How Bureaucratic Overreach Turned Real Estate Appraisers into Scapegoats
If you’re a real estate appraiser in 2025, odds are you’ve already met Kafka. Not in a literature class, but in your inbox, via a letter from HUD, a complaint from a borrower, or a summons from a regulatory agency that’s decided your opinion of value is now a civil rights issue.
The federal government isn’t just investigating appraisers, it’s industrialized the process. Hundreds of licensed professionals are now entangled in HUD probes triggered by little more than a borrower’s disappointment or an activist’s press release. The complaints don’t need merit, just momentum. The goal isn’t justice, it’s leverage. The strategy? Exhaust, intimidate, and isolate.
Take Ken Mullinix, a seasoned appraiser with 35 years of experience. He’s been under investigation for years by HUD over a value opinion someone didn’t like. The agency has deployed contractors, who look, act, and email like federal employees but aren’t bound by federal conflict of interest rules, to dig into his work. The result? A scorched earth campaign where the process itself is the punishment.
Then there’s Shane Lanham, a Maryland appraiser who successfully defended himself against a baseless bias lawsuit brought by Johns Hopkins professor Nathan Connolly and his wife, Shani Mott. The case was built on vague disparate impact theory, a hunch, and a healthy dose of agitprop. The judge tossed it out, citing the plaintiffs’ failure to present an appraisal expert and excluding their sociologist from testifying on valuation. Lanham, meanwhile, presented two qualified experts and won on summary judgment.
But instead of closure, Lanham was hit with another lawsuit, this time by Connolly, who is now suing him for over $13,000 in legal fees incurred while defending the original, meritless bias claim. That’s right, after losing in court, the plaintiff circled back with a bill, demanding the appraiser cover his legal costs for the very lawsuit that got tossed out. It’s like setting your neighbor’s house on fire, then invoicing him for the matches. LoanDepot, the lender involved, quietly settled with the plaintiffs, reportedly for around $400,000, then exited the scene, leaving Lanham to fight alone. His business? Gutted. His legal bills? Growing. His resolve? Unshaken.
And now, meet Julie Friess, SRA, a seasoned expert in the appraisal world who’s worn nearly every hat the profession offers. USPAP instructor, litigation expert, course developer, editorial board member, diversity advocate, speaker, writer, mentor. Her resume reads like a blueprint for what it means to know this profession inside & out. But none of it mattered when the Arizona Department of Insurance and Financial Institutions, AZDIFI, came for her.
According to Friess’s own account, while hospitalized with pneumonia and pleurisy, she was hit with false charges of racism and bias. She requested a delay in the hearing, she was literally in a hospital bed. AZDIFI refused, citing vacation plans. They held the hearing without her. Months later, when she was finally well enough to review what had happened, she made a decision, she was done. Done with a profession that wouldn’t protect its own, that would target its most experienced voices, that would let politics override principle.
Friess says she never had a single violation in over 25 years. She’s been targeted, sidelined, and vilified, all while being consulted by chief appraisers, bank executives, and regulators for her expertise. Her story, as she tells it, is a sobering reminder of how quickly a career built on integrity can be dismantled by bureaucracy and bias.
So how did we get here?
It started with the Biden administration’s PAVE task force, which leaned on studies like Brookings to claim systemic undervaluation of homes in Black neighborhoods. But those studies failed to control for critical socioeconomic factors, income, education, credit scores, marriage rates, wealth. When AEI accounted for those variables, the so-called racial valuation gap nearly disappeared. Turns out, market value is driven by markets, not melanin.
Courts are finally catching up. Judges are demanding proof of intent, not just headlines. But HUD hasn’t gotten the memo. It continues to pursue appraisers like Mullinix and hundreds of others with the full weight of a $214 billion bureaucracy. The complaints often come from nonprofits acting as surrogates, backed by contract investigators who operate outside the usual rules.
This isn’t reform, it’s theater. A campaign to delegitimize appraisers, marginalize independent judgment, and turn every valuation into a political litmus test. It’s not about protecting consumers, it’s about controlling outcomes.
This is what bureaucratic overreach looks like: a maze of rules with no exit, a hearing held while you’re hospitalized, a lawsuit dismissed but still billed. It’s not about protecting the public, it’s about flexing power. Bureaucratic overreach isn’t a policy flaw, it’s a strategy. And if it can dismantle a profession as regulated and scrutinized as appraisal, no industry is safe.
Appraisers aren’t asking for immunity. They’re asking for due process, intellectual honesty, and the right to do their jobs without being turned into scapegoats for systemic issues they didn’t create.
Because when the truth is bent to fit a narrative, and expertise is treated like bias, the damage doesn’t stop at appraisers. It ripples through every profession that dares to speak honestly.
- How Bureaucratic Overreach Turned Real Estate Appraisers into Scapegoats - September 25, 2025
- The 24-Hour Appraisal Diet: Slim on Time, Light on Credibility - September 5, 2025
- The Harbor Model: Where Appraisers Take the Helm - August 8, 2025
Thankfully the case against Mr. Lanham for the $13,000+ legal fees as dropped. Thankfully. Should never have been filed in the first place.
They didn’t just make us scapegoats, they have/are purposely and with extreme evil prejudice destroyed/destroying the appraisal profession. Even though appraisers are having some success at pushing back – this is temporary and just a mild setback for the power brokers. Appraisers are just a testbed for their pure evil agenda.
Just received Working RE. An article labeled “5 Reasons AI Cannot Replace RE Appraisers”. Do you want to bet?
At the very least – drastically fewer appraisers will be needed and likely none will be needed in the very near future because:
> Until we are totally discarded – loopholes will continue to be created to exempt the need for appraisers
> We are rapidly headed in the direction where Real Estate is moving away from traditional value definitions (such as market value), to a system where real estate decisions are based on other criteria such as the agenda based whims of those in power.
>If your appraisal services include any type of litigation, tax appeals, etc – You will also soon have to fight more and more against a growing presence of AI in the court room. Your opposing side will be able to cast doubt on anything you present by exploiting their reams of data generated by AI (even though it may be significantly flawed). Courts may end up relying solely on AI.
>Currently, I’ll bet most appraisers are rubber-stamping a desired value just to avoid being sued and having to face nasty stuff from appraisal so-called authorities. If that is the case – why are appraisers needed anyway. [Side note: Some of the people on our state appraisal board are scary; and it is difficult to think they are investigating and judging us. Check out those on your state boards.]
>If you think non-residential real state will slip through the cracks – think again.
Shame on the secondary market players, various governmental entities, lenders in general, builders/developers, and real estate groups that either join in the conspiracy, or at least condone the destruction of appraisers. And to be fair, shame on the – way to many appraisers – that produce garbage/incompetent appraisals. You are assisting our demise.
Considering my county of practice (San Diego) is on pace to lose 12% of active appraisers this year (currently 629) I wonder if their is a connection to the facts in this piece? Of course there is. Of note, there are 13 San Diego County trainees with only 6 having a start date of 2023 or later. The remaining 7 trainees have starting dates as far back as 2014 (most likely never to be fully licensed). So, 1% valid trainee percentage and a net loss of 12% of active appraisers in the county. Nothing to see here, move along.
Seek the truth.
3 local appraisers in my AO retired in the last 90 days. I talked to 1 of them and they took a job at the county assessor office for a huge pay cut. He didn’t want the liability anymore.
The last CAREA meeting was a riot of angry appraisers who said they were leaving appraising when the new 3.6 Form rolls out, and the fallout from DEI and the potential lawsuits. Not too many appraisers are sitting on a pile of cash to defend themselves.
With a county population of 3.4 million and only 6 true appraiser trainees you would think the powers that be would act to protect the publics trust. Considering we have been determined to be the problem, they keep adding gas to destroy us faster.
Seek the truth.
Outstanding post.
Once the chimera of ‘Disparate Impact’ is removed, TRUTH has a chance again.
Add another victim
https://appraisersblogs.com/uncovering-flaws-in-fha-appraisal-n-loan-review-process/
Is there a case for Julie to sue AZDIFI? Because from where I’m sitting, this wasn’t just overreach. It was character assassination dressed up as enforcement.
I’m genuinely disgusted by how disgracefully she was treated. Charged while hospitalized, denied a delay, and left to defend herself in absentia? That’s not due process, that’s a demolition job.
She was an accomplished appraiser long before this circus. Her writing was sharp, her insights generous, and her expertise undeniable. She contributed to this profession with clarity and conviction, only to be steamrolled by rhetoric that’s allergic to facts.
We talk about protecting the integrity of the profession. Maybe we should start by not torching the people who actually upheld it.