Category: Appraisers News

Escaping the Black Hole: Appraisers Fleeing Mortgage Lending 27

Escaping the Black Hole: Appraisers Fleeing Mortgage Lending

Climbing out of that black hole is nearly impossible. It’s one reason why many appraisers are vacating mortgage lending appraisal assignments.  This “discrimination settlement” hit the fan last week in a news feed I get. Another appraiser (in CA) settles a discrimination complaint: Oakland homeowner settles with appraiser, lender after $300,000 lowball appraisal The entire case is based on allegations by the homeowner, who had decided the value of the home was more than the appraised amount, before the appraisal was done. But when one reads through the story, one has to question whether the appraiser truly was biased against...

Appraisal / Appraisal News / Appraisers News / Trending

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

Low Value = Material Deficiencies? New HUD ROV Policy 40

Low Value = Material Deficiencies? New FHA ROV Policy

The implication that if the VALUE is too low, then there must be “material deficiencies” present, is deeply troubling!  Up until recently, there has never been a standardized policy for mortgage loan related Reconsideration of Value (ROV) requests after an appraisal has been submitted. Now there is, per the attached PDF HUD/FHA mortgage letter. The GSE’s have similar policies. I’m not opposed to having a standardized ROV policy. However, these policies are in keeping with the new initiatives surrounding alleged and often unproved appraisal bias and discrimination claims. But when one reads deeper into the reason for implementing these procedures,...

Appraisal / Appraisal News / Appraisers News / Federal Housing Administration / FHA / HUD

Government-Sponsored Mortgage Giant Fannie Flouts Law 15

Fannie Wants to Script Conclusions of Outside Analyst – Believes It Is Above the Law

Government-sponsored mortgage giant Fannie Mae is essentially forcing banks to repurchase any loan it wants if [the appraiser] refuses to use the comparables Fannie has selected.  [The corporation] was created by the government, is controlled by the government, and operates for the government’s benefit,” wrote Justice Anthony Kennedy in a unanimous Supreme Court ruling in 2015. He was describing passenger rail hegemon Amtrak, but he could easily have been describing government-sponsored mortgage giant Fannie Mae. The Roberts Court held the National Railroad Passenger Corporation – known more commonly as Amtrak – was a government entity for the purposes of the...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Federal Housing Finance Agency / FHFA

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

Fannie Mae to State of Maryland: DROP DEAD 33

Fannie Mae to Maryland: DROP DEAD

Mortgage giant Fannie Mae and her twin, Freddie Mac, have a message for the State of Maryland: Kindly disintegrate. A snubbed Maryland task force is close to filing its report to the governor. It attempted, in vain, to obtain detailed information about the government-sponsored twins’ valuation algorithms – tools that have replaced many home appraisals in the Old-Line State and resulted, some contend, in a feedback loop and run-up in home prices. The task force was formed on the reasonable premise that the state has an interest in the twins’ activities, since Marylanders will be left with the clean-up costs,...

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

The One-Mile Rule: Prudent Policy or Modern Day Redlining? 8

The One-Mile Rule: Prudent Policy or Modern Day Redlining?

…whether through redlined maps or implicit “one-mile rule,” the result can be undervalued properties in historically marginalized neighborhoods.  Throughout the history of mortgage banking and lending in the United States, underwriting policies have significantly influenced the appraisal process for home purchases and refinances. Appraisers must follow underwriter appraisal review guidelines meticulously to ensure their appraisal reports are accepted by the lender. Unfortunately, in the past, these policies became the basis for redlining, wherein certain communities were systematically denied access to mortgage credit. In this article, we delve into the historical context of underwriting policies and their influence on the appraisal...

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

Federal Officials Team up with Freddie, Fannie to Deceive Investors | The Censorship of Appraisers 34

The Censorship of Appraisers

Thirty-seven hours after President Biden took the oath of office, White House officials met with executives at social media companies. The officials threatened restraint-of-trade lawsuits and regulatory action if the companies failed to censor what the White House deemed “misinformation.” In a parallel development, we can now connect the dots that similar talks occurred among White House officials, employees of government-sponsored mortgage giants Fannie Mae and Freddie Mac and private vendors to throttle the protected speech of individuals and firms in the mortgage industry engaged specifically for their independence. The latter serve as bulwarks in federally backed mortgage transactions. In...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Federal Housing Finance Agency / FHFA

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