Fannie Mae Filed a Complaint Against Me

Fannie Mae Filed a Complaint Against MeAn appraiser shared the following with us which was posted on one of the appraisers’ groups.

Fannie Mae filed a complaint against me with my state appraisal board. Here’s what happened.

The Report

In June of 2021, I completed an appraisal for a conventional purchase. The appraisal was ordered by an AMC on behalf of a lender. At that time, the real estate market was still being wildly affected by the COVID pandemic. Remote work was in full swing, and consumers were desperately seeking to get out of the cities. Prices for all types of residential properties were rising rapidly, and this held especially true for niche properties that consumers believed would make a good short-term rental.

My subject was a mountain cabin, in reasonably close proximity to a National Park. This approximately 900sf, 1.5 story, 2-bed, 1-bath cabin was situated on a critically sloped 2.5 acres of wooded land. This is not unusual at all. Many similar properties exist, but they are spread across a wide area. The inspection was uneventful. I was given a lockbox combination and inspected the vacant home. It was unremarkable. A basic Q4, C3 home.

I completed the appraisal, selecting comps with the same market appeal. It’s important to keep in mind that the primary market for the subject is as a second home. A “getaway” would be an appropriate term. Most consumers would not seek out the subject for full time residency. With limited data, I selected similar comps, three within five miles of the subject, and two from farther away (15-20 miles), but within the same niche market, and clearly substitutes.

The subject exists in a heterogeneous market. All of the properties are somewhat unique, and larger adjustments are required than what would be expected in more suburban/homogeneous markets. Still, I had good market support for every adjustment made. None of my adjustments were arbitrary. The pre-adjustment spread between the comps was about 52%. The post-adjustment spread was about 15%. While this is wider than what is ideal, it was the best possible (supportable) with the available market data. A standard deviation plus or minus the median post-adjustment prices left the contract price pretty in the middle of the range. So, the contract price is where I reconciled the opinion of value. I delivered the report.

Revision Request

Five days after the report has been delivered, I received a revision request. The AMC stated that the lender indicated the appraisal received a high risk score by Fannie Mae. Fannie Mae provided two sales and two listing based on their “model”. In addition to the sales provided by Fannie Mae, I was asked to provide at least two better comps. As anyone who has been an appraiser for more than five seconds can attest, you use the best comps available. There were no “better comps” to be used.

As for the comps provided by Fannie Mae, this is what they suggested to be used as comps for the mountain cabin described above: A partially constructed home on 44+ acres, an attached home in a 55+ community, and two homes in a nearby town (suitable for primary residency). No one shopping for the subject would cross-shop ANY of the suggested comps by Fannie Mae’s model. I responded kindly, and in depth regarding each of the suggested sales as to why they were inappropriate for inclusion. I also addressed the fact that the comps already utilized in the sales comparison approach were the best available. I submitted the response.

Repurchase Demand

In June of 2022, one year after completing the original appraisal report, I received an email from the AMC stating the lender had received a repurchase demand from Fannie Mae. The demand letter cited an accounting error during the origination of the loan (not an appraisal issue) and the appraisal as the reason for the buy back. This was the first time I had ever experienced this problem. None of their comments seemed to make any sense. I had a terrible time understanding why this appraisal was such a problem for Fannie Mae. I have attached the Fannie Mae comments and my responses below. I have redacted the areas that could reveal sensitive information.

Fannie Mae Comments

Fannie Mae Comment: Comparable Sale(s) Physical Features Reported Inaccurately – Condition / Quality of Construction – Fannie Mae’s Selling Guide states that it is an unacceptable appraisal practice if there is a misrepresentation of the physical characteristics of the subject property, improvements, or comparable sales. The appraisal did not accurately reflect the physical features of comparable(s) two and three. The appraiser reported Q5 when evidence obtained from public records (exterior/interior photos) indicated Q4. See linked document labeled Defect Support Doc Value.

Response: A property with a quality rating of Q5 is defined as: Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades. Comp 2 with its basic A-Frame design, small economy windows on most of the home, cheap, low-quality paneled walls, basic and quite limited cabinetry and countertops with the only appliance in the kitchen being a range-oven, and barely functional bathroom due to its basic, economical construction, functional utility problems, and basic electric baseboard heating with no air conditioning, falls well within the definition of a Q5 quality rating.

The definition of Q4 is defined as: Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship, finish, and equipment are of stock or builder grade and may feature some upgrades. Comp 2 does not exceed the requirements of local building codes, and little to no exterior ornamentation or refinements. The interior refinements are non-existent. Stock/builder grade materials would typically include the use of drywall (Comp 2 has cheap panels), a substantially larger kitchen (Comp 2 only has one, small section of low-quality countertop and a range-oven as the only appliance), and a bathroom tall enough that individuals 6′ tall could stand up straight in more than half the room. (Comp 2 is limited in this way). It would be misleading to label Comp 2 as a Q4 based on the definition as it clearly meets the definition of a Q5.

Considering the same definitions above, Comp 3 was constructed with economy of construction and basic functionality as the main considerations. The ceiling consists of raw plywood. It uses basic, electric baseboard heating with no air conditioning. A portion of the home is on piers instead of a concrete foundation, and there is no fenestration or exterior ornamentation. While the condition (not to be conflated with quality) of the home makes it look “shiny”, its overall quality closely correlates with the definition of a Q5 home. It would be misleading to label Comp 3 as a Q4 based on the definition as it clearly meets the definition of a Q5.

Fannie Mae Comment: The following are considered unacceptable appraisal practices: 1) use of adjustments to comparable sales that do not reflect market reaction to the differences between the subject property and the comparable sales, 2) not supporting adjustments in the sales comparison approach, and 3) the failure to make adjustments when they are clearly indicated. The lender must also thoroughly review the “sales comparison analysis” adjustment grid. The lender must ensure there are no calculation errors and that substantial adjustments are addressed in the appraisal.

Failure to Adjust Comparables

Use of adjustments that do not reflect market reaction to the differences between the subject property and the comparable sales, not supporting adjustments and failure to make adjustments are considered unacceptable appraisal practices. The subject property was C4 while comparable sales one, three and four were C3. Based on our research, the appraiser should have made an adjustment for the difference between the subject and comparable sale(s).

Response: This statement is inaccurate. The subject is, and is reported as being, in C3 condition. The adjustments are made consistently and appropriately based on sensitivity analysis as described in the summary of the sales comparison approach, which is located in the supplemental addendum.

Fannie Mae Comment: Inadequate Comparable Adjustment(s) Use of adjustments that do not reflect market reaction to the differences between the subject property and the comparable sales, not supporting adjustments and failure to make adjustments are considered unacceptable appraisal practices. The appraiser made positive [redacted] adjustment(s) for date of sale/time to comparable sales two, three and four, respectively. The adjustment(s) were excessive based on our research.

Response: The market data was thoroughly vetted in the original appraisal. Only properties competitive to the subject in its unique, niche market were utilized. I cannot comment on what research was conducted by Fannie Mae as no supporting evidence has been provided the give any indication that the adjustments were excessive. $/Sqft in competitive properties rose sharply over the 12 months preceding the effective date of the appraisal. I emphasize competitive because the subject exists in small market of properties which appeal to consumers as second homes. Comparing the subject to properties that mainly compete as primary residences would skew the data, and not accurately represent the market for the subject. When plotted and a trend line applied, the rate of change in the market is clearly visible and well supported (See graphic below). The amount of the adjustment is derived directly from the market data. It is important to note that the competitive niche market of the subject is rising faster than what is generally expected of typical single family housing in surrounding markets. All of the conclusions developed in the appraisal are well supported. [chart showing the actual data redacted]

Fannie Mae Comment: Inadequate Comparable Adjustment(s) Use of adjustments that do not reflect market reaction to the differences between the subject property and the comparable sales, not supporting adjustments and failure to make adjustments are considered unacceptable appraisal practices. The appraiser made positive [redacted] adjustment(s) for quality of construction to comparable sales two and three, respectively. The adjustment(s) were excessive based on our research.

Lenders are responsible for the accuracy and completeness of the appraisal and its assessment of the marketability of the property and must take appropriate action to ensure that appraisers do not engage in unacceptable appraisal practices, including, misrepresentation of the physical characteristics of the subject property, improvements, or comparable sales.

Response: The adjustments for quality are reasonable, appropriate, and well supported utilizing sensitivity analysis. The difference in quality between Comp 2 and Comp 3 when compared to the subject is substantial. Consumers in the market are well aware of this and act accordingly. It is the reaction of market participants that drives these large adjustments. I cannot artificially make a smaller adjustment because they appear large when compared to other markets. To do so would be misleading to the intended user(s) of the report. While I cannot comment directly on the research conducted by Fannie Mae, I can say that all of the comparables I have utilized are directly competing with the subject property, and appeal to the same market.

Fannie Mae Comment: Subject Physical Features Reported Inaccurately – Condition/Quality of Construction Fannie Mae’s Selling Guide states that it is an unacceptable appraisal practice if there is a misrepresentation of the physical characteristics of the subject property, improvements, or comparable sales. The appraiser inaccurately represented the condition and/or quality of construction of the subject property as C3 when evidence obtained from the appraisal (exterior/interior photos) indicated the subject property was C4.

Selection and use of inappropriate comparable sales and failure to use comparable sales that are the most locationally and physically similar to the subject property are each considered an unacceptable appraisal practice. The lender must ensure that the appraisers analyze listings and contract sales, closed or settled sales and the most recent and similar sales available as part of the sales comparison approach.

Response: This statement by Fannie Mae is inaccurate. C3 condition is defined as: The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained. Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is being well maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of short-lived building components have been replaced but not to the level of a complete renovation.
The subject fits well within the C3 definition. The subject is well maintained, it’s effective age is lower than its actual age, and there is no deferred maintenance.

C4 is defined as: The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate. Note: The estimated effective age may be close to or equal to its actual age. It reflects a property in which some of the short-lived building components have been replaced, and some short-lived building components are at or near the end of their physical life expectancy; however, they still function adequately. Most minor repairs have been addressed on an ongoing basis resulting in an adequately maintained property.

The subject is in superior condition to that of a C4 home. C4 deferred maintenance and physical deterioration that makes the subject effective age close to it actual age. There is none of this. The subject much more closely resembles a C3 home based on the definitions.

Fannie Mae Comment: Use of Physically Dissimilar Comparable Sale(s) – Gross Living Area Fannie Mae’s Selling Guide states that comparables that are significantly different from the subject property may be acceptable; however, the appraiser must describe the differences, consider these factors in the market value, and provide an explanation justifying the use of the comparable(s). Appraisers must use comparable sales that are the most locationally and physically similar to the subject property. Comparable sale(s) one was superior to the subject property in gross living area. The subject had [redacted] square feet while comparable one had [redacted] square feet. The appraiser has not provided an adequate explanation why the specific comparable(s) was used.

Response: Comp 1 is a good substitute for the subject when all on the units of comparison are given consideration. It is the same quality and condition as the subject, it is close to the same age, the site size is reasonable similar, and is it the most recent competitive sale to the effective date. Above all else, even though it is a superior property (including GLA), it appeals to the same market. The same consumers that would interested in purchasing the subject would absolutely cross-shop Comp 1.

The Complaint

In late November on 2022, I received a notification from the state that a complaint had been filed, and a case was being opened. I was required to submit written responses to investigators regarding the allegations. A copy of the email sent from Fannie Mae (note that no actual person signed it) to the Appraiser Board read:

Attn: Real Estate Appraiser Board

The Fannie Mae Loan Quality Center has recently conducted a review of the attached appraisal report and concluded there were substantial errors which lead to a non-credible result. To support your state’s efforts in ensuring compliance with professional appraisal standards, this appraisal report is being provided to your agency.

The appraisal report was completed by: [redacted]
License/Certification Number: [redacted]
Property Appraised: [redacted]
Effective date of the appraisal: [full date redacted: June 2021]

The following issues were identified by Fannie Mae:
Failure to Adjust Comparables
Inadequate Comparable Adjustment(s)
Comparable Sale(s) Physical Features Reported Inaccurately – Condition / Quality of Construction
Subject Physical Features Reported Inaccurately – Condition/Quality of Construction
Use of Physically Dissimilar Comparable Sale(s) – Gross Living Area
Any investigation or action is at the discretion of your agency.

Inquires or questions may be sent to this email address:
[email address redacted]

Loan Quality Center
Fannie Mae

The first thing I did when receiving the notice was to pick up the phone and call my insurance provider. They are excellent, and have given me sound advice in the past. I left a message for their legal department. While I was waiting for a return call, I read through my policy documents to know what I could expect in the way of coverage. It turns out that my insurance company was a great resource, in not only providing context for what may have (actually) led to the complaint, but also by informing me of what the process would be like, and providing me with a number or resources to help get me through to process.

After informing my insurance provider, I responded to the allegations. It was more or less a copy/paste of my rebuttal to the repurchase demand. If I had never received a copy of the Fannie Mae letter to the lender, there would have been little, if any, context for the complaint as it was emailed to the state. I was glad to at least have some context.


Beginning in late January of 2023, I began to receive phone calls and emails from the state investigator. She was pleasant and professional. She was tasked with preparing all of my factual information. Was I licensed? Was the company I worked for licensed? For how long? All of the factual items were being assembled. We went back and forth through March of 2023.

In late June 2023, I received a letter from the appraisal board stating that I was to attend an “informal fact finding conference”, scheduled for the end of August 2023. I called my insurance company to inform them of the unfolding events. My contact at the insurance company was surprised that the complaint was not dismissed. She, and an in-house reviewer had looked at the appraisal and did not anticipate any problems. I was told that I would be provided with an attorney to help me with the process.

In early August, I was introduced to the attorney who would be assisting me with this process. I provided her with all of the information, and she hired another appraiser to review my appraisal. The next time I spoke to my attorney was a few days before the informal fact finding (IFF) conference was scheduled. She had received the results of the appraisal review and it left all of us scratching our heads. The overall findings were that the report was good overall. The reviewer said he might have done a few things differently, but he could not cite any specific problem that should result in disciplinary action by the board.

The day of the IFF conference, I arrived and met with my attorney and the appraisal board administrators. It turns out the this “informal” conference is anything but informal. A conference room is setup like a courtroom. One table in the front with a board member sitting, facing the rest of us. Two more, offset to the left and right for the administrators reading my charges, and my attorney and I. More tables were behind us, filled with new staffers to observe the proceedings. A stenographer was in place to generate a transcript of the meeting.

We began by a reading of the charges. I was asked to respond to each one. I started to read from my prepared statements, when I was interrupted by the administrators. Turns out, they just wanted me to refer to my written statements, and make sure they were submitted for the record. After this, it was finally time for the lone board member to ask me some direct questions.
He asked me to start by explaining to him what process I used to select my comparable sales. I did. He then asked me if, to the best of my knowledge, anyone from Fannie Mae had actually inspected the subject. I responded that to the best of my knowledge, no one from Fannie Mae inspected the property. He then asked me to elaborate on what qualified me to appraise properties of this type.

This question was the open ended opportunity one can only hope to be given in this situation. I described how a large part of my appraisal practice is unique properties. Properties that consist of odd designs, houses on top of stables, properties with easement, encroachments, and all manor of complexities. I concluded by stating that the subject was one of the more “normal” properties I have appraised.

At this point, he leaned back in his chair and said “I’m just trying to figure out why Fannie kicked this one back to us”. The conference ended a short time later. Both the attorney and I felt comfortable with the line of questioning that had transpired. I was confident that I had answered them to the best of my ability. Still, having never gone through this process before, I couldn’t help but wonder what a deep dive into my report would reveal. I was kept awake at night re-reading the report in my head trying to think if there was anything I had missed, and could have done better. At this point, it didn’t really matter. I was simply waiting for whatever was next.

The Recommendation

In late September 2023, I received some good news. The appraisal board member that had conducted the IFF conference had issued his recommendation of finding no violation on any of the counts. I spoke to my attorney, who informed me that the next step was for this recommendation to go before the entire appraisal board in a public meeting. At that time, they would vote on whether or not to accept the recommendation, or to take other action. The meeting was scheduled for mid-October 2023. Needless to say, I felt a little better. Still, when discissions are made “by committee”, you never know what the outcome will be. I waited for the public hearing.

The Public Hearing

On a cool fall day in mid-October (today), I drove to attend a hearing that could have serious implications for my career. If I were to suffer a disciplinary action, I could not have a trainee for a period of three years. My current trainee would be out of luck, and I couldn’t stand the though of having to tell him to find another supervisor. Additionally, while my insurance provider had assured me I would still be coverable if I was found to be in violation, I did worry about the ever increasing expense load of staying in business. Only time would tell how this was gong to go.

The meeting started, and I heard the cases go through one by one. There were about a half-dozen cases in front of mine. Some were interesting. The man in front of me was fined $2,000 and his license put on probation after having been found in violation of USPAP. Then came my turn.

My attorney and I sat in front of the board and administrators. The chairman informed me that both us could speak for up to five minutes. At the advice of my attorney, I simply stated that I had nothing to add, but would be happy to answer any questions they had. With no questions being raised, a motion was made to accept the recommendation of a finding of no violation. With a quick second, and a unanimous vote to follow it was all over. Two and a half years after I wrote the report, I was finally in the clear.

Final Thoughts

This was a stressful process. An appraiser’s entire career could be upended by one of these complaints. After responding to the repurchase demand, I worried I had really done something wrong, and was too ignorant to know what it was. After I received the complaint, the more I thought about it, the more it bothered me. I know that all of us appraisers should be able to defend our work, and not take things like this personally, but I did. I still take it personally.

After reading Jeremy Bagott’s letter “INSIDER: FANNIE’S LOAN BUYBACK SOPHISTRY RELIES ON MODIFYING ANALYSTS’ BEHAVIOR” posted on October 13, 2023, I knew exactly how this complaint came to be. This complaint, which has sought to drag me through the mud for the last year and a half, appears to be for the sole purpose of satisfying Fannie Mae’s quota of complaints. Furthermore, it is clear that the Collateral Underwriter software (if indeed that is what was used in Fannie Mae’s “model”) is placing emphasis on garbage comps, and no human is actually reviewing them. Or, if a human is reviewing them as the article states, Fannie Mae is incentivizing the reviewers to side with their software instead of actual people.

I have loved being an appraiser. It was a really cool job. I will continue to be for a least as long as it takes to finish my obligation to my trainee. But, I no longer really enjoy it. Every property I look at, I wonder what problems it will bring, instead of being excited to solve the puzzle. I find myself actively looking for other opportunities to use my skillset. I don’t know what the next chapter of my professional life will be, but I suspect writing appraisals won’t be a part of it.

I know many of you are suffering the same problems. Even if the fees get better (I charged $2,000 for the appraisal that was subject to this complaint), it’s still not worth the headache of one of these complaints. I wish all of you the best, and I hope you have positive outcomes in your pending cases. As for the rest of you, continue to advocate for your profession. Write your congressional leaders, your senators, and your state boards. Advocate for appraisers now, while we’re still here.

Image credit flickr - Dave Parker


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39 Responses

  1. Avatar Kimberly DeFilippis says:

    Thank you for this very long and very informative post. It accurately reflects what happens when an appraiser is thrown under the bus by a faceless entity who does not have to defend their allegations to anyone. I will no longer do any work involving FannieMae or FreddieMac. I continue to do work for FHA until I decide its not in my best interest. I am seeking private work and its an arduous task. I spent over a year stressing over a baseless complaint to my state board from a disgruntled seller who accused me of racial bias because I appraised his house at market value and not the selling price. The state regulatory agency took 14 months to make the decision that I had done nothing wrong. In the meantime, interest rates rose, AVMs and Robo-inspections became commonplace and the career that I was proud to be a part of, a career that supported me for the last 18 years is now defunct. All because lenders and the crooks at FNMA have decided they don’t need to justify their lending decisions. FNMA is under receivership. Remember, it is not a government agency. At age 65 I am pursuing other avenues of income. I have lost thousands of dollars over the last year and life as I knew it is over. In retrospect, I wish I had seen the signs earlier. The current appraisal environment for home loans has been totally dismantled and re-assembled with left-over parts. Appraisers are those extra parts. The lending machine appears to run more efficiently at first, but loses steam and money over time, breaking down quicker than anyone will anticipate. When the shit hits the fan this non-government agency will have to answer to nobody. Like an oligarch. Welcome to the new world order.

  2. thank you for sharing this story, and it is a cautionary tale but does make me wonder if there is any recourse for appraiser’s that are falsely accused? there should be, the appraiser is clearly experiencing some PTSD, and lost a lot of time over the past year, not to mention money. Why? for what? so FNMA can meet some arbitrary quota? a counter suit seems appropriate, especially since the State regulator was ‘surprised’ Fannie kicked the file back to them. A reward of damages seems reasonable.

  3. Jacob Landfair on Facebook Jacob Landfair on Facebook says:

    It is truly evil how FNMA has decided to carry out these complaints to destroy peoples lives. I think most of the boards realize what’s going on and are dismissing these complaints but not all. Chase did a similar thing in 2008, more than half of all complaints were from them and the same is likely true of FNMA.

    • Avatar Eric Kretz says:

      Chase did the same thing to me in 2008 as well. It was a very stressful process, but I was able to see the review performed and talk to the people at Chase and went much smoother than what the OP went through.

      I fear these buybacks are going to come rolling over the appraisal industry over the next few years. One would speculate that they are pushing this action to further drive appraisers out and rely on AVMs and hybrid/desktop products. Are they under-capitalized? Does FNMA need the money that bad for buy-backs? I’d love to hear their honest answer.

      Another nail in the coffin…

      • Baggins Baggins says:

        Eric, interesting. There was some financial news the other day describing how the capitalization process was shaking out. There is so much money floating around, it just took time before re capitalization under current market conditions would be necessary, and that time is now upon us. And now with the cost of money being more expensive, it’s getting really difficult for some lenders to acquire the new monies. Being that all of them are actually broke, lending on a fractional reserve system where the entire show is predicated upon credit and a debt based money system. Think jumping cd rates in the scramble to bring those dollars back to the bank.

        One additional interesting take was that as the various financial players re capitalize for future efforts, they are getting stressed due to the volume of low rate long term 30 yr mortgages they’re holding in the 3% range and there abouts. So now that the frenzy of origination and commissioned fees are over, they want these off the books because each and every one of them is costing more to service than they bring in, in terms of equivalent net income. They’re paying to provide servicing on productive loans… So it’s therefore not surprising that write downs and loan relief programs are also being de prioritized in favor of repurchases, or repossession if the lender is lucky enough to be able to pursue a foreclosure scenario.

        Which takes us full circle right back to the big ibuyers and hedge funds, mega investors, getting special favors from the GSE’s where they receive first purchase opportunities at special discounts which normal regular level investors can’t even access. Why in many places mom and pop fix and flippers are already dried up piles of bones in the desert without a single regular town home or suburbia house reo to make a play on. Word on the street is the managers are bundling the defaults and offloading them all at once to these investment companies whom hold them as reits. It’s the win win for them, lose lose for the citizens. They can artificially prop up price and rental markets, while not having to be responsive to shifting market conditions. Meanwhile; Brookings, pave, and racially focused politicians keep blathering on about how appraisers are responsible for with holding generational wealth from the people. Wizardry, as they use a complex non transparent approach to defaulted and under performing loan positions, in order to channel special favors up the ladder, while simultaneously protecting their own investments. Genius really. An agent told me the other day a big investment firm offered her a 200 homes lawn mowing opportunity. And that’s just one example of how many units are floating around behind the scenes, which they no longer order appraisals on, and will not be present this time around as discounted purchase opportunities for economically challenged people to try and pick up an affordable home deal. That’s what some say on the internet, and I believe them. I think we just came full circle with Mr Bagotts whistle blower article. Indeed.

        • Avatar Eric Kretz says:

          Holee Sh!t my mind is blown. I’ve known it could be complex but never thought about the big string pullers off loading the underperformers and REO’s to mega investors. That seems completely realistic in the current lending environment. My AO has had a steady stream of mom and pop flippers for the past 20 years and that has all gone away. Lots of locals become realtors for the data to cash in on the fix/flip industry, and they are gone too.

          I think that the take on servicing the low rate loans being less profitable is an interesting one. Some local CO banks and CU’s often service their own paper and I wonder how their balance sheets look. They’ve gotta turn that money 3 times a year and that would be tough at lower rates.

          Once again, very well written an though out Baggins.

          More to ponder over a whiskey and cigar.

          • Baggins Baggins says:

            Thanks. Yeah, because the lowly appraisers, all these ancillary companies just scheming how to provide a service and make a buck. They’ve identified appraisers are easy sells for all this automation, because; more volume more profit. So they do what they are good at, providing automated tools. Yet all these providers themselves do not understand the bigger picture, GSE lending is government backed for the very purpose of providing access to more citizens, hence the consumer protection tie ins and oversight. Even though the lender is our client, if we are performing GSE appraisal work, we have a duty of care to consumer protection principals as well. Which is why three out of four appraisers refuse amc service and appraisers like myself continue to argue for the complete dismantlement of the amc industry, and against all these appraisal modernization efforts, in the interest of general consumer protection. GSE managers these days are no longer in alignment with the mantra of this institutions original charter, they’re just doling out favors in order to partake in the revolving door system of acquiring more lucrative jobs at a later date.

            History repeats as the bubble bust cycle continues. Like moths to a flame, the people continue to float back, enticed towards the alluring free lunch and money for nothing promises. Yet, there is always a price to pay. Or in historical terms; rampant speculators gambling with our money.

            Try my brands;
            Every weekday at 9am mst, Patriot Trading Group news hour.
            Every Friday; Financial fridays.

        • Avatar Mark Davis says:

          You nailed it again, Baggins. These endless examples of isolated events revealing financial injustice are looked at as collateral damage by the elite in the implementation of their Grand Plan. The Great Reset with CBDCs is the “smart guys'” exit strategy to cover for the inevitable collapse of the international banking system’s fractional reserve banking scheme they know is coming. The puppet-masters (we have a government of the bankers, by the bankers and for the bankers) justify (to their consciences, as they don’t care about the little guy) their exploitation of the masses with the goal of global governance to usher in a communist utopia. The globalists are purposely undermining national/localized governments, cultures, and societies in order to consolidate power under the UN. The situation for most people will get worse before it gets better, but the people in the USA, and most of the world, will be better off when the United States Imperial Federal Government (biggest, most powerful government in history) goes bankrupt because we will then have an opportunity for the States to split up into smaller political units that revert to the original Constitutional principles that the USA was founded on. The elite are running this gambit on the assumption that most people will beg the UN to save them from their incompetent national governments when the collapse bankrupts every government on Earth. I hope that the people of the USA haven’t become such gullible cowards that most go along with what will likely include a referendum with UN officials counting the votes. This was the original purpose of the Second Amendment. A free-market voluntary society with no political masters would be ideal, but people aren’t ready for it. This will be a step in the right direction, though.

          • Baggins Baggins says:

            Thanks. Our wish is to save the republic and be left alone. It’s all the people whom fell into the debt traps that lost their ability to simply say no. There is no greater objection than absence.

  4. Heidi Ford on Facebook Heidi Ford on Facebook says:

    This is your basic nightmare. Could happen to anyone.

  5. Avatar CB says:

    Thank you for telling your story, even if it is one that will give chills and nightmares to those of us conscientious appraisers left standing. I feel for you deeply on this, it brings back memories of the sick to the stomach stress I went through during my State complaint. Mine was a disgruntled buyer, upset that their closing was delayed by 2 days. They were not my client, and there were no complaints with the appraisal report itself, only that it was “late” for reasons outside of my control and the AMC rolled me squarely under the bus. The buyer filed a complaint with the state board for “my” unprofessional conduct. Luckily my report and workfiles were rock solid and I had the fully documented chains of communication of my efforts to expedite the appraisal, and notifying the AMC at every step of the delays I had encountered obtaining needed information. All during the height of the pandemic frenzy when public offices were closed and appraisers were booked out several weeks – the complaint was that my report exceeded the due date expectation told to the buyer. In the end, the complaint was ultimately dismissed without merit. But I still had to go through the state investigation, get my insurance company involved and be sick to my stomach with worry for months after what was a 25 year career clean from any complaints.

    • Baggins Baggins says:

      You said; ‘and the amc’… I have identified your primary problem. Ha! I mean, how many times before appraisers get wise to these companies basically having created an entire industry which thrives upon predatory practices? You know who to blame when things go wrong right? The person not in the room. The unrepresented party. You guessed it, the appraiser! Hell, I do it too, we all do. Except the difference is three out of four appraisers whom do not work with amc’s, blame the one out of four amc appraisers who do, for allowing this debacle to have gone this far in the first place. It’s a case of they sold it, enough appraisers bought it, and this is the end result.

      Imagine how many fewer changes would have been implemented towards software and automation if not for the appraisers continued allegiance to amc companies which have steadily over time morphed into technical services and development enterprises, whom now even have successfully lobbied to replace us entirely. Half of the CU tech was proprietary assimilation gained from amc acquisitions and mergers, if I recall that old obscure research point correctly. Many long years ago we were researching CU patents and such, and the various company assimilation which led to the final CU and DU products. Even if I’m wrong on that hard to remember point, at the very least, the combination of Biggers selling us all down the river with the Alamode sale, the separation of Mercury from Alamode which allowed amc’s to really ramp up the appraiser fleecing, and the appraisers continued loyalty to amc companies whom were so quick to answer the gse’s demand for faster cheaper more automated, well, that all added up. And here we are, automated repurchase demands and review quotas where government bureaucrats are mandated to find something wrong with appraisals. The appraisers whom used comps sharing, typing services, and flipped amc volume are the most exposed. Post this image again, I suppose.

  6. Avatar Mike says:

    Thank you for sharing. It feels great to be out of such a horrible profession. Life is too short for so much BS.

  7. Avatar Douglas Kues says:

    Following a single retaliatory complaint to the California BREA, claiming my report was the “worst ever seen” by a right of way firm often employed by the State of California and various counties throughout the state, I was subjected to a four year investigation, 1,100 pages of accusations, three multi hour long telephone interviews with a single investigator with no more experience in Right of Way than I, and my over 100 item list of poor, inaccurate, and entrapment type questions put together after listening to the taped conversations at least three times. I succumbed to the pressure of time and money and settled under threat of charges up to seven (7) times the amount I finally agreed to if I were to exercise my rights and move on to the office of the Attorney General for a formal hearing. As I rapidly move toward a permanent vacation, I am sincerely hoping some team of really sharp lawyers start some class actions against this sort of harassment….. and that they throw me a bone once in awhile. Mine was not FannieMae, but the line of accusations nearly identical in many instances. My 30+ unblemished years of experience through thousands of appraisals might lend some credibility to others going through the same thing. The case? I was retained by a private property owners to support a decision of whether or not to dispute offers of fair and equitable compensation for the taking of private land for the public good. Long story, but here for the asking.

    • Baggins Baggins says:

      Dare to take a client questioning a government apparatus which intends to strip them of their land? You might as well have done an appraisal for Amond Bundy. That’s pretty brave. The government these days, let me tell you. Your post is interesting and makes me sort of want to find a jobs listing for state investigators in CA, check out the inadequate requirements.

  8. Avatar Mark Davis says:

    Glad I stayed with it, a well written journey from Kafka to Orwell. An entertaining story that captures the emotional conundrum between being happy they didn’t hang you, but pissed that the “authorities” put a rope around your neck. Especially when based on spurious accusations by petty, incompetent, spiteful bureaucrats that hide their identities. I was glad for the happy ending (not hung) but think that this outcome will become increasingly rare. The aging population of those sitting in judgement positions still occasionally reflect the original principles of the institutions, namely seeking the truth in the matter and justice for the parties involved. These positions of power over other people’s lives inherently corrupt the occupants of said positions in a gradual process that leads to, well, you know .

    • Baggins Baggins says:

      Are you my clone posting as an alternate identity or something? Amazing takes, bravo.

      ‘If you want to know who rules over you, find out whom you’re not allowed to criticize.’

  9. Avatar Marika says:

    I am under the bus now. Fannie Complained against my report I was actually proud of after I sent it. It was complex… AI chose “better comps” than me. Good to know what’s waiting for me. Just sent an application for a managerial job to a gov. Agency. I am an economics/business admin college graduate. I guess for fannie I am overqualified to be an appraiser. With me possible leaving their false goal to make the profession more diverse will get a score: I am an immigrant…

    Per DPOR there is an influx of complaints against appraisers in VA. I am wondering: why? I keep contacting my representatives all level .. after elections I will knock on their doors ..I would like to be an appraiser, if I could…

    I felt discriminated reading the false accusations… Now I see: it is not just me.

    • Baggins Baggins says:

      The power of fake news corporate messaging media. A very real concern for the future of liberty and freedom.

      Somebody get Tucker Carlson on the line! You know on his very final Fox nightly episode, he was laughing at the preposterous notion that appraisers were racist. And then he was fired. Yeah, that actually happened.

    • Avatar Ellise Dodge says:

      Hi I just got word today that Fannie Mae put a complaint against me – first time in 24 years. In reading these comments, am I understanding correctly that you are not allowed to appraise if you have a complaint filed against you??

  10. Donna Beck on Facebook Donna Beck on Facebook says:

    I feel the same. After 24 years, I am done with ridicule accusations & govt interference. This country is being run by the banks.

  11. Baggins Baggins says:

    Well, after some fun commentary on the board, down to the article itself; What an excellent article. Fun to read and great work with such well thought out professional responses. The author said; “The appraisal was ordered from an amc’… Oh boy, I’m going to be jotting this tidbit down quite a bit more in the future I fear; I have identified your primary appraisal problem. Ha! You got off easy. The whole show is all about performing loans and packaging to investors. And if they don’t want em down the line for unknown reasons at a later date, put backs occur. And that’s when someone actually looks at the appraisal. A purely unpredictable event. The appraisers risk analysis pertaining to this point lies primarily not with the task at hand, although that is quite important, but rather the client at hand. Why it’s confusing is the investor body has changed with the ongoing lender consolidation and efforts to eliminate community based lending, like your local small town credit unions and such. The local branch would have ordered reviews, second appraisals, ran something in house if necessary. Where as the big boxers, they don’t care as the race to origination and maintaining production quotas is all that matters, everything else after that point they consider some other departments problem. Regardless of how long any of us have been at this, quite important to recognize we’re handling an entirely different animal these days, depending on the client structure. Which is why; Put everything into the report and assume you will not have a chance to even write defense letters or rebuttles, much less deliver a verbal argument. Glad things worked out in the end, despite the hassle. Great blogs article, appreciated.

    I was thinking; Is there licensed persons employed by the GSE’s to this regard? Aren’t they tasked with effective oversight of the process? It may be practically impossible to actually sue or litigate against the gse companies, but perhaps could be possible to start turning each and every one of these events into singular complaints sent back to the actual licensed appraiser workers at the company? The effort would be free via state complaints, and possibly could yield better discovery… Just brainstorming. Or can the locals put new state rules that anonymous complaints are prohibited practice so they could simply mail them back to the lender and fannie, thereby also putting the lender in the hot seat as they are entities regulated by the state too, demanding transparency? This anonymous reviewer thing is simply too flimsy, there must be a way around this. Cheers.

  12. Avatar Koma says:

    Aaah Fannie if there was only someone or some entity that could take them down a peg or two. Hmmm!

  13. Avatar Joseph A Mier, SRA, AI-RRS, RAA says:

    There needs to be a comprehensive database of appraisers who are experiencing the attack of a mysterious black box sending complaints to state boards. What was the complaint, how did they fight back, and what were the results? This system remains consistent in its operation and how it “picks better comps.” By exposing its flaws and collecting the necessary resources, we can effectively mount a counterattack to this harassment.

  14. Avatar Maria says:

    Lets start an alliance, who, if not us? would save this profession?

  15. Avatar MXSeventyFive says:

    Thank you for the detailed article and to all the appraisers et al that spent a great deal of time crafting the excellent comments.

    I do have one question, and I probably know the answer, but will ask it anyway: Where does FNMA send the automated complaint (or any complaint) in the case of a hybrid appraisal when the subject data does not agree with CU?

  16. Avatar BT says:

    And next – HUD.

  17. Avatar Tom says:

    I’m a Certified General Appraiser that started appraising in 1984, almost 40 years ago! Spent the majority of my career appraising both residential and commercial properties in a major metropolitan market. I had my own appraisal firm for a number of years, prior to the AMC model which dissolved years of relationship building with clients large and small, almost overnight! Like most of you, I really enjoyed appraising and was proud of my profession. AMC’s changed the game and appraiser’s had no say in the paradigm shift. Of course there are those that say they no longer do originations work or agency work but the reality is, in most markets it’s near impossible to make a living exclusively with private clients. I personally, don’t know anyone that can.

    I’ve spent the past 15+/- years doing review work, 1 year for an AMC and 14 years split between 2 of the largest lenders in the US. An eye opening experience is an understatement! It was my experience that the majority of reviewers, FNMA included, had very limited field experience. Which is painfully obvious when they request baseless revisions for “more or better comps” As the OP so eloquently states “As anyone who has been an appraiser for more than five seconds can attest, you use the best comps available. There were no “better comps” to be used.” To make matters worse, they almost universally are delusional in thinking they know everything about every market in the US! Appalling, actually as well as insulting to the local boots on the ground appraiser.

    When CU (Collateral Underwriter – pet peeve, use of abbreviations without explaining them in the 1st use!) was 1st introduced, as reviewers, we had access to it. Unfortunately, appraisers did not. Many reviewers just copy/pasted the “rules” that fired and sent them to the appraiser as a revision request. The appraiser’s response, often times, was not important, the reviewer was justifying their existence. Statistics were kept on how many revisions as a percent of total reviews completed, were used in your annual performance review. CU had access to FNMA’s entire database of appraisals performed for sales and refi’s. So when an appraiser uses a comp that has been used before in another appraisal, CU flags any and all differences in ratings, which is a direct result of revision requests that question condition, quality, room count, GLA etc. Market conditions adjustments were FNMA voodoo, varying wildly between comps used by the appraiser and the FNMA model adjustment with no rationale provided – Paradoxically, they didn’t have to support their model adjustment!

    I was laid off this past February as the rising interest rate environment was having a significant impact on mortgage application/appraisal volume. I’m 63 and many around me were saying this is a great opportunity to retire. The problem was that, it was not my decision or on my terms. In addition to being a Certified General, I also hold an MBA in Banking and Finance. I say this not to impress, because that and $3 will get you a Starbucks, rather to make the point that layoffs are indiscriminate. A great deal of reflection and soul searching has ensued. I’m no longer proud to say I’m an appraiser. After reading the OPs ordeal as well as many similar tales, I really don’t think I want to be an appraiser anymore. When it affects those around you and your own health, it’s time to move on. Life is truly too short to be answering misdirected, unqualified and meaningless questions from someone that’s not qualified to lick your measuring tape!

    Cheers to appraiser’s mental and physical health!

    • Avatar appraiser a says:

      I completely agree with you Tom. I’ll have to start bagging groceries at the local Kroger unless I can find something else useful to do with my time because appraising doesn’t seem to be it.

  18. Avatar Douglas Kues says:

    It is so very unfortunate that those that control the money have once again successfully manipulated a once valuable service generally described as the independent determination of market value based heavily on comparable sales whose comparability is refined by application of adjustments to reconcile those apparent differences for which market support exists and is verifiable through market reaction to such differences.

    Author Tom, the last post I read dated 10/20/2023 at 10:15 am is the classic response from those of us who have attained the highest license level obtainable and with over 30 years experience. Again, those that manipulate the money should be pleased to have successfully begun the process of not only stifling new entries into the business, but also forcing the veterans out of business by frivolous and substantially incompetent complaint handling. Congratulations. Tom’s post should remain on this blog forever….. as a bit of history lesson.

  19. Avatar BT says:

    The reality is – it has been one heck of a process but they finally are getting it done. Increasing the requirements until new people couldn’t make a living for a couple years after getting their 4 year degree (unless they got the 2500 hours in while going to college) and then complaining that there isn’t enough Appraisers to keep up. Well the only logical answer was eliminate the appraisal from the process (since it was the goal in the first place). On top of that, send ludicrous requests for time consuming revisions. Can anyone tell me if they ever received a “please review these comparables from FNMA” email and went “Oh – these are way better than the comparables I selected”? They are always garbage and the insult to injury part is they don’t even know it!!!! If that is the best their high tech algo can do it should be an interesting mortgage industry going forward. Who’s next? Title companies? That should be a $15.00 search pretty soon. Realtors? NAR is facing some real stuff right now. Maybe 1 million less Realtors in the future? Home Inspectors? Just send a drone over – it will be fine. Mortgage lenders? Just fill out this one page form on FNMA website (looking in to the future). Insurance is where it is at youngsters (or maybe lawn mowing).

    • Baggins Baggins says:

      Some agents seem to think their days are numbered due to pending automation as well. Like most agents unaware what’s just around the corner for them too. You’ve inspired me to want to insure lawn mowers. Somewhere out there, someone else cares.

      Dear Fannie; Oh never mind, they don’t actually read any commentary.

  20. I stopped doing AMC & Direct Lender appraisal assignment many years ago, and have been encouraging colleagues to do likewise for the past 20+ years.

    ->HUD is not your friend

    ->FNMA is not your friend

    ->FHLMC is not your friend

    ->FHFA is not your friend

    ->HUD Secretary Fudge is not your friend

    ->The Executive Branch is not your friend

    Keep in mind that in March 2023 FNMA stated that traditional appraisals [i.e. Appraisers] are ranked in their cascading process as #5 [dead last] for Collateral Valuation.

    #1 is an AVM. #2 is an AVM + Property Data Report, prepared by a ‘trained’ PDC.

    A PDC is most likely a R.E. Agent, but could be an Uber-Lyft driver, or even an appraiser, for $45-$75.

    These things are all related under Appraisal Modernization, including the marginalization of Appraisers, plus, HUD, FNMA, FHFA, Fudge & the Executive Branch all throwing appraisers under the bus for doing nothing wrong. Some might even use the term Conspiracy to describe what’s going on.

    HUD & FNMA are the worst of the bunch. There’s no upside to doing work for them through a lender or an AMC. Only risk.

  21. Retired Appraiser Retired Appraiser says:

    Am I the only one who feels like barfing each time I read about the latest kick in the balls you guys take?

  22. Avatar Maria says:

    Would it be possible that these complains would reach your state license agency? Earlier or later, if not now already, you will be accused by fannie. Maybe go ahead of time and help those who are accused now, and your future yourselves?

    Also, I am asking all of you who were accused to send your thoughts to your license agency: to your State Appraisal Board. In VA it is DPOR, The Appraisal Board. (I do not know all the states function as an immigrant, still confused.)

    If you leave, let the Appraisal Board know why you are living. Just to do a good for this profession once you loved so much.


  23. Avatar Ralph says:

    Thanks for sharing, ones like these I usually avoid, once you go out 15-20 miles and you are in a niche market, those types of reports get flagged all day long, will usually trigger a field review and are typically harder loans to sell to investors. Hope you don’t lose business over this one and no claims are filed against your E and O.

  24. Sue Louisignau on Facebook Sue Louisignau on Facebook says:

    It doesn’t seem our boards are into fighting this… so if the Appraisal Institute is good with these changes where do you go

    I called them. They knew NOTHING! Told me to call their legal team..they would know

  25. Avatar Maria says:

    The same happened with me. Bought back mortgage, complains by Fannie Mae sent to me after the dead line of the response, still responded (8 hours work). Silence for a year.

    A year later a letter was received from DPOR with the same Fannie Mae complains…. waiting for the results.

    I was told by DPOR that there is an influx of complains against the appraisers.

    Previously I called Fannie Mae, an administrator answered, and couldn’t give any information how can I complain against the complains, who can be called or emailed with my questions. I felt a huge government construction standing in front of me without windows or doors…. deja vu?… welcome to the communism…


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Fannie Mae Filed a Complaint Against Me

by AppraisersBlogs time to read: 18 min