Author: Jeremy Bagott

HUD Mulls Use of Convicted Felons to Ramp Up 'Discrimination Testing' 29

HUD’s Use of Convicted Felons to Ramp Up ‘Discrimination Testing’

It wants to bootstrap released felons by allowing them to work as so-called “fair-housing testers” for the many nonprofits HUD provides grants to… If the rule is changed, the HUD-subsidized nonprofits could hire felons to ramp up sting operations against real estate brokers, leasing agents, mortgage loan officers, escrow officers, title officers, appraisers, property managers and others.  Few would argue that society doesn’t benefit when convicted felons are rehabilitated and re-integrated. But according to a frequently cited study by the Bureau of Justice Statistics, about two-thirds of released prisoners are arrested for a new crime within 3 years, and three-quarters...

Reindeer Standards As Unenforceable As Appraisal Code 8

Reindeer Standards As Unenforceable As Appraisal Code

There’s a lot to like about the bylaws of the Association of World Reindeer Herders. The code defines how herders promote professional, commercial and cultural contact in all matters related to reindeer herding. The document sets the gold standard for disseminating information world over about reindeer husbandry. The bylaws were approved at the first Congress of World Reindeer Herders on March 2, 1997. If you don’t like the 1997 version of the bylaws, there’s a 2001 version, a 2009 version and a 2013 version. Are the group’s bylaws enforceable in the United States? No. As commendable and insightful as they...

Fannie's Loan Buyback Sophistry Relies on Modifying Analysts' Behavior 8

Fannie’s Loan Buyback Sophistry Relies on Modifying Analysts’ Behavior

“Many of the repurchase letters make no sense,” said the insider. If analysts don’t write enough defects on those files, they get hammered. If analysts fall short of their peers in “production points,” it’s considered their fault, said the insider.  At the heart of Fannie Mae’s valuation system is a tool that shunts a subset of the millions of loans purchased by the mortgage giant each year into a “high risk” pool. Fannie then pressures and incentivizes a corps of in-house analysts to create further doubt about the loans in order to send repurchase demands to lenders for up to...

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...

List of Banned Words... The Nightmarish End of Home Appraisals 29

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...

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...

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...

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...

Are the Courts a Remedy for Nation's Financial Truth-Tellers? 8

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...

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....

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