Isn’t that Just PAVEY! PAVE Response and Marcia Fudge
Folks, the American Enterprise Institute Housing Center has been, to date, the only major voice in the wilderness I’ve seen publicly defending appraisers and the appraisal process. They have refuted most of the highly touted ‘studies’ promoted by Dr. Andre Perry and others, which the current administration has considered the gospels of appraiser intolerable performance.
The Biden-created ‘black oriented’ 13 agency PAVE Taskforce, co-chaired by HUD Secretary Marcia L. Fudge, who is a black lady, issued another report recently. AEI’s response to that is in the PDF below. Please read it.
Meanwhile, Ms. Fudge recently appeared at the 75th Annual National Association of Real Estate Brokers convention and of course continued her ‘appraisal bias and discrimination’ rant in a very rousing speech to the attendees.
So who is Ms. Fudge? In my view, a capable, well-liked lady, but with a singular ‘black’ perspective. A ‘black college’ graduate, with a law degree from another ‘black college.’ While in college she became the National President of a ‘black’ sorority. She was the first ‘black’ 2 term mayor of her primarily ‘black’ population city near Cleveland, OH. She served as Chief of Staff to a ‘black’ congressional representative in Washinton DC. When that lady died unexpectedly, Ms. Fudge was elected in 2008 to serve that congressional district, which over the years has been redistricted and expanded to include more ‘black’ voters. In 2021 she became the 2nd ‘black’ Secretary of HUD.
By her own admission stated in her speech at the NAREB convention (and other places prior): “I live in a Black neighborhood by choice; my home is bigger, my lot is bigger, yet my home is valued less than the White neighborhood down the block; this must change,” she said passionately, drawing from her experiences.
Is it possible, from her own experiences in life, that Ms. Fudge is inherently biased in her own viewpoints? If I was a Martian, living on earth, and only hung out with Martians who have three ears and 4 eyes, do you think that I might be influenced by other Martians with similar attributes?
Here’s her apparently ‘black’ neighborhood, from Google Earth, in the photo below, which I found using public records. I’m curious where the ‘white’ neighborhood with higher values “down the block” is located, and if so, why is it that way?
That’s a question to ask of the County Assessor, because real estate appraisers just use appropriate local sales data and the published appraisal guidelines to evaluate properties. If there are any Cleveland, OH area appraisers who see this and can give me some insight to the neighborhood values, please respond.
Here’s another thought for you to ponder: HUD, a governmental agency, is attacking appraisers who do their work per the guidelines established by two “quasi-governmental entities”, the two GSE’s, and two other government agencies, HUD/FHA, plus the VA. In short, the administration of one government agency who may not fully understand appraisal procedures is taking aim at other and their own agencies policies! Do you understand the absurdity of this?
HUD and PAVE is trying to work publicly and via the back channels to subvert and modify the way appraisers are instructed to do appraisals, which has worked well and properly for decades.
Now isn’t that just peachy!? Or should I say “PAVEY.”
Dave Towne on e-AppraisersDirectory.com
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I’ve watched quite a few webinars where Fudge spoke. I believe she has biases shaped by life experiences just like Andre Perry. I read Andre Perry’s book. Fudge talks about her biases in the webinars. These biases have clearly affected their work, what they do and what they say. I say this as a Latina who has experienced biases against me and has seen much worse happen to others. That said I can still clearly see that racial bias does not have a major influence on appraisal values. I agree with AEI research which shows the same.
Incredible from people so firmly entrenched in their own managerial class segment and other niche pockets of society. Outsiders need not apply. The human choices people make create conditions which influence market reactions to price and value. When the ability to participate in that segment of the market becomes limited, there is a reduced potential due to a smaller pool of market participators. Maybe if they stopped running all the three eared types out, the local market would respond favorably to the increased desirability, improved open access, and support higher market valuations. Or maybe there is a higher prevalence of people with lower credit, or lower income, or higher crime. Or maybe the sun just does not shine on that peculiar plot of accursed land. However I’m confused, that does not look like the stack and pack housing they want for the rest of us. There are many valid reasons for home value discrepancy from one location to the other, and racist appraisers ain’t even on that list.
Then again, this is the provenience of our own lands where we all live, the American desert we all share. Those whom do not know history remain condemned to repeat in a never ending cycle. It is simply impossible for a government to save itself from it’s own people. If the managerial class really wanted to help, they could simply back off, take lessons from history, cut the red tape, allow more freedom and liberty for individual citizens to live their lives free of an excess of government imposition and free of excess taxation where monies are inevitably embezzled and wasted through inefficiencies. Then we’d all have more opportunity irregardless of trait. Besides, what they advocate for, higher housing prices and higher housing price taxation, will not help anyone in the end. In times of plenty our houses and lands should cost less, not more.
Related
https://pagetwo.completecolorado.com/2023/04/26/caldara-central-planning-housing-affordable/
And this.
https://appraisersblogs.com/top-dei-bosses-at-financial-institutions-have-a-problem-diversity
We are not allowed to talk about the one group that FBI statistics tells us is far more violence prone, drops out of school more often and tends to be the sole group featured in every YouTube video regarding violence, robbery and mayhem. Those members of that particular group who can afford to leave just up and leave those group neighborhoods and no other group wants to live in that particular group neighborhood even though prices are cheaper. Instead of taking personal responsibility, members of this group continually blame other groups for the results of their own actions. Simply amazing.
This is a good piece as usual Dave, thanks for sharing. I’ve watched several hearings and clearly there is an agenda to scapegoat appraisers. Tobias Peter’s testimony was very compelling at one hearing, by introducing one data set, the applicant’s credit score, the Freddie study just falls apart. While I do believe Ms Fudge is bias herself she is of little importance in the grand scheme, I think you have touched on the primary issue. Decades of HUD policy which appraisers have been forced to follow is the primary cause of value gaps between neighborhoods. Redlining is obvious, but actions like eminent domain which destroyed neighborhoods, placing toxic externalities close to minority communities along with the host of other things done with the government’s blessing are truly at fault. Appraisers offer an opinion of value, its the lenders and underwriters who decide who gets a loan and how much, many times the appraisal is used as a weapon to deny a credit-worthy person financing. There seems to be a movement in the lending community to appraise the borrower not the asset, lets see if the banks do this equally for all borrowers. If history gives us any clue, they will not.
This is simple Ms Fudge…..Go to the heart of the issue! TALK to the buyers. Ask them WHY they are paying less in minority neighborhoods. Get the hard answers, fix them and values will rise. Some things cannot be fixed and those in and of themselves hinder values..Not The Appraisers. Why did Fudge decide to live in a Black Neighborhood? She chose to be around like minded people and those who look like her and that is her rightful decision to make. But if BUYERS decide they don’t like a particular neighborhood over another due to racial make up, that is THEIR decision to make, be it biased or not. Bottom Line: Appraisers have ZERO to do with the decisions that buyers make. Until Fudge, The Goverment & The Administration get this very real and simple fact, calling the messenger (US) biased it just the easy way out to get the minorties more wealth and when they need to sell and are under water….guess who they will blame. US! Stop shooting the messenger and do NOT let the tail wag the dog with the ROV’s just because the owner does not like the appraised value! Give me a break
I find it very interesting that Ms. Fudge doesn’t seem to understand that the fundamentals of appraising a property. When searching for comparable properties, the appraiser must first search the Immediate neighborhood. From Fannie Mae Selling Guild B4-1.3-08, Comparable Sales (03/02/2022) “Comparable sales from within the same neighborhood (including subdivision or project) as the subject property should be used when possible, and must be used in certain instances (see below). Sale activity from within the neighborhood is the best indicator of value as sales prices of comparable properties from the same location should reflect the same positive and negative location characteristics.” The appraiser can’t just skip the neighborhood and go down the street to get a higher value from a competing neighborhood.
Agree and that is EXACTLY what they would like us to do. Calling it Reparation values. Go to that white neighborhood down the street and use those comps to provide value. Now I cannot see Fannie, Freddie, HUD going along with this idea, but that one Appraiser in MARIN county was sued for doing just what we should…used comps inside the same development as the Subject. They claim we are perpetuating the low values and built in bias over the decades!
When the very people they are trying to protect are under water on their over inflated loans all hell will break loose and again they will try to blame US the Appraiser for letting this happen! First of all any Appraiser who even considers going outside the neighborhood to artificially inflate values should be fined and have their license revoked. But some will do this to avoid being SUED! Very sad state of affairs. As Tobias Report shows the unintended consequence will be that many Appraisers will AVOID at all costs appraising homes in areas where the owners will cry bias and sue you!
Oh, handbook references. That is an inspired take.
https://www.hud.gov/sites/dfiles/SFH/documents/Handbook%204000%201%20Redline%20for%2020230118.pdf
HUD pdf complete handbook online. Use Control+F to bring up the search bar.
Enter the search term; Comparable.
There are 100 instances according to results. Too many direct references to bother even quoting or clipping. This is incredible, the HUD director stands in naked violation of the HUD handbooks own directives and guidance. There are 862 results for the word; appraisal. 52 matches for the term; director.
Hey, look at this, now that’s worthy of a screen clip. Does anyone have a pen, a piece of paper, an envelope, and a stamp I could borrow? Or basically every time Mrs Fudge mentions an appraiser, call the complaint hotline. Has she even read the dang HUD handbook?
If the Mortgagee suspects HUD employees or contractors were involved in fraud or
material misrepresentation, the Mortgagee must refer the matter directly to HUD’s
Office of Inspector General (OIG)). All referrals to the OIG should be made to the
OIG Hotline’s call center at 1-800-347-3735 or via the OIG Hotline’s website at
http://www.hudoig.gov/hotline.
In response to the notion that avm’s will be less ‘biased’ than human appraisers. And also to the notion that relying on assessors values is good enough for lending purposes.
https://www.kunc.org/news/2023-08-03/in-rural-larimer-county-scant-property-sales-data-mean-more-property-valuation-errors
The hits keep on coming.
Automatic valuation models utilized by county assessors. Incredible fail rates where more in rural and semi rural are not accurate then were. Exponential over valuation levels, hundreds and hundreds of thousand per instance.
In my area of Los Angeles, California assessor values are wayyyyy off. They have NOTHING to do with market value. Also, older properties in older non-existent cities that merged with LA with more than one home on a lot only show the front home. The full records were never recorded when they merged with LA around 1940. Some merged even later and you still only see the front house. Building and safety doesn’t have the records either. I contacted the assessor and told him they were losing a ton in property taxes because most homes in those areas have a second or third home in the rear if not units.
We all know AVMs are not accurate or biased for many reasons. The lenders have been promoting AVMs as less biased to HUD just so they can make more money and control the values, loans and their profits. It’s definitely not because they’re less biased. AVMs are more biased because they don’t consider many contributors of value such as condition, actual size, actual bed/bath count, additions, modifications, view, lot type, specific location in an area… Those factors can change the value greatly to the point the value is meaningless.
Exactly. The specific reason why? Because a damned automated software program is not a human being. Humanity in general needs to take a big step back from this worship of the new golden idol, as if tech can replace the fruits of labor. Mary, thank you again.
One of the things I’ve found most interesting, is looking into other data sources and news outlets, only to find they’re already and long since concerned about these issues, while actually being completely unaware of how the events and changes are being actively incorporated into the valuation and lending industry. Which of course, they all rely on at some point in the past or future. We are not alone, but need to network better. These are hot topics and I think you’d make a great personality to appear on various talk shows, and other article writing topic coverage matters, as one more voice of reason in the defense of traditional America and our cherished republic. The most important character identity any one of us can embrace at this time is that of a freedom fighter. We hold the line for liberty and accountability. One specific subject matter at a time. Assessors were traditionally the absolute expert on land and land worth. Not anymore. We need to return the power to the people and we can do so by highlighting how automation creates more harm than good. Fascinating that those guys actually wrote that story about assessors automatic avm algorithms getting such skewed results. Find them, post them. And if none exist, get on the horn and spark their imagination to discover what others know is already right there, just not paid attention to yet.
How is Ms Fudge going to explain these neighborhoods being taken over by illegal aliens who then repair the homes and the values go UP because people are willing and able to pay for them!! Meanwhile… how does this help housing AFFORDABILITY???
I asked admin for post above to be removed, just covered that all before.
Found yet another gem free reading news today. Oh the miracles of the internet.
Who really wants to help the poor? Article on real world results of subsidized housing.
https://pagetwo.completecolorado.com/2021/07/21/caldara-affordable-housing-scheme-a-con-job-on-the-poor/
WOW had no idea. Will the main stream
MEDIA report on such an atrocity? Doubt it! Does not fit the left support the poor and the white man/woman does not narrative. Thanks for sharing! Feel sorry for those poor people who have no clue until they go to “cash in” for retirement.
https://i2i.org/about/our-people/jon_caldara/
I make a special point to read that guys articles lately. He really gets some important issues facing society and has an interesting writing style. I disagree with him on quite a lot but also, such an interesting take. And when it comes to housing, how regulatory structure effects access, and protecting my gas powered lawn mower from being kidnapped by lunatic climate change zealots and never seen again, he really gets it.
What you’re observing with arguments such as ‘that white ladies house is worth more up the block’ argument. That’s just jealousy and abuse of power, utilizing the force of government to get what you want. Because they sure as hell can’t change the culture which leads to repeat instances of those problems and value disparities. Laying the blame on appraisers and even lenders is not the whole story. The rules of the past may have been removed, but not surprisingly, the exact same market responses which can be observed in value analysis are still present. Go figure, that just because someone within government said a societal difference went away, the societal difference did not actually go away. Can we get Ben Carson back in there? He was a decent manager, because he just left the programs alone and did not really change very much.
https://www.realtor.com/news/trends/ben-carson-hud-legacy/
Sort of a how it started and how it’s going now sort of deal. Not looking good and HUD’s new optics are just frankly horrendous and more biased than ever. The smart money is all gone anyways, fha is a fine place to start out, and then immediately go somewhere else at your first possible chance. Extra points for everyone, just send them to hud. And once you get wind of what ‘affordable housing’ really means, all the government controls behind that, you’ll never see these initiatives in a good light ever again. They could allow housing to become affordable again, if they’d stop interfering with everyones contractual obligations and feeding defaulted units to big corporations upstream of regular people. But then whom would substitute those big political donations and special favors? And if they allowed such a thing to happen, for irresponsible people to get exactly what they deserve and deal with foreclosure and accountability, every one of them would personally deal with a little home devaluation too, exponentialized for all their rental properties. Can’t trust anyone within government these days. Don’t steal, the government hates competition.
Great news everyone! At least for the time being, Tucker is back and visible for those without log ons. I’m not sure if this is an official channel but certainly looks like one. I’ve waited weeks to watch the latest content.
The Ice Cube interview was just fascinating and provides important perspective on the matters of racial relations, opportunity, and spiraling housing costs which fundamentally change this country and how people interact with each other. Suggested watch, 20 minutes. Really hits home if considered alongside the pave taskforce and hud’s race specific panels. If you have the motivation, don’t miss the two hour long Andrew Tate interview, as that talks about a great many topics and near the end dives into racial relations and government structural changes as well.
https://rumble.com/v32ntri-episode-11-72723-ice-cube-x-tucker-the-studio-interview.html
Side note; There is also ‘tucker carlson on twitter’ account. I had thought that was official, than find this mirrored one as well today, along with several others. So these look like unofficial accounts which is what many people on the internet do now to spread content and bypass the tech industries insatiable desire to force logins and data track everyone. The accounts are up with substantial views though. Get them while they’re good and if the link dies, just find another similar one. For years people on youtube posted full episodes of tucker even though fox had tried to limit his reach and view, doling out all the other hosts full shows, but only providing viewers short clips of tucker. The market response was to post the full tucker episodes nightly on an infinite stream of pop up accounts. We watched those for years and are quite happy being able to listen to tucker again, now on rumble.