New Jersey Draconian Penalties on Appraisers
The bill proposed by New Jersey Senate lawmakers to create steep penalties for real estate appraisers who undervalue homes because of the owner or buyer’s protected characteristics has been met with both praise and criticism. Supporters of the bill are lauding its potential to combat discrimination in housing transactions, while critics worry that it could lead to unintended consequences due to its disregard for appraisers’ motives.
Violators would pay $10,000 on a first offense, $25,000 on a second, and $50,000 on a third.
On one hand, proponents argue that this legislation will help protect against discriminatory practices when it comes to home valuations and ensure fair treatment for all buyers regardless of their identity. They also point out that violations would be subject not only to hefty fines but also restitution payments equal to the cost of any appraisal found guilty as well as mandatory attendance at anti-bias seminars which should help raise awareness about implicit bias among appraisers going forward.
Republican critics of the bill, however, expressed worries that it would lead to unintended consequences. They argued that appraisers could be unfairly penalized for undervaluing a home due to factors other than bias or prejudice. For example, an appraiser who simply made a mistake in their assessment and was unaware of the homeowner’s protected characteristics would still face steep fines if they were found guilty. Additionally some believe there is insufficient evidence linking racial disparities in home valuation specifically biased behavior amongst professional appraisals rather than other factors like market conditions or location.
It is clear that this bill has many flaws which will likely create more problems than it solves. The reality is that there isn’t much evidence proving discriminatory practices by real estate appraisers against people with certain protected characteristics; yet here we are with a new law requiring violators to make restitution equal to the cost of the appraisal as well as attend anti-bias seminars and fines up to $50,000. It’s almost comical how lawmakers continue passing bills without taking into account any potential repercussions for those whose only crime was offering an educated opinion based on data points available at hand.
In its current form, this legislation seems destined for failure as well as financial hardship for those unfortunate enough to fall victim to its draconian penalties!
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Absolute moronic insanity. It PROVES that no one outside of those trained in valuation have ANY clue how appraising works. Our job is and has never been to try to INFLATE an appraisal to make all recipients of an appraisal ‘happy’ no matter what, to avoid being sued or fined. Our job is and has ALWAYS been to provide an UNBIASED, fact-based opinion of value-based on the available market data. These fines are threats against appraisers and ARE BIASED and will PERPETUATE the nonexistent issue they are claiming to be avoiding. The entire premise of this THREATENS APPRAISERS to “make sure your appraised value matches whatever number any member of any protected class FEELS (unsupported by fact) their home is worth or you are screwed, will be fined, seen in court, then potentially lose your entire career and livelihood.”
“Republican critics of the bill, however, expressed worries that it would lead to appraisers who simply made a mistake in their assessment and was unaware of the homeowner’s protected characteristics would still face steep fines if they were found guilty”.
Typical crybaby hypocrites. Republicans want nothing to do with common sense guidelines, or law & order .
The left is always bending the truth. You omitted the most important part: DUE TO FACTORS OTHER THAN BIAS OR PREJUDICE
“Republican critics of the bill, however, expressed worries that it would lead to unintended consequences. They argued that appraisers could be unfairly penalized for undervaluing a home due to factors other than bias or prejudice. “
yes “other” duh.
as in misrepresenting and utilizing misleading neighborhood comps, data, and locations.
try to keep up.
In other words you believe that if an appraiser is incompetent and utilizes wrong comps, data, etc. then he must be racist/biased! smh
Never attribute to malice that which is adequately explained by stupidity
Are you an appraiser? Don’t you prep for your assignments without knowing the racial identity of the appraisals completed for lenders? Furthermore, which is worse for the borrower — to appraise a property above market or below market?
Are you serious? This is nothing more than WOKE BS and government overreach. Pure ignorance by the Democrat Socialist Party as usual. Whatever they accuse others of is what they are doing.
typical “woke” nonsense from fake conservatives who lack morals or ethics.
woke is the same as pol. correct…just a new trigger word for the uneducated MAGA crowd.
I’m sensing severe TDR in this one…
What’s it like to live life like a parrot in a cage, screeching red blue red blue all day?
You were saying something about ‘educated opinions’? Bruh, turn off the television.
you should go back to your basement and wait for your mommy to feed you and stay out of the big people conversations
typical response from the weak & ignorant.
HH, I don’t usually feed the trolls, but what makes you think that you are qualified to determine what “common sense guidelines” for appraisers are? You obviously are not an appraiser and appear to be in way over your head. So, perhaps, presenting a valid argument for your position in lieu of name-calling would be more persuasive and/or at least meaningful. Of course, that would require some heavy lifting by the mind, which is never easy but worth the effort if you really care. I hope this helps.
Troll? Name calling? You gonna cry… boo hoo.
I guarantee I have more experience appraising than you do.
2nd. Common sense guidelines? Is there something confusing about promoting or exhibiting straight forward ethics in appraising? That IS the issue here. It is appropriate to question what a “educated” opinion based on available data points is. Lender, private person, government, etc.
Appraisers are quickly doing assignments without deep thought, research, or proofreading. That is why there is more evidence of bias, misleading data, and geographical incompetence.
But that is what happens when the lazy & greedy take lower fee assignments & rush everything with boiler room mentality.
Try to keep up & pay attention.
The snarky combative discourse you have initiated from the start of this discussion is typically referred to as trolling on-line. What makes you think I want to cry?
Possible, I don’t know you and I don’t make silly guarantees born of ignorance, so I obviously can’t say what your relative experience is. However, I can state that I have appraised over a thousand commercial properties since starting in 1983 that includes every sort of office, retail, industrial, agricultural, and residential property including shopping malls, hotels, orange groves, golf courses, high-rise luxury apartments, car dealerships, college campuses, marinas, medical centers and everything in between as well as residential homes as part of large subdivisions and PUD appraisals; in every part of Florida, most of Georgia, East Texas and a couple in Ohio.
Those guidelines you refer to, that have been in place since before I started, is why these new guidelines, laws, and fines are redundant at best, and caustic virtue signaling by ignorant politicians seeking to pander to ignorant race baiting activists at worst. Everybody can have an opinion, but some are more valid than others.
There are certainly sloppy appraisers, just like in every other profession, who do not diligently perform their duties honorably, but that is not the issue here, is it? It is the destructive new legislative agenda of DEI infiltrating the appraisal industry. Nice try moving the goal posts.
I do pay attention and am way ahead of you, but thanks for the encouragement.
Mark, well said and Merry Christmas and Happy New Year,
Thanks, Bruce. Same to you.
I had sort of higher hopes for this trolling event. Sadly, it fizzled out. Just when it was getting good too, lol.
Your pal; Friendly neighborhood insurrectionist. Of course, you can’t take anything I say seriously, or anything any conservative says seriously for that matter. Because there is only one party. The state. Omnipotent. Ever present. Always watching and supervising everyone’s behavior. Correcting those whom fall prey to independent thought and logic. Winston, how many fingers am I holding up now?
A view from someone who has no idea what Appraisers do. A fine of $10,000 for the first offense would put most Appraiser out of business. If that’s what you want, good luck buying a home in New Jersey.
I agree with one of the comments…I would charge $10,000 to perform an appraisal in New Jersey if I’m subject to such fines.
So this is what would happen if something like this were passed. Protected classes of homeowners (IF the Appraiser knows the race of the homeonwers) will be over valued, because Appraisers cannot afford to be sued and pay $25,000 to $50,000 for an offense that they cannot prove. Then a few years down the line when they cannot sell their homes, they go into foreclosure and they will…you guessed it…BLame the Appraiser once again but this time for OVER-VALUATION of the “protected class of homeowners”. Sound familiar? What a joke this is. Try placing the blame where it is due…Lenders and Realtors. Not Appraisers! We are the weakest supported group of professionals that they can easily pursue and sue so we are the ones thrown under the BUS.
They have no clue that if you remove the ONLY neutral party to the transaction that stands to gain ZERO financially by the closing of the transaction that the market will go off the rails and then they will shake their heads years later wondering what went wrong!
Simple. Make certain you are ONLY doing appraisals for Buyers/Sellers that are the same as you. Review which classes are protected. Avoid whenever possible. If you receive a request to complete an appraisal report for anyone in those classes….just pass. Sometimes you may not be able to tell…..just do your best. Minimize the risk. You’re an independent contractor. You cannot be forced to do a job you don’t want to do.
…and this is the other unintended consequence; not enough Appraisers to do the work as many will avoid any areas that could be an issue. Then they will complain that Appraisers are avoiding them or that the time is extended trying to find an Appraiser to do the job. They want to sue us and we can make that impossible for them to do by refusing the job. Those who are pushing this bias narrative will wind up hurting the very people they are trying to protect!
Racial profiling is not the answer either.
If you are unable to tell when you get there and they fit the class. Simply say I am feeling sick and leave. Tell the client it is not to your best interest at this time to complete the report. I have told vendors that “not to my best interest many times.
Who lined up those deals in the first place, commissioned based agents and commission based lending companies? Buyers can be handed additional disclosure forms that they may use their appraiser complaint settlement money to help offset down payment requirements if they want to try again. But they’ll never escape the debt trap which occurs from amortized commissions over a 30 year schedule! HO HO HO Merry Christmas!
How do you make the determination that a buyer/seller is the same as you?
Yes, there is still active and systemic racism in this country and will be for years to come. However with all of the current oversight, UAD checks and balances and algorithm and human review I do not think it is in any way possible to perpetually over/under value properties. It just isn’t possible and certainly not on any large scale basis. This entire concept is flawed IMO.
The GSE’s appraisal developmental guidelines, the appraisers Uniform Standards of Professional Practice guidance, the CFPB Reg Z confirmations and interpretations, and the core regulatory guidelines contained within Dodd Frank, Regulation Z on Appraiser Independence, and FIRREA Title XI not enough regulatory guidance on the matter?
The aggrieved whom were unable to line themselves up for debt traps will rarely have anything. Waste of time and resources. The bright side might be some incentive for the general public to bring lawsuits against appraisal management companies.
A rational analysis of this bill results in a conclusion that the people issuing it are ignorant morons if not completely insane, however, that assumes they care about any of the parties involved and have good intentions. But their (puppet-masters) purposes are not what they state, it is to eliminate appraisals completely paving the way for more and bigger loans to people who will default (as noted above) and implement the Great Reset (You will own nothing and be happy!).
Unfortunately, You are exactly right. 🙁 They don’t want an independent, neutral professional. They want control….and it’s coming.
Still waiting on the conclusive data that suggest racism is a problem in the appraisal industry.
Hilarious they think there will ever be a second and third offense. Who is sticking around in this profession after a $10,000 fine? Or any profession. At least I live in a state to where this craziness will never happen.
Bingo. They want appraisers gone so that they can line their pockets faster, without as reliable, credible, unbiased party being a cog on the wheel to halt when the consumer is being railroaded into a bad loan that is unsupported by the market.
A steady stream of ever higher home sales price also keeps that increased tax money flowing which is where the real incentive lies. On the flip side, finally the institutional investors will have more reo stock to work with again. Will someone please answer the question; What exactly is wrong with lower housing prices? In this brave new world it is now considered discriminatory if a borrower does not pay over 100% of the market value for real property. Don’t worry, the planned economic collapse is right around the corner and if we don’t turn this around soon, none of this will even be relevant in about a year or so.
Eliminate the so called protected classes. That makes their members special. No one is or everybody is.
https://pub.njleg.state.nj.us/Bills/2022/S1000/777_R2a.PDF
Final bill if I’m reading the chain of documents introduced correctly.
Be sure to read the entire bill, especially if you are in this state. The borrower will be handed ahead of the appraisal, instructions on how to complain to the states civil right division upon any suspicion of a discriminatory appraisal. Then the civil rights division within the government will be the ones actually performing ‘the investigation’, and will forward those findings to the appraisal board. Specifically the civil rights division appears to be a sub section of the department of law and public safety.
https://pub.njleg.state.nj.us/Bills/2022/S1000/777_I1.PDF
Initial bill. Introductory paragraph(s).
Under this bill, holders of appraisal licenses or certifications, or12
appraisal management company registrations, may have their13
licenses, certifications or registrations revoked or suspended, or be14
subject to fines, if the board determines, after an appropriate15
investigation, that the holder of the license, certification or16
registration has knowingly engaged in a discriminatory appraisal of17
a residential property on the basis of the property buyer or property18
seller’s race, creed, color, or national origin.
Then back to the final bill, observe the language changes, subbing out direct reference for appraisal management companies. And am I reading this right in the updated bill, that the appraiser would also be discriminating against the seller, their agents, the occupants, and the occupants of all properties contained within that neighborhood? They threw a lot in there on the end. Anyone can initiate these complaints, from the commission based agents to the neighbors of the aggrieved whom live in the same neighborhood. So much for the appraiser independence valuation pressure hotline. They’re setting up a hotline to complain against any appraiser whom does not bow to the pressure instead. There will be a state funded complaint avenue which goes directly to civil rights lawyers employed by the state, whom will be tasked as part of their normal course of employment, with identifying ‘appraisal bias’ against ‘protected class people’, which will generate ten thousand dollar fines for that same government body, until the well runs dry. They will freely pressure the appraisal board whom of course, will not be able to keep up. Is that possibly, a conflict of interest scenario?
3. a. Consistent with the provisions of section 8 of P.L.1978,23
c.73 (C.45:1-21), a holder of a license or certificate under P.L.1991,24
c.68 (C.45:14F-1 et seq.) or registration under P.L.2017, c.7225
(C.45:14F-27 et al.) shall not discriminate in the appraisal of real26
estate on the basis of the actual or perceived race, creed, color,27
national origin, affectional or sexual orientation, sex, gender28
identity or expression, disability, or other characteristic protected29
under subsections g. and h. of section 11 of the “Law Against30
Discrimination,” P.L.1945, c.169 (C.10:5-12) of the property buyer,31
property owner, agents of the property buyer or owner, or present32
owners or occupants of the properties within the neighborhood of33
the property subject to appraisal.
One ponders how susceptible the individual appraisal board members will be to the pressures of other state departments such as lawyers from the public safety division shoveling a constant stream of investigative reports their direction whenever a borrower is protected from debt traps via the independent appraisal process.
https://www.fdic.gov/news/financial-institution-letters/2010/fil10082.html
Missing the IVPI proposal yet?
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf
While I cannot speak for any other appraiser, 90% of the time – I do not know if the buyers are in a protected class, and many times for the sellers as well. I have appraised homes for all types of people, and as I value my ethical duties, would never even consider changing a value because of a certain class. I’m sure I speak for others as well. The value of a home is based on the market sales, improvements or disrepair, location, etc. – nothing more or less. No one should feel they must inflate (or deflate) the value of a home based on this form of bias for fear of expensive reprisals. I have never met another appraiser who would make “racism” decisions for the value of a home, although there may be a few who don’t value their license or ethics. This law is extremely damaging to home valuations and could cause inflated values to become future nightmares. I would have to agree that perhaps appraisers should avoid appraisals in New Jersey altogether, or charge an appropriate fee. This type of devisive practice will spread to other states and create complete havoc and is inherently dangerous. Perhaps there are too many protected classes and we should all be equal.
I agree with everything you said until your last thought. There are protected classes because historically we have created the need for protective classes. Equal is not always equal especially when money is involved remember there are people living in our country who are the grandchildren of slaves. There are also people in our country and some of them with lots of money and power who don’t accept many others as equal. But insane laws like this in NJ will do more harm than good. Like my grandfather used to say we’re going to wreck on one side of the road to keep from crashing on the other lol
ClairB said; ‘No one should feel they must inflate (or deflate) the value of a home based on this form of bias for fear of expensive reprisals’
Sure, in theory. Except if you’re in the real world and accepting amc appraisal management company assignments. Because if you upset even one of the hundred people working there, you’ll lose every single lender they contracted with. If you upset even one lender person whom they contracted with, the call will come down from upstairs and you’re out. It’s basically impossible to maintain appraisal independence if contracting with most of the amc’s out there. The appraisal management industry, the long arm of predatory lending.
People should understand the racial bias argument is just a circus show distraction for the plebes, for the under educated and propagandized. Something to distract them from the root cause which is the actual problem of economic disparity. First receivers of money and a fiat currency system! If the people would stop buying it, they’d stop selling it.
100% truth!
This is a direct and precise result of appraiser independence being carried to the normal extreme.
Appraisers are naturally independent and opinionated individuals.
should be.
But how many national realtor associations are there? auto workers? coal miners? hotel workers?
now how many thousands of appraiser associations are there? and out of all those-is the TOTAL membership representative of ALL appraisers? or are they lucky to total out to 25%
until all the groups quit trying to be the main dog and just join together into ONE trade association, there will never be a single voice.