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...
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...
“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...
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,...
…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...
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...
Mass Appraisal tend to exhibit a regressive nature… In the intricate landscape of real estate mortgage financing, the notion of appraisal waivers recently dubbed “Value Acceptance”, by the Government Sponsored Enterprises (GSEs), has stirred considerable debate. The most recent statistics show Value Acceptance accounts for up to 40% of all mortgage approvals. It is presented as part of the GSEs “Appraisal Modernization” initiative, which aims to streamline the mortgage appraisal process. However, a closer examination reveals potential drawbacks, raising questions about its efficacy and impact on the housing market. Despite its roots in a methodology designed to support appraisers, Value...
Fannie Mae and Freddie Mac have issued a clarion call to all appraisers to pitch in and help build the gallows from which they will hang us all in 2025. The mission is to “modernize” the appraisal profession into a skeleton crew of compliant zombies who will be rubber stamping appraisal reports for $25 each (Source: Voice of Appraisal) from the dark confines of their private offices. “Grab some nails, get your hammer, pick up that saw and let’s build a new gallows… I mean model, that gives lenders everything they want and need to inflate the housing market into...
Appraisers, to see more about the upcoming new UAD currently in design, read the Updated Timeline link in the message below. My concern at this point is ‘training’ materials will be available in Q4 2024, but actual implementation of the ‘new reporting process’ won’t begin until Q3 2025 with limited production, into 2026. Note that in the future “form numbers” won’t be used. Instead, the assignment instructions will be based on a scope of work for the loan process on the particular Subject property. As someone who’s potentially interested in ‘training’ appraisers on the new process, it seems to me...
As long as the new normal is reporting the appraiser when you don’t like the value continues, why bother? In today’s new and unimproved appraisal atmosphere, any appraiser that does not “hit the number” is open to detrimental consequences. Buyers, Sellers, & Refinancers – The U.S. Government from the top down have provided the media and the public in general with so much toxic misinformation and encouragement that any appraiser doing their job, a job that can lead to lower values than expected, can now be turned to HUD itself, or a state appraisal board for racial bias. So, why...
