Flags Over Facts: The Road to Obsolescence
For years, appraisers have been warning that the mortgage industry was slowly engineering us out of the process. We were told we were paranoid. Resistant to change. Stuck in the past. Then the newest Mortgage Credit Executive Order arrived, and the appraisal section opened with a single line that confirmed everything we’ve been saying: expand AVMs, desktops, hybrids, and AI. That’s the priority. Everything else in that section is just polite filler wrapped around a strategy to shrink the role of the human appraiser until we’re little more than a signature at the bottom of a dataset.
And that strategy becomes even clearer when you look at what’s happening behind the scenes. While UAD 3.6 is not fully active yet, the structure being built around it makes the intention impossible to miss. The new system demands an avalanche of hyper‑granular data that has nothing to do with how appraisers actually determine value. Room‑by‑room material ratings, finish classifications, fixture‑level detail, micro‑condition scoring. It’s a level of data extraction designed for machines, not humans. No buyer cares whether the guest bath faucet is “mid‑grade chrome” or “builder‑grade brushed nickel,” but the new dataset does. Not because it improves valuation, but because it feeds the models. UAD 3.6 turns every full appraisal into a data‑mining operation, with the appraiser acting as the human data‑collection device for a system that wants our expertise now so it can automate it later.
And that’s exactly where appraisers need to pay attention, because the next step is already visible. The more data the system demands, the more opportunities it creates for system‑driven errors. Errors caused not by the appraiser, but by the automated checks that compare your correct data to someone else’s incorrect data. We’ve already seen this under UAD 2.6. Public records say a home is 2,400 square feet; you measure 2,150; the system flags you. A prior report misclassified a manufactured home as site‑built; you correctly identify it; the system flags you. A basement was counted as living area in an old dataset; you exclude it; the system flags you. None of these mistakes originate with the appraiser. They originate with the system’s assumptions, but the system can’t fix itself, so the cleanup always lands on the person with the license. UAD 3.6 multiplies this problem by expanding the number of fields being cross‑checked from a handful to hundreds. More data means more mismatches. More mismatches mean more automated flags. And more automated flags mean more ways for the system to treat the appraiser as the problem.
This same pattern shows up in the 21st Century ROAD to Housing Act. John Russell of ValuSight Consulting broke down the appraisal provisions, and he’s right. The headlines about institutional investors are a distraction. The real action is in the fine print. Licensed residential appraisers would once again be allowed to perform FHA assignments, which is overdue, but the bill also appears to let any state licensed or certified appraiser cross state lines for FHA work without a reciprocal license or temporary permit. That is a massive shift in how jurisdiction has always worked. The bill adds trainees to the National Registry and clarifies that supervisors carry full liability for trainee contributions. Put simply, the theme is the same: more access, more data, more throughput, and a guaranteed drop in quality once out‑of‑state appraisers start valuing markets they’ve never even driven through.
The VA Appraisal Modernization Act adds another layer. It aims to improve pay, address mileage in remote areas, and study closer alignment with FHA. The alignment part is the one that matters. FHA aligning with VA would be an improvement. VA aligning with FHA would be a problem. FHA’s process is slower, more inconsistent, and more vulnerable to lender pressure. VA’s process works because it is structured, predictable, and insulated from the chaos that plagues other channels. If VA ever adopts the same modernization mindset sweeping through the rest of the mortgage world, the last stable refuge for real valuation work will disappear. And if that happens, that will be my line in the sand. I will move to 100% private work.
And all of this funnels directly into the UAD 3.6 mandate. Fannie and Freddie have made it clear that appraisers must be ready by November 2, 2026, even if it means abandoning long‑standing software providers. Their updated vendor list now shows four approved UAD 3.6 appraisal software platforms: Aivre, Ascent Software Group’s Jaro platform, Cotality, and SFREP. Aivre is the first platform built specifically for UAD 3.6. Cotality and SFREP have completed verification. And Ascent/Jaro, while not owned by an AMC, is built primarily for lenders and AMCs, not appraisers. It is an appraisal management and workflow system with appraiser tools bolted onto an enterprise environment. That is the universe of approved options. If you want to keep doing GSE work, you will use the tools they approve, write in the language they dictate, and operate inside the system they designed. Or you can simply opt out and let them figure out how to automate integrity.
None of this is random or accidental. None of it is about modernization. It is a coordinated shift toward automation, standardization, and data harvesting, with licensed appraisers serving as the final checkpoint rather than the source of valuation. Some appraisers will adapt. Some will walk away. Some will move entirely into private work where clients still value expertise over speed. But every appraiser needs to understand what is happening, because the ground is moving under all of us, and pretending this is just another policy cycle is not going to cut it.
If VA ever follows the same path, that will be my moment to step away from lending entirely. Until then, I will keep doing the work that still respects the role of the appraiser and keep calling out the policies that do not.
- Flags Over Facts: The Road to Obsolescence - April 2, 2026
- From Dealerships to AMCs: Tech Fees as the New Normal - January 27, 2026
- When Protecting Tenants Starts With Targeting Property Rights - January 6, 2026
Every time the UW pops up asking about square footage, I already know I’m about to waste 20 minutes explaining the obvious. Yes, the numbers are right. Yes, I measured the house. Laser, tape, sketch, photos… sometimes I even toss in the survey for good measure. Meanwhile the third‑party numbers they’re defending look like they were generated by someone who never got out of the car. How are we supposed to ‘prove’ their mystery math is wrong when we’re the only ones who actually stepped inside? This industry is exhausting. And there is no way I’m dealing with 100 more rounds of this nonsense. I know exactly what’s coming, and I won’t be touching UAD 3.6 at all.
And now the ROAD experiment wants to let appraisers jump state lines without a license or temp permit. Sure, why not. We’re already drowning in inconsistencies. Might as well add interstate confusion to the mix. What could go wrong.
So who has jurisdiction if covering across state lines? Where the appraisal was performed, or the state where the appraiser is licensed? Trump has now issued contradictory EO guidelines. The demand for automated appraisals is contrary to the wall st vs main street EO, prohibition on federal government selling residential properties directly to institutional investors. It is the institutional investors whom demanded automation of the appraisal in the first place. Automation is used as the mechanism to roll people up into underwater mortgage situations then channel the real property directly into the hands of investors when they default, with no independent oversight.
Found this online and it’s something to pay attention to. Nobody outside of the gse world will be using 3.6. Image.
The possibility exists that vendor fulfillment will not be at levels need by lenders on the 3.6 final date. Then a new waiver will be issued, lenders will still be able to use traditional 1004 form sensible normal comprehensive forms. I’m waiting it out, not even experimenting with 3.6. We’ll see if the program holds up or not. Forms redesign was eight years on hold for good reason. I will be including a traditional 1004 full as an image attachment in each and every 3.6 appraisal if I complete them. I’ll still be engaging in rich free writing explanations as well, and will keep those as image attachments as needed. How’s that for granular data? Same approach for ANSI when the standards run contrary to local jurisdictional and MLS guidelines. Two reports in one.
This is important for liability protection because nobody outside the contemporary origination circles will have a clue what they’re looking at with 3.6 appraisals, just like they immediately presume incompetence when an appraiser applies an ANSI standard when literally nobody else is doing so. People will not understand why the appraiser would depart from traditional sound process. Appraisers will face lose lose situations and priority for ethical adherence to best practices will be disregarded in favor of hard line compliance regardless of outcome quality or data reliability.
Per VA modeling comparability. Even AI systems are suggesting the IVPI proposal model now. Imagine that. I don’t want to say I told you so. Actually I do. Told you so. Called that one a long time ago. They say Grok is the smarter one.
https://appraisersforum.com/forums/threads/3-6-the-promises-the-predictions-the-panic-and-the-fight-for-the-dwindling-appraiser-dollars.242420/page-14#post-3605557
In other news it appears UWM is now masking preferential bulk assignment to select few national firms, while maintaining the illusion of regulatory compliance through the amc bid system model. They’re spamming the thousands of appraisers whom used to get reliable work loads with bid requests, and hardly anyone ever lands anything. These are outright violations of sherman anti trust. Restriction of trade practices. Racketeering. Nobody does anything about out in the open felonious activity. That’s recent in the GBU thread on AF if anyone wants to look. A few threads on that at reddit r/appraisal. Predatory lending practice is once again the status quo for the appraisal industry. AIR rules solved nothing and the new tech made processes more exploitative than ever before. ‘Appraisal modernization.’
Thanks.
On that image you shared about not using UAD 3.6 for legal work, that part isn’t actually new. The 1004/URAR has always said the intended use is for mortgage lending only, but I’ve seen appraisers use it for estates, divorces, tax appeals, all kinds of private assignments. They really shouldn’t have been using the URAR for private work in the first place, so nothing has changed there.
On the 3.6 side, I haven’t tested it or taken any of the webinars, but what I keep hearing from people who have is that you can’t attach extra pages the way we are used to. There was even talk about invoices not being allowed as attachments. So the idea of adding a full 1004 as an image might not be possible once everything is locked down. We’ll see how strict the system ends up being, but it sounds like they’re trying to keep the report package sealed pretty tight.
Thanks for the clarification. If they allow any instances of adding large photo pages, that’s all we’ll need. Now professional report writing to mitigate liability as well as more clearly explaining process and reconciliation is referred to by the forms redesign project as ‘story telling’. (In the forms development department.) Oh reading not again!!! Save us from these evil appraisers whom actually want people to read. Like we care. (sucks thumb and goes back to never ending screen clicking on mobile devices. / Pan back, some drool is present as a caretaker wheels the individual to their room. You now can see they are a patient in a mental institution. The door shuts. Roll credits.)
You’re right that it comes off as contradictory. It’s basically two totally different incentive tracks running at the same time. The ‘protect Main Street’ stuff is aimed at slowing down consolidation, but the automation push is coming from a completely different pressure point, the lending side wanting speed, uniformity, & less friction. Those two goals don’t really coexist.
Automation is great for volume, but not great for guardrails. And the folks who benefit most from high‑volume, low‑oversight valuation systems are the same institutional buyers the other policy is supposed to keep in check. So you end up with this weird split where one directive is trying to slow the machine down while the other is greasing the gears.
That’s why it doesn’t line up. They’re responding to two different constituencies with two different priorities, & the result points in opposite directions
I did $5,000 for UWM in the first 2 weeks of this month and since their so called bid system was started (not really a bid) I have not received a single order in the over 35 I tried to get. Neither the fee nor the due date can effectively be bid down. Their new system appears to be a a scam.
Seek the truth
I’ve been saying “another nail in the coffin” when the UAD forms came out; the more data that is available to the GSE’s the less they need us. In my market SF differences are an issue; AMC’s always ask me why my measurements are different from the Assessor, my reply is always “ask the Assessor why HIS measurements are different from mine”, that’s my typical response and answer. The 3.6 is the almost-final nail, the only saving grace is that between the 3.6 forms and the new presidential ordered nonsense is that a lot of appraisers will pack it in, so the volume for those of us left should be sufficient. My fees will go up though, based on how many hours I need to complete an assignment, adding an hour or two for the barrage of revisions that will follow. Don’t want to pay my fee Mr AMC? Go find a cheaper appraiser, I’ll be here in 5 years to do the foreclosure appraisal on the same house. I wish everyone the best this spring, it’s been a long winter.
I’ve said that many times. I’ve also told them that the assessor didn’t measure the house. Generally, the people I explain this to are too stupid and or uneducated to understand how measuring the house is more accurate than not measuring the house and simply making up a number. It’s a clown car at best.
That line cracked me up. ‘Ask the assessor why his measurements are different from mine’ is such a smooth, no‑stress way to hand the UW their own homework. I might have to borrow that the next time someone decides to quiz me on square footage.
As an appraiser apprentice in 1990’s to certification in 1996. Appraising in two states NY and Pa I have seen it all. When I was in NY I found out that an agent or broker was was not allowed in fee shops until me. I was called into the office and asked if I was a broker or agent. I said yes, Steve smiled and then complemented me. He never saw someone work both sides. Being an appraiser is a different role or perspective. I am in Pa now and know why NY had bias. Problem is more with RE agents joining appraiser. They are not objective and they become form fillers. That ruins it for the rest of us. Uad is no different I will not participate in the madness. Yes I will cross state lines to do a meaningful appraisal because I am good at what I do. For the right fee I will do it. My appraisals are not rushed. Anyone with competenance can approach a assignment correctly. I have that ability. It’s understanding the numbers. Not grab 3 and run.
No inspection hybrid only form filling is apparently the preferred appraisal method for the appraisers with social anxiety disorder… I’m not buying this guy is a lurker, reads suspiciously like the person running illegal inspection services that deleted his account previously.
https://www.reddit.com/r/appraisal/comments/1s9u1os/remoteonlynoninterior_business_model_can_it_work/
The end result of amc’s disrupting the industry standard which was a previous rotational assignment pattern where appraisers were on panel via merit and experience, received relatively equal assignment volume. So now the appraisers whom cut the most corners, outsource the most work, put in the least effort, get the lions share of all orders. Appraiser licensee headcount continues to decline.
There is no full circle accountability anymore. Most defaulted properties no longer go through a traditional retrospective review process to determine if the originating agencies and vendors all did their job properly. Rather the defaulted real property holding is sent directly to note sales, debt sales, to institutional investors. They have a financial incentive and business interest to not examine if there were competency issues or other issues related to a dysfunctional appraisal program implementation by amc’s. They intentionally cover this up and take the property at a firesale pricing instead.
The amc’s are agents of the lenders. The major lenders whom use the amc’s also service institutional investors, or are institutional investors themselves through various other branches of the company. They’re driving people into overpriced housing, economically unaffordable situations, not allowing market corrections, automating the entire valuation process behind a veil of secrecy without oversight. This is predatory lending. This is what the national appraisal licensing program, the GSE oversight, and amc’s were intended to prevent. Central planning never works.
The Appraisal Industry Isn’t Being Modernized — It’s Being Reengineered
What’s happening in the appraisal industry right now isn’t modernization—it’s a controlled transition of valuation from professionals to systems.
I’ve been in this profession for decades. I’ve seen policy cycles, form changes, market crashes, lender pressure, and every version of “this will improve the process” come and go. This is not one of those cycles.
This is different.
The current push toward AVMs, desktop products, hybrids, and AI-driven analysis isn’t just about efficiency. It’s about building a system where valuation can be standardized, scaled, and ultimately controlled without relying on independent judgment the way it has historically.
UAD 3.6 makes that clear.
On the surface, it’s being presented as a data standardization upgrade. But when you actually look at what’s being required, it goes far beyond how appraisers determine value in the real world. We’re now being asked to capture hyper-granular details—materials, finishes, condition scores, fixture classifications—at a level that has little to do with how buyers and sellers behave in a market.
That data isn’t being collected to improve our analysis.
It’s being collected to feed systems.
Because once valuation is broken down into structured inputs, it becomes something that can be modeled, replicated, and eventually automated. And right now, appraisers are the ones building that dataset—one report at a time.
At the same time, we’re seeing an expansion of automated review systems that flag discrepancies between datasets, prior reports, and public records. Most appraisers have already experienced this. You measure a property correctly, but it doesn’t match public records—you get flagged. You correct a prior classification error—you get flagged. You apply judgment where the data is wrong—you get flagged.
The issue isn’t the existence of review systems.
It’s that the system increasingly treats the appraiser as the problem instead of the data.
As UAD expands the number of required fields, those conflicts will increase. And over time, that creates pressure to conform to existing data, whether it’s accurate or not. That’s not improving quality—that’s enforcing consistency.
And consistency at scale is what automation depends on.
We’re also seeing broader structural changes that reinforce this direction. Proposals allowing cross-state appraisal work for FHA assignments may sound like an efficiency measure, but they erode one of the core foundations of credible valuation: geographic competency. When that barrier is reduced, the profession moves closer to a model where appraisers are interchangeable rather than market-specific experts.
At the same time, the consolidation of approved software platforms narrows how appraisals are completed and delivered. If you want to participate in GSE work, you will operate within systems that define how data is entered, structured, and transmitted. That’s not just a software change—that’s a shift in control.
And once control of the process shifts, the role of the appraiser inevitably follows.
From analyst… to verifier.
From decision-maker… to data provider.
From independent professional… to participant in a controlled workflow.
That’s the part that should get everyone’s attention.
Now, none of this means the profession disappears overnight. It won’t. There will always be a need for experienced appraisers, especially in complex assignments, litigation, private work, and markets where nuance matters.
But the lending side of this industry is clearly moving in a different direction.
One area that still stands apart—for now—is the VA system. It remains structured, consistent, and more insulated from the instability and pressure seen in other channels. If that system is ever pulled fully into this same “modernization” model, then the last stable framework for independent valuation in lending will be gone.
At that point, many of us will make different decisions about where we focus our work.
This isn’t about resisting change. Technology has its place, and parts of this process can absolutely be improved. But there’s a difference between improving a profession and redefining it.
What we’re seeing right now is a redefinition.
The question isn’t whether the industry is changing—we all know it is.
The real question is whether appraisers recognize that their role is being reshaped in real time—and whether they’re going to adapt strategically or wait until the system makes that decision for them.
Ken. Please ask your bot how these new working situations relate to the proper classification of a 1099 vs an employee, per IRS rule definitions. Do appraisers still qualify as independent 1099’s under these systems? The argument is that appraisers have been improperly categorized ever since amc’s took control, things only getting worse with time. Thanks.
https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee
Ken: This is an excellent explanation and analysis – the best that I’ve seen regarding “Appraisal Modernization” and 3.6.
Baggins,
Good question—and I actually ran this through AI first to pressure-test the logic before responding. Like all of us are doing now, we’re using these tools to analyze, challenge assumptions, and refine our positions. I don’t just take the output at face value—I review it, compare it to real-world experience, and then decide where it holds up.
Here’s where this lands based on both IRS definitions and what we’re seeing happen in the field.
The IRS doesn’t care what you’re called (1099 vs W-2). It comes down to control—period. The three buckets they look at are behavioral control, financial control, and the nature of the relationship.
If the company controls how you do the work → that leans employee
If they control your fees, assignments, revisions, and workflow → employee signal
If you’re economically dependent on one pipeline → employee signal
If they only care about the final result and you run your own business → contractor
The key line from IRS logic is simple:
If the company has the right to control how the work is done, you’re not truly independent—no matter what the contract says.
Now apply that to AMCs and these “new systems”
This is where it gets uncomfortable for the industry.
On paper, appraisers are still 1099 independent contractors. But in practice:
AMCs often control assignment acceptance windows, turn times, revision scope
They influence (or outright set) fees
They impose layered review conditions and reporting formats
They can effectively throttle your workflow or cut you off entirely
That starts looking a lot less like “independent business” and a lot more like managed labor inside a controlled system.
And this isn’t theoretical—misclassification is already recognized as a national issue across industries, often driven by cost savings and liability avoidance.
So do appraisers still qualify as 1099?
Here’s the straight answer:
Some do. Many probably don’t under a strict interpretation.
If you truly operate independently (multiple clients, control your workflow, negotiate fees, minimal oversight) → you’re solid 1099
If your business is effectively routed through AMC systems that dictate the work environment → you’re in a gray zone, and in some cases likely misclassified
Bigger picture (this is what your question is really getting at)
What we’re watching isn’t just classification drift—it’s a structural shift:
The industry has moved from independent professional services → platform-controlled labor
That model works financially for AMCs, but legally it starts colliding with IRS and DOL standards.
And if that ever gets seriously tested?
You’re looking at back taxes, penalties, and a complete restructuring of how this industry operates.
Bottom line
AI didn’t give me a new answer—it clarified what many of us already see happening:
We’re still labeled independent…
but the system is increasingly treating appraisers like employees without the protections.
That gap is where the real problem is.
—Ken
https://www.irs.gov/forms-pubs/about-form-ss-8
From the bottom of the initial link, appraisers can simply write in to ask. Get some tax benefit if proven.
Appraisers don’t “determine” value. The market and courts “determine” value. Appraisers analyze and interpret said market to develop an opinion of value.
I’m out of it. I told the E&O last Fall. I told MLS last Winter. I told Cotality this week. I’ll tell the State this coming Fall, if not sooner. Forty two years is quite enough.
I do enjoy coming here, however, even though we’re little but a tempest in a teacup.
The more people leave means more work and higher fees for me. Im looking forward to getting $800 for a sf report/
History has receipts on this kind of thinking. Every time a profession starts cheering for fewer colleagues because they think it means more money, it ends the same way. The whole industry collapses under its own short term greed. Look at PATCO in the 80s. A bunch of controllers thought they’d get ahead by not standing with their coworkers. The government fired everyone, the union died, wages tanked, & the entire profession lost leverage for decades. Same thing happened in trucking after deregulation. Drivers undercut each other for quick cash, & the whole pay structure fell apart.
Nothing boosts an industry like eating your own… said no one with a functioning memory.
This is usually when I make an IVPI Proposal reference. Take it back to the beginning. Why was there an appraiser licensing program of the first place? To protect the integrity of systems due to an excess of abuse and unethical practice which harmed citizens, investors, societal stability. After licensing, one effective method of mitigating the damage was relatively equalized work distribution in order to avoid undue influence. In turn this rotational appraisal work assignment method built up a robust industry where more were independent than not.
Each lender formed their own approved appraisers panel and engaged in rotational order assignment at consistent fees. The most commonly accepted fee by all appraisers, rather than a mere few, was identified as the C&R or customary and reasonable fee. Lenders would ask for a yearly fee survey. This was never previously used to identify cheapest appraisers to assign majority work load to. Rather was used as a protective measure to insure the highest quantity and quality of available appraiser vendors would be willing to be present on their panels. Although we competed on merit for better clients, basically everyone enjoyed some measure of consistent fee, consistent workflow, it was nearly impossible to drive peer workers out or undercut them.
Reliable viable small businesses that were capable of training, had a mix of both simple and challenging work which was conductive to training, unlike only complex work availability in the era of waivers and appraisal modernization. That is when the industry attracted new licensees rather than shedding them at an increasingly rapid pace. That’s the rub with the parea program, you can’t refill the ranks of licensed professionals whom purposefully leave without training replacements, without first answering the market pressures which prohibit training, limit the sustainability and growth of small business, ultimately drive them out of business. Now they’re finally coming for the non gse market, the recent EO pushing modernization is going to reshape the landscape of appraisal everywhere. I do not understand the logic of appraisers whom think this somehow gives them the upper hand.
Nobody will be there to defend the opportunists whom perceive other people being driven out of business as somehow a measure of their own success. Those kinds of appraisers will miss us when we’re gone. We will no longer be answering any calls for assistance or that of future distress. Be careful what you wish for. FYI, appraisers on those last few reliable direct assignment limited panels, they’re getting $800 for appraisals right now, have been for some time. It is the under cutters whom create the chaos by driving others out of business, then work so much harder to get back to the exact same place, as if they never undercut or accepted the amc model in the first place. Let’s go with another classic; Your world is what you make of it.
“Once all these other appraisers are gone I’ll be able to finally have enough leverage to drive amc’s fees up to customary and reasonable compensation levels, as if no amc had been involved in the first place.” If that was true the exploitation would have stopped long ago. This industry has shed over fifty thousand people without replacement over more than fifteen years. Despite the largest mortgage lending origination boom in history. Half the people still in it are commercial and are not subjected to these same market conditions residential appraisers are. One would have to examine cg vs non cg license ratio around 2012 then compare that today, get a handle what proportion of residential appraisers has been driven out. If the cg vs non cg ratio is much higher today, that indicates most driven out were residential appraisers. How many tried then failed along the way, consistent net loss of licensees. More to come.
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf
Everything you’re describing with the IVPI proposal is basically what VA already does. Rotation, equalized work distribution, fee studies that come straight from appraisers, consistent fees, consistent workflow, all of it. VA kept that structure intact while everyone else moved away from it, which is probably why their system still functions the way the original licensing framework intended. It’s a solid example of how the model actually works when it’s allowed to.
Exactly. Been a while since I read that, will take some time for a refresher read soon. Pretty sure that’s described in the position statement or introductory explanations. An attempt to mirror a comparative model that works, the VA, applied to the other GSE’s. Prevent another housing crash.
The central clearing house for appraisers. One giant middle management entity. Ran non for profit status. Ran and staffed by qualified appraisers. The primary purpose to uphold the integrity of the valuation process and independent network of licensed appraisers. Promoting independent small businesses. To insulate from lender pressure and disproportional assignment practices. With a dedicated partner organization to host an appraisal pressure hotline. Where they could take action rather than merely referring. Basically the polar opposite of what the amc industry accomplished, but keeps promising it will one day actually deliver. They’re all pretending.
I thought it was really fascinating that when someone asked the chat bot what a better modeling of the appraisal industry would look like; It summarized the IVPI proposal. Then it stated the exact same reasons the model would work and why the current model is dysfunctional. I have a link for that above.
You mean that you are willing to endure that misery for a mere $800? Youch!
Please, please, please realize that the information gathered/data is coming from who?
Oh yes….unlicensed, uninsured, ignorant, UBER drivers.
They know this, the GSEs. They are worried about complete, total, utter failure of the data accuracy AND the interpretations therefrom.
Plus, states can regulate appraisal activity. Uh oh!?!?
What I tell people when I’m trying to summarize the nightmarish end of the independent appraiser for mortgage lending; You’ll just have to trust that non licensed property data collector the lender sends to pretend they’re an appraiser, will not be bouncing in and out of his specialty app service, saving all the photos he took of your home on his personal cell phone. That’s sort of an ice breaker. The real frightening aspect is the twin gse’s running all this data through AI systems which are managed by unaccountable third party companies. What are they going to do to an AI robot if it does not respect their use limitations or privacy restrictions? Nothing. Absolutely nothing.
Great article as usual Des.
AB has published many articles on MISMO goals and objectives. Going back to 2015-2016.
There have been articles on FHFAs own ‘White Papet’ conclusion that AVMs arent as reliable as traditional appraisal.
Now the federal powers that be, and their parasitic enablers at TAF have completely redefined what real estate appraisal is.
Its no longer a blend of science and art, to as nearly as possible replicate or mirror the actions of most probable market participants in a given area, for a particular property type.
Nor are the actions of one’s peers the metric for determining USPAP compliance anymore.
SR3/4 have been replaced by AI software written to unknown specs; and prosecutorial arguements by dishonest/ corrupt state regulators (such as AARO driven BREA in California).
Even permissible language violates the Dodd Frank Act.
The entire process is designed to facilitate fraud against investors more easily.
Period.
As an appraiser apprentice in 1990’s to certification in 1996. Appraing in two states NY and Pa I have seen it all. When NY I found out that an agent or broker was was not allowed in fee shops until me. I was called into office and asked if I was a broker or agent. I sId yes , Steve smiled and then complemented me. He never saw someone work both sides. Being an appraiser is a different role or perspective. I am in Pa now and know why NY had bias. Problem is more agents are joining appraisers with problems they are not objective and they become form fillers. That ruins it for the rest of us. Uad is no different I will not participate in the madness. Yes I will cross state lines to do a meaningful appraisal because I am good at what I do. For the right fee I will do it. My appraisals are not rushed. Anyone can competenance if they approach the assignment correctly. I have that ability. It’s understanding the numbers. Not grab 3 and run.
GSE’s have officially departed from their congressional charter.
Shut them down. Wind them down. The program has failed.
https://www.fanniemae.com/about-us/corporate-governance/fannie-mae-charter
As a collective there are too many different groups representing us. WE SHOULD STRIKE AND LET THE PUBLIC DECIDE. Unfortunately, as a group we were never consolidated. If we do not stick together, WE LOSE!!!! IF THEY USE COMPUTER TECHNOLOGY. Well, they need form fillers. Getting paid for us to give them what they should not be allowed. My answer lets not do it. let them higher morons to do it. We all know we are heading to a new banking crisis. WHY BE BLAMED!!!!
About 40 or so years ago, there was a good chance for appraisers to consolidate and gain some politicall power like the CPA’s, but all they were interested in was infighting and cutting fees. So, here we are.
I got into appraising as a second career after my first career as computer maintenance came crashing down due to younger people coming in with better skill set at cheaper wages. Same thing is happening again. New technology is changing everything. I no longer want to adapt (at age 78) so I will leave and make room for the younger folks. Not complaining, I have had a good run.
Good luck, American appraisers. You just think you’ve seen pressure. Oh, wait, there won’t be any appraisers. Never mind. No further comment.
https://www.msn.com/en-us/money/news/3-million-muslim-americans-struggle-to-find-mortgages-that-don-t-violate-their-faith/vi-AA20zF8g?ocid=socialshare
Craig — I appreciate that. But here’s the hard truth: we’re aiming at the wrong target, and that’s why nothing changes.
Appraisers keep arguing with each other, debating methodology, forms, and “modernization,” while the real power structure has already moved past us. The pressure isn’t coming from within the profession — it’s coming from lenders, banks, and the stakeholders upstream who profit more when we’re reduced, automated, or removed entirely.
This isn’t evolution. It’s displacement.
We’re watching the same setup that led to the 2007–2008 collapse, just slower and more polished. Back then it was inflated values and pressure to “make the deal work.” Now it’s the opposite — control the valuation process, minimize friction, eliminate the independent appraiser, and keep the loan pipeline moving no matter what. Different mechanism, same outcome: distorted risk and zero accountability.
And here’s where we’re getting it wrong — we keep complaining to the wrong people.
This is not something that gets fixed at the appraisal board level or through industry chatter. This is a Congressional issue. Period.
If this profession is going to survive in any meaningful way, the conversation needs to be elevated directly to people like Elizabeth Warren and others in Congress who are already focused on financial system risk, consumer protection, and bank oversight. They’re the ones with jurisdiction over the Consumer Financial Protection Bureau and the broader lending framework that’s driving all of this.
Because let’s be clear:
* Fee compression isn’t random — it’s structural.
* AMC behavior isn’t accidental — it’s incentivized.
* “Modernization” isn’t neutral — it’s being designed by parties who benefit from reducing independence.
We can keep writing blog comments for the next five years and nothing will change. Or we can start organizing around specific, actionable reforms and take them directly to Congress where the authority actually exists.
The framework is already there — things like full fee pass-through, banning blind bidding, a national ROV system, and real oversight of AMCs. These aren’t theoretical ideas — they’re practical fixes that address the root of the problem .
But none of it happens unless the right people are forced to look at it.
Right now, the industry is slowly being engineered into irrelevance — not overnight, but steadily enough that most won’t react until it’s too late.
If we don’t shift strategy and take this fight to the federal level, we’re not just going to lose influence — we’re going to lose the profession.
That’s the reality.
Kenneth Mullinix
Please let us know in the event anyone bothers to program their AI to actually accomplish the stated task. A repeated summary of what the humans on this board have been talking about for decades..
Thanks.
Kenneth
Absolutely spot on outline. One big problem is that the Appraisal Institute has portrayed themselves as being vitally supportive and sympathetic relative to the residential appraiser’s plight.
Nothing is further from the truth! Their concern has NEVER been nor EVER will be to support the residential members. Hence the results of Cindy Chance’s removal.
At one time we had a pretty good chance of developing a strong association of State Coordinators joining together. We had over 30 states involved. Too many of us have walked away or just aged out.
So, where are we now? Either we revive interest and activity by state coalitions or take as MUCH AS POSSIBLE to State Boards.
I am seeing a glimmer of hope that those people can and will grow a set. Let’s get it on!!
This process began in the 1800’s with the Industrial Revolution, enhanced significantly by Henry Ford’s assembly line. Before Ford, automobiles were hand made, 1 at a time
Fast forward to the World Wide Web. We no longer needed travel agents & could book our own flights & rooms. Most travel agents went out of business, including friends. They no longer had full control of the data.
And, we could get or find anything online in just seconds. “Instant” became the norm for just about anything and everything for consumers.
At this point, with the advent of good AVMs, UAD and more importantly acceptance of AVMs by GSEs for fast & cheap collateral values over slow & expensive labor (appraisers), it was obvious what was coming. The only unknowns were timing & volume.
PDRs were first announced for use in Desktops, although this was never the intended primary use of PDRs by the GSEs. Intended use was for AVMs in lieu of appraisals. We were misled on thus.
Since AVMs generally have lower confidence scores outside 1 SD of the mean, traditional appraisals will be required by lenders for many properties going forward. Rural, high-end custom-built, leasehold & many others will require appraisals. Going away will be cookie cutter tract homes.
Increased Automation of the process is inevitable. Congress does not care. FHFA is in favor of automation.
Can’t stop progress which is controlled top-down..
This process began in the 1800’s with the Industrial Revolution, enhanced significantly by Henry Ford’s assembly line. Before Ford, automobiles were hand made, 1 at a time
Fast forward to the World Wide Web. We no longer needed travel agents & could book our own flights & rooms. Most travel agents went out of business, including friends. They no longer had full control of the data.
And, we could get or find anything online in just seconds. “Instant” became the norm for just about anything and everything for consumers.
At this point, with the advent of good AVMs, UAD and more importantly acceptance of AVMs by GSEs for fast & cheap collateral values over slow & expensive labor (appraisers), it was obvious what was coming. The only unknowns were timing & volume.
PDRs were first announced for use in Desktops, although this was never the intended primary use of PDRs by the GSEs. Intended use was for AVMs in lieu of appraisals. We were misled on thus.
Since AVMs generally have lower confidence scores outside 1 SD of the mean, traditional appraisals will be required by lenders for many properties going forward. Rural, high-end custom-built, leasehold & many others will require appraisals. Going away will be cookie cutter tract homes.
Increased Automation of the process is inevitable. Congress does not care. FHFA is in favor of automation.
Can’t stop progress which is controlled top-down..
Craig, Pat — you’re both right, but here’s the hard truth:
This isn’t just “progress.” It’s risk being shifted out of sight so lenders can move loans faster and protect margins.
AVMs don’t eliminate risk — they hide it. And we’ve already seen where that leads (2007–2008).
The real issue isn’t automation — it’s this:
They’re removing the volume work that keeps appraisers in business
Centralizing data control with lenders and vendors
Eliminating the one independent check that can stop a bad deal
That’s not evolution — that’s system design.
Congress isn’t paying attention because nobody is forcing the issue. Agencies like FHFA are pushing this because there’s no organized resistance.
If appraisers keep treating this as “inevitable,” then yes — it is.
Only two paths forward:
Organize (state coalitions or national effort)
Take the argument directly to policymakers as a consumer risk issue — not an appraiser issue
AI isn’t the problem either — it just speeds up whatever system it’s put into.
Right now, that system is built for speed, not accuracy.
If that doesn’t change, the outcome is already decided.
Policy-Focused Version (for Congress / media / Warren angle)
What’s happening in residential valuation right now is not simply technological progress — it’s a structural shift in how risk is managed within federally backed lending.
The increasing reliance on AVMs and automated processes does three things:
Removes independent human verification
Appraisers serve as a neutral third-party check. Eliminating that role concentrates control within the lending and data ecosystem.
Shifts and obscures risk rather than reducing it
AVMs perform well in homogeneous markets but degrade outside statistical norms. That risk does not disappear — it becomes systemic and less visible.
Creates incentives to prioritize loan throughput over accuracy
Faster, cheaper valuations benefit lenders operationally, but weaken safeguards that protect consumers and the broader financial system.
This mirrors pre-2008 conditions, where:
Risk was underestimated or ignored
Oversight functions were weakened
Market efficiency was prioritized over stability
The current trajectory raises legitimate concerns for regulators, including the Federal Housing Finance Agency and members of Congress such as Elizabeth Warren, particularly around:
Systemic valuation risk in non-standard properties
Data centralization and control by private entities
Erosion of independent oversight in federally backed loans
This is not an argument against technology. Automation has a role.
But removing independent valuation entirely — especially in a government-supported mortgage system — introduces vulnerabilities that history has already exposed.
The question is not whether automation will continue.
The question is whether safeguards will evolve with it — or be removed entirely.
If it requires that more than two appraisers organize to fight it…it is indeed inevitable.
I really wish you’d show up on reddit r/appraisal sometimes. Use that same screen name so we know it’s you. They deserve no less. Just today; A thread about an appraiser going under, barely hanging on. Had a reasonable workflow then suddenly nothing, ‘unexplainable’. The various amc appraisers show up to brag about their non stop volume and two hour report flips.
What a great industry. Got to hand it to the trade group representatives for being such ethically upstanding people and setting great examples. Buy the book again or lose the license. Reminds me of union strong arming, less even basic union protections. They don’t need the book sales anymore anyways. They’re tied up with the same automated companies and amc which replaced the appraisers.
I’ve been out for 17 years and not a month goes by that I don’t find myself pondering getting back in just for pocket change or for the fun of it. Every single time I come to the same conclusion. It makes no sense economically…even for part time work. I ran the numbers on your old lawn care idea however and it does in fact make sense for any appraiser still looking for a exit strategy. Home inspection and CAT insurance adjusters still rank high on my exit strategy list for appraisers. Will check into reddit in the near future.
Thanks Retired. Spring is here and you know I love mowing the lawn. Sadly it’s drought year in Colorado, complete with some of the most stringent rules we’ve ever seen. NE municipalities are telling people they can only have gardens if they hand water, no sprinklers, limited space, and they have to get a city permit. To. Have. An. At. Home. Garden. Permits. We’ve got Aurora telling people max two day a week water with increasing fines; warning, 100, 500, 1k, and the new final tier; A year in jail for repeat violations. Your prescribed watering day will be based on your address. Exceptions granted for pud’s and community pools, otherwise at home pools prohibited and can take you directly to the max penalty. South area farmers are reportedly having to leave land untended and many are scrambling to plant low yield crop just to protect the soils, others have to make much more challenging decisions. Add the fertilizer crisis on top. One of these days they’ll be forced to acknowledge the ongoing aerosol particulate and cloud seeding issues which are saturating the soils with aluminum and barium, among other micro biome compromising chemicals. As if the drought is somehow just another coincidence. Another story for another day.
https://catadjuster.org/Careers.aspx
I can see where you’d make the corelation. What’s the comparative pay scale per individual gig? All told w/ drive time, random factor of work availability, etc. Looks like a 1099 staple with far more every day opportunity. I’m liking the entry level aspect for auto claims there. No experience? No problem! Some of them also mention appraisal service but do not seem to solicit for that directly. Probably there is another website area for that. I’m just not sure about staying 1099 though.
You’ll know who’s who on reddit. It’s a mad house with all the familiar people and stereotypical situations. AF on steroids with open option for limitless secondary anon accounts. Be careful where you go, it’s china owned and rife with censorship. Some of the play ball types were kind of upset that I was ‘posting about amc’s on a monday.’ Ha! The formula is simple; Go immediately to character assassination if they don’t agree with the message. There is however a pretty interesting mix of voices there. The near daily; find a mentor thread as well.
https://www.reddit.com/r/appraisal/new/
I’m going to take non profit’s to the next level and open up a free lawn care service for the elderly and infirm. My way in is clear; Simply find the government people whom accept kickbacks to get people moving for daycare and elderly care, propose an alternative grant scheme with a twist. Everyone is in on the fraud. My pal told me in rural NE Colorado there is currently a strike effort consisting of thousands of Somali’s whom are complaining the $29 an hour factory worker packages they were funneled into, is simply not enough. While the native Coloradoans in that same small town are for the most part now displaced and out of work. Imagine seeing that in your own town. These days if you want to be a rebel; Don’t lie, cheat, steal, and drive the speed limit. You might be the only one left taking such an approach.
https://www.zerohedge.com/markets/sick-behavior-financial-psychopaths
Great input!
We’re Fighting the Wrong Enemy: Why Appraisers Are Losing the War Without Realizing It
By Kenneth Mullinix
Date: April 2026
Picture this: loans are closing faster than ever, dashboards are green, and valuations are being cleared in hours—not days. Everything looks efficient, modern, under control. Then the cracks start. Quietly at first. Deals that don’t quite make sense. Collateral that doesn’t perform like the data said it would. Pricing that begins to drift from reality. By the time anyone recognizes the problem, the system isn’t just stressed—it’s exposed. And the one group that was supposed to provide an independent check is no longer in the room.
We’ve seen this before.
The 2008–2009 housing collapse didn’t happen because there wasn’t enough data. It happened because valuation integrity was compromised. Pressure to make deals work overrode independent judgment, and risk was buried until it couldn’t be hidden anymore. The lesson should have been permanent: without independent valuation, the system loses its ability to measure risk honestly.
Now we’re heading toward a different version of the same failure.
This time, it’s not about pressuring appraisers to hit a number. It’s about building a system that no longer needs them.
Let’s be clear about what’s driving this.
It’s money.
Lenders operate on volume, speed, and margins. That’s not a criticism—it’s reality. Every step in the mortgage process is evaluated based on efficiency and profitability. And in that framework, the independent appraiser is not a revenue driver. We are a checkpoint. A delay. A variable that can slow the pipeline.
And in a system built around throughput, anything that slows the process becomes a target for reduction.
That’s exactly what’s happening.
The push for “modernization” is being framed as progress—better data, faster decisions, streamlined workflows. But look closer. Automated valuation models, hybrid products, and centralized review systems all move control away from independent analysis and toward lender-controlled processes. With enough data and enough modeling, the message becomes simple: we can do this faster, cheaper, and without you.
Appraisers have been here before, just under different labels.
After 2008-2009, we were the scapegoat. When the system failed, valuation became an easy target, even though the real issue was pressure and incentive distortion across the lending chain. Then the narrative shifted again—to bias—placing the profession under a different kind of scrutiny.
Now the narrative is changing once more.
This time it’s quieter, but more dangerous: step aside.
With enough data aggregation and automated decision-making, the system is being designed to function without independent valuation. Not all at once. Not in a way that triggers alarm. But gradually, in ways that feel like incremental improvement until the role itself is diminished.
This is where the 2008–2009 warning matters.
Back then, risk was hidden by influencing the appraiser. Today, risk is being hidden by removing the need for one. Different method—same outcome. When the party that benefits from the transaction gains increasing control over the valuation process, independence disappears. And when independence disappears, so does transparency.
That is not modernization.
That is risk concentration.
And risk concentration is what destabilizes markets.
What’s more concerning is that the profession is largely fighting the wrong battle. We focus on fees, AMCs, and internal processes—important issues, but not the ones that determine our future. While we argue over tactics, the structure itself is shifting. Control of valuation is moving upstream, away from independent appraisers and into integrated, lender-driven systems.
We’re reacting to symptoms while the foundation changes beneath us.
This is no longer just an industry issue. It’s a policy issue.
If valuation independence erodes, the consequences extend far beyond appraisers. Loan quality, investor confidence, and overall financial stability all depend on credible, independent collateral valuation. That makes this a matter for Congress, not just the profession.
Policymakers—people like Elizabeth Warren—and oversight bodies such as the Consumer Financial Protection Bureau need to take a hard look at where this is going. Who controls valuation? How is it being determined? And what safeguards are still in place to ensure independence?
Because once those safeguards are gone, the consequences are not theoretical.
They are systemic.
There are practical steps that can be taken now: enforce real fee transparency so appraisers aren’t reduced to commodities, eliminate assignment models that prioritize speed and cost over competency, establish independent review mechanisms, and define clear limits on where automation can assist—but not replace—independent judgment.
This isn’t anti-technology. It’s pro-stability.
Because at its core, this is not about resisting change. It’s about preserving the one element the system cannot function without: trust in value.
Right now, the appraisal profession isn’t being eliminated in a way that sets off alarms. It’s being engineered out of relevance—quietly, gradually, under the banner of efficiency. That’s what makes it dangerous. Systems don’t fail when change is obvious. They fail when change is accepted without recognizing its consequences.
We’ve seen this pattern before. We know where it leads.
The difference now is that the risk isn’t being forced onto appraisers—it’s being designed around them.
If that continues, the outcome won’t be surprising. It will be familiar.
And by the time it’s obvious, it will already be too late to fix quietly.
This is the moment to recognize what’s happening—and to act—before the next housing crisis isn’t a warning, but a repeat.
Ken, you identified the problem.
There is no viable solution. Too little, too late.
Warren had plenty of time to shut this down when her party had control. They were more interested in DEI and vague notions of social equity. In fact THEY were among the first to jump on AI/AVMs as a means of achieving their goals and objectives.
The whores at TAF went right along with MISMO and changed verbiage to facilitate all the desired changes. Protecting/preserving the public trust went out the window a long time ago.
At about the same time, state and federal regulators began accepting “FNMA TIPS; and Investigations in lieu of SR3-compliant appraisal reviews.
They haven’t cared about actual appraisal integrity as a process in quite some time.
Ken: Can i share your blog reply in social media? It will be read by GSE Collateral Valuation Managers, lenders, appraisers and so on.
Craig, send me a link to your email address or email me at: kjmull@aol.com. I can send you the PDF or word pro format of this article and the image that goes with it, and yes you can send it where you like that was the idea of writing it. Ken
You’re not wrong—but let’s stop soft-pedaling it. This isn’t modernization. It’s a structured phase-out of the human appraiser.
UAD 3.6 makes that obvious. The explosion of hyper-granular fields—materials, finishes, micro-condition metrics—has nothing to do with how value is actually determined in the real world. It’s not there to help you form an opinion. It’s there to standardize and extract data so machines can learn from it.
That’s the shift:
from valuation to data production.
And the flagging problem you mentioned isn’t a side effect—it’s part of the mechanism. When your correct data gets flagged against bad legacy data, the system doesn’t fix itself—it pressures you. Multiply that across hundreds of new fields and what do you get? A controlled environment where the human appraiser is constantly “wrong” in the eyes of the system.
That builds the narrative they need: humans are inconsistent, the system is more reliable.
Now layer in cross-state licensing. That’s not about solving shortages—it’s about destroying the importance of local market competency. If someone can appraise a market they’ve never set foot in, then the profession has already been reduced to form completion and data input.
And behind all of this is the same driver it’s always been:
lender economics.
Speed. Scale. Cost reduction.
Appraisers were blamed after 2008. Then we were targeted through the bias narrative. Now we’re just being engineered out as an inefficiency.
So let’s talk reality, not theory.
The traditional lender-based appraisal model—especially for tract homes and condos—is becoming a low-fee, high-liability, high-friction environment. More data to input, more flags to fight, more revision requests, more time burned…for less money. That’s not a sustainable business model, especially for experienced appraisers.
Which brings us to the only smart move left—adapt your work, not the system.
For seasoned appraisers, the path is clear:
Get out of cookie-cutter lender work
Avoid tract homes and condos where you’re competing with automation
Stop chasing volume that no longer pays
Instead, lean into where automation breaks:
Complex properties
Waterfront and high-end assignments
Litigation, divorce, estate work
Private clients who need defensible opinions, not checkbox compliance
That’s where experience still commands a fee. That’s where judgment still matters. That’s where you’re not competing with a model trained on your own data.
Because make no mistake—everything being built right now is designed to use your expertise today so it doesn’t need you tomorrow.
So the choice is pretty simple:
Stay in the system and accept being reduced to a data collector working harder for less…
or step outside of it and position yourself where the system can’t replace you.
There’s no rescue coming for the middle ground.
Another well trained AI summary. Of everything that has already happened.
The problem with AI. The influence and subsequent limitations of the prompt. Lack of imagination and effective strategic formation of real world solutions.
A measure of acquiescence based on algorithmically coded predisposition for acceptance of what has been, less a moral code and subsequent human emotional response which should otherwise bring forward a new revolution, application of real justice.
The missing component; an entire nation of consumers whom are being likewise railroaded through this system.
The regulatory structure exists in part to protect consumers from predatory lending activity. The reason for appraisal licensing programs and appraisal trade groups in the first place.
Now that same structure has been reformed to once again target the consumer for elevated exploitation. Small businesses be damned.
Wake me when anyone goes to jail, when federal racketeering charges are levied, when anti trust and class actions go anywhere.
We’re not in this space out of dumb luck or some inability to navigate the complexities of a changing landscape. A lack of understanding how to apply self serving solutions.
The primary motivation is not ‘how to save yourself.’
This communication rythm is rather dry and not very sophisticated.
Are you actually comprehending what your utility is posting? Leave the consumers behind? They’re on their own? Save yourself by carving out a new working niche?
Accept a new status quo without a fight? I don’t think so. Find the off button. Press it.
___________________
What happened to the CFPB case file? What happened with the class action lawsuits? When does actual reformation of the appraisal trade groups happen? Where is the follow up to obvious and ongoing corruption of the process? An entire nation worth of appraisers whom somehow knows how to work with lawyers, while finding themselves simultaneously incapable of using them for the legal services they are capable of providing? Who’s still buying this?
Appraisers who think they’re insulated from any of this by simply bailing on frt gse origination work, only fooling themselves. An entire country of people. Everyone is somehow affected or at some point goes through this system themselves as a consumer. The changes within the system effect everyone in one form or another. Be that access, higher pricing, lack of balance or fair dealings, concealed fines, fees, pitfalls, data cancer. Or even the immediate predictable activity which is consumers being quite alarmed and taken back when lenders provide them instant pass throughs or situations such as a seller is told they’ll deal with a property data collector instead of a real appraiser. They’re constantly posting on message boards or inquiring what these radical process changes are about and what that may mean for them. Consumers are already concerned during the early stages of these roll outs and rightfully so.
The gse lending apparatus is the cornerstone that drives the entire housing market. As it stands now the system appears to prefer automation as a way to funnel people into untenable situations, only to immediately through the same system capitalize on their hardship by over extending them further or preferably use the system to acquire real property for direct firesale pricing to institutional investors, whom then exploit consumers on an even longer term basis. Where are all the PAVE activists now with all that ‘generational wealth’ and equitable social outcome talk? There has been no reform. There has been no meaningful change. Only familiar forms of predation and exploitation dressed up with new labels. Appraisal modernization.
You’re right Ken.
More simply, AI valuation as proposed is simply not real estate appraisal by any recognized definition.
At the most fundamental level, it fails to identify confirmed market value transactions vs other types of recorded transfers.
It is going to be 100% arbitrary, with a machine assigning purported ;’values’ for counter tops; 3rd, 4th or 5th baths, unknown weighting to remodeled or updated kitchens and baths with nice, custom tile versus marble, etc. It will be assigning ‘weight’ to items that may qualitatively enhance a property, but for which NO ONE can demonstrate quantified market recognition. Gold-plated faucets, anyone? (Yes, I have seen them. They added ZERO to market value by themself).
How about site topography?
Bottom line is it’s a huge dog and pony show designed to facilitate fraud against Wall Street investors. Investors are currently being lied to about how reliable such systems can be.
WHY would anyone think a corrupt organization like FNMA can change its long held, dishonest practices?
‘AI valuation as proposed is simply not real estate appraisal by any recognized definition.’
Thanks Mike. That’s what makes this latest uspap rewrite quite possibly the most radical change to the appraisal standards yet. Policy for sale.
Appraisers whom thought these issues would remain contained in the gse world might be surprised to learn what might happen next. The executive order ‘expanding credit access’ promoting automation in appraisal, continually altered rules and definitions, the uspap rewrite defining AI appraisal as accredited.
Now the automated process can effect appraisal use policy beyond mortgage lending. IRS, courts, insurance, blm, various other governmental and private, SBA loans, various other commercial, etc, etc. How long do you think it will take other non mortgage related users of appraisal services to understand these allowances, ask why they’re still paying full rates when the lending side gets these things done for a fraction of the cost? The AI use allowance now extends beyond GSE guidelines.
How does this affect appraisers like Lyle Gallagher whom successfully challenged his state board and argued the constant uspap rewrites are invalid rule making? He’s bound to the proper original version of uspap or the one latest approval as required by the Texas Administrative Procedural Code. One day, this list will grow through many other states. A missed opportunity if that guy would have fund raised he did not have to settle. Think of the implications for future litigation.
Bunton proposed the avm uspap certification which could be applied without an actual licensed appraiser involved. That did not pan out. The next best thing is finally here. A licensed appraiser rubber stamping the same thing. Uspap certified avm’s, so long as an AI utility is involved. Think of this as the next generation of evals. That is where we are at now.
https://appraisersblogs.com/justice-4-texas-appraiser-ninety-nine-thousand-dollars-price-tag
https://appraisersblogs.com/reindeer-standards-as-unenforceable-as-appraisal-code/
https://appraisersblogs.com/fannie-mae-2-state-of-maryland-drop-dead/
An AVM or AVM developer will never need to be “USPAP Compliant” since USPAP applies to people, not black box algorithms.
AVMs are used occasionally for court matters, such as a divorce, where both sides stipulate to Zillow, Redfin or other App.
They would be unusable in contested legal matters which rely on experts. Regardless of “accuracy”, opposing attorney has the right to depose & cross-examine opposing side’s Experts about their methodology & opinions. This by definition excludes machine generated numbers.
Is suspect but do not know as fact that Bail Bondsmen might use an AVM for real property as collateral.
One day in the future I can imagine “AVM Value” being ubiquitous to “FICO” scores for collateral valuation on a large scale. They could simply use the average of 3 or more AVMs or a similar metric.
FICO Scores are accepted as accurate for determining creditworthiness of borrowers. 800 gets better terms than 650. FICO scores are determined by top secret algorithms, just like AVMs.
Set higher fees! WAY higher!!!
If this gargantuan increase in time and reporting demands it must be a 50% increase at minimum. They cannot enslave us
Well said-I started making the shift as soon as 3.6 was announced