 million to 182 nonprofits to serve as posses in a a Spanish Inquisition-style drive. The deep pockets of the federal government will be used to help the nonprofits chill the protected First Amendment rights of appraisers to develop disinterested opinions of value of the properties they appraise.  In the early 1990s, the Texas Legislature established an unusual nonprofit known as the Boll Weevil Eradication Foundation. The times were dire. A near-biblical plague of weevils had descended on the state’s cotton crop. So, state lawmakers granted the private organization the powers of government to combat the malevolent creatures....

Appraisal / Appraisal News / Appraisers News / HUD / The US Department of Housing and Urban Development

How U.S. Home Valuations Are Being Subverted 21

How U.S. Home Valuations Are Being Subverted

At the crossroads of it all is a campaign to weaken or eliminate valuations… The nonprofit is now exploring ways it can set standards for automated valuations… Expect greater distortions from Freddie and Fannie’s plodding and committee-driven foray into automated valuations.  Sometimes when the hair on the back of your neck stands up, there’s a reason for it. The nation’s $11 trillion mortgage market has been nationalized. This coup occurred in broad daylight and gradually. With Freddie and Fannie now in their second decade in federal conservatorship, the prospect that they will ever again be subjected to the watchful eye...

Appraisal / Appraisal News / Appraisal Organizations / Appraisal Subcommittee / Appraisers News / ASC

Poke-and-Sniff: How U.S. Regulators Became Disease Vectors 6

Poke-and-Sniff: How U.S. Regulators Became Disease Vectors

  Poke-and-Sniff… Once federal bureaucrats embrace a destructive practice, it can take a lifetime to correct it. When government tries to fix a problem, it often makes the problem worse or creates a new one. The German economist Horst Siebert called this phenomenon the “Cobra Effect.” Occupational licensees and those in heavily regulated industries will recognize the pattern immediately. American high schools routinely teach Upton Sinclair’s novel “The Jungle.” Its publication more than a century ago led to the quintessential success story for federal regulation. But once regulators began doing something to fix the problem portrayed in Sinclair’s fictional work,...

Appraisal / Appraisal News / Appraisers News

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