Escaping the Black Hole: Appraisers Fleeing Mortgage Lending

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 the homeowner, or was the appraiser grossly incompetent in how comparables were selected and used in the report, which lead to a “lower than expected” valuation?

We’ll probably never know, as these settlements are sealed and the parties agree to non-disclosure of the details. But because the financial settlement involved both the appraiser and the lender, the implication is that discrimination did occur, and thus, the perception is “appraisers are bad apples.”

That, by the way, is the actual charge in the political party’s “platform” that was written half a decade ago that most of the current players in this overarching drama subscribe to. Before you challenge me on this, go read it.

The allegations in that “platform” have morphed into direct statements in the way these situations are presented in the media and elsewhere. Climbing out of that black hole is nearly impossible. It’s one reason why many appraisers are vacating mortgage lending appraisal assignments. Best wishes to you if you are still doing those.

An East Oakland homeowner has reached a settlement agreement with a California appraiser and a mortgage company…

The name of the mortgage company was not publicized as a part of the terms agreed to in the settlement. The homeowner asked ABC7 News not to share her identity…

The lender and the appraiser both deny wrongdoing, but agreed to make sweeping changes to their business practices, according to the release from FHANC.

Dave Towne
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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23 Responses

  1. Avatar Spencer Paul says:

    How do you admit no wrong, but make sweeping changes?? The change in and of itself suggested that something was wrong with your process, does it not?

    6
    • Avatar KK Schware says:

      That original article in question in itself sounds like it was biased against the appraiser and lender. Changes, probably. “Sweeping?” I call bullshit. Appraisers are bullied into complying and bullied into agreeing to some form of ‘change’ so that the bigshot can say, ‘Hey, look, I earned my keep and did something.”. Such as a huge list of words we can no longer even say in an appraisal. I had a home on a street named Old route 22. I was ‘spanked’ because I am not allowed to use the word ‘old’ in my appraisal because it shows bias.

      9
      • Retired Appraiser Retired Appraiser says:

        Vintage Route 22 perhaps?

        I was a biased appraiser for 20 years.. always partial to my own opinion of value.

        5
    • Avatar Patrick Cadarette says:

      I dare to say when someone has a gun to your head you will pretty much say and do whatever you need to prevent them from pulling the trigger. That’s what bully’s do when they have the gold, they rule. I’m not supporting or defending anyone just bringing to light the reality of the situation.

      2
  2. Avatar KK Schware says:

    Was there any actual hard proof or data provided as to what actual fair market value was? People who own a home and are untrained and uneducated in valuation and make a biased wild guess as to their home value should not be assumed to be better at appraising than an actual professionally trained appraiser. “Low ball” is a bullshit term that in nearly ALL cases simply translates to ‘I did not get my way so I wanna to fraudulently get people in trouble.” Can an appraiser fall victim to human error? Of course; we are human. Hundreds of thousands in impact from an small error? Unlikely. And is that the norm? Absolutely not.

    6
  3. Baggins Baggins says:

    The settlement included that if someone disagrees with value, appraisals will be reviewed by a different appraiser. Prior to ‘appraisal modernization’ (aka computerized automation) and before appraisal management companies, that used to be a standard lender process, to order field reviews from other appraisers. Bifurcated appraisals are harmful to home owners, as the appraiser knows far less about the home than having been there in person. AI editing and blurring books on shelves? Like appraisers are zooming in on photos of book shelves; Dammit, they are not allowed to have that book. Heretic! AI systems are more likely to make that kind of judgment than a human appraiser is. Guilty until proven innocent; Lawyers win again.

    6
  4. Baggins Baggins says:

    Image.

    3
  5. Maybe not same case. Robinson appraiser is TK. One in PR is MU. Someone just told me it was this case which I wrote an article about July 2021. Same reporter. Same Fair Housing group. It’s in East Oakland. Same black senior single mother. Same home that needed lot of work. Similar values, dates. I believe the first appraisal.The property needed to be fully, fully renovated. It was also in a different neighborhood than the higher comps. The area is being revitalized but not where this home is located. Second appraiser used comps of fully renovated homes in an area which sells for a lot more because it’s revitalized. If the appraiser had a free attorney like the Plaintiff, appraiser would have won. He caved and settled because of cost and harassment. The private housing organization uses their donations like a club to hurt people for media attention and to get more donations. https://mary–cummins.blogspot.com/2021/07/racial-discrimination-alleged-by-cora.html

    All the main bias cases are similar. They are a home with condition, size issues located within a mile or two of an area which sells for much more. It has nothing to do with race or color. A white owner of the same home would get the same exact value. I have now valued four of these homes in these cases. The lower appraisal is correct.

    7
  6. Avatar JC says:

    Why is the appraiser of the lower opinion either biased or incompetent? I realize there are incompetent appraisers, like there are incompetent people in every profession, but there are a TON of number hitters and incompetents that will opine too high as well. For some reason the higher the number the more correct the appraisal and the more competent the appraiser.

    6
  7. Avatar Bob Ipock says:

    Who knows? They may have settled for $10,000 or $100,000. What loss did they suffer? How much did it take to solve the issue?

    2
  8. Avatar Steve Maher says:

    Appraisers it is time to strike! do non-lending work only.

    6
    • Avatar PD says:

      Ah, yes, this is music to their ears……

      1
    • Avatar Flash says:

      Or Just Change your business plan completely. 99 Percent of my work in Non Lender Appraisal Reports. My Original Plan Never included Management Companies that popped up over the last 15 years. Have been in the Appraisal Business before licensing and listing and selling Real Estate since 1980 to the present. Work your plan and Plan your work, or someone else has a plan for you. Currently i am renewing my Appraisal License in California for the last time.

      3
      • Baggins Baggins says:

        And what about the rest of the country and all the Americans being lined up like easy targets?

        2
        • Avatar Flash says:

          The Article heading is Escaping the Black Hole: Appraisers Fleeing Mortgage Lending.

          In keeping with that thought and premise is what I was responding to.

          The Reality is the entire Real Estate Industry Sales and Appraisal Sectors are being attacked by AI, lawsuits and attorneys.

          Why???

          Because Real Estate Brokers, Agents and Appraisers are just low hanging fruit with Errors and Omissions Insurance for Attorneys.

          Brokers, Agents and Appraisers are connected to this Grand Scheme of Real Estate.

          As for what reasons the Americans are easy targets or people in general I suggest Reading the Book “Please Understand-Me written by David Keisey Phd either Vol 1 or Volume II to see that there are 16 Different Personalities and 4 different temperments in the general public.

          Most Lawyers know there are 16 different personalities and 4 temperments which just keeps them busy in litigation.

          2
  9. Avatar Howard Wettreich says:

    In order for an appraiser like you and like me, to believe or determine if an appraisal reported in any media, was biased or incompetent, can only be done if an appraiser like you or me has a copy of the that appraisal report. Or, if more detail was reported identifying the bias or incompetence purported. It doesn’t help other appraisers from avoiding the pitfalls of what is considered bias, never mind words. I think we all know what’s considered incompetence. Does anyone know where I can get a copy of a redacted report that was the subject of a lawsuit implying bias or incompetence? So curious.

    2
  10. Avatar Mat J says:

    The lawyers charge so much that its best to settle.

    1
  11. Stephen Reynolds on Facebook Stephen Reynolds on Facebook says:

    I’m surprised these cases are all settling. I’m guessing they are settling for small dollar amounts and it’s not worth trying them.

    3
  12. Avatar KK Schware says:

    The cases I’ve followed, E & O companies refuse to support the appraisers to allow themselves to see it through and force the appraisers to settle. They refuse to pay for a long, drawn out legal battle.

    2
  13. Baggins Baggins says:

    https://drive.google.com/file/d/1PQ_nHin4ZOmuZj_HUQCS1q4qhebh3vue/view

    CO repeated alert on fraudulent land sellers. Things scammers do. Anything sound familiar? In person communication not allowed. Remote not local companies are required to be used. Refusing to accept the services of local licensed professionals. Digital only patterns of engagement. Personal visitation of the property not allowed. Anonymous requests not specifically signed.

    Suggested anti fraud actions from DORA the Division of Regulatory Agencies; Meet the people in person, and view photos of them. Insist on in person inspections. Take the time to verify data with associated organizations like HOA’s. Ask personal questions. Take the time to talk with neighbors.

    Houston, we have a problem.

    2
  14. Avatar Tick Tick Tick says:

    Unfortunately, some of the tools used to oppress appraisers doing mortgage work, or at least somewhat similar tools with similar devastating effects will be coming to nearly all facets of appraising. One doesn’t have to think real hard how these could be implemented for eminent domain, legal and even estate work, and beyond. So these various non-mortgage appraisal safe havens will be short lived.

    0
  15. Avatar jaydee says:

    Low ball appraisal? There is no such thing. An opinion of value differences from the home owner their attorney and the professional in the field the appraiser. Was a field review accomplished? If not, why not? Almost glad I had a tumor in my head and was forced to retire.

    0

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Escaping the Black Hole: Appraisers Fleeing Mortgage Lending

by Dave Towne time to read: 1 min
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