Thank you MD Appraisers!

https://www.cnbc.com/2021/01/28/black-and-hispanic-americans-often-have-lower-credit-scores.html
Ignore that. The appraiser is the only market force.

Google this; Brookings institute, appraisal.
They seek to redistribute 156 billion or more in taxpayer sourced reconciliation funds, charge the handling fees for doing so.

https://www.ftc.gov/news-events/media-resources/consumer-finance/payday-lending
They tried to stop predatory lending, but failed. Where can bureaucrats shift blame for their own failed policies?

https://www.ftc.gov/sites/default/files/documents/public_statements/prepared-statement-federal-trade-commission-consumer-protection-financial-services-subprime-lending/p064814subprime.pdf
Ignore that, yesterdays narrative, no longer applicable today. Nobody went to jail, and that’s o.k.

I really can’t argue with that super informative and well presented reply. Thank you!

It looks familiar because it was posted here and not on the appraisers forum http://appraisersblogs.com/independent-fee-appraisers-under-attack-negative-press-attacks

We would love to move on but it is difficult to when we hear story after story about the “racist appraisers” and how we have contributed to the widening wealth gap for black families. Who will speak for us, if we do not speak for ourselves?

After she concealed her race, Black Indianapolis owner’s home value more than doubled. The homeowner suspected race played a role in her first two low appraisals. Now her experiences are part of complaints with federal housing authorities https://www.nbcnews.com/news/us-news/after-concealing-her-race-black-indianapolis-owner-s-home-value-n1267710

The Biden Administration Confronts Racial Bias in Appraisals https://www.deeds.com/articles/the-biden-administration-confronts-racial-bias-in-appraisals/

“Black appraisers say it’s been promising to see stories of race-based bias finally come to light because this has been an issue they have grappled with inside the industry and have seen it affect people outside the industry for years.”
https://www.nbcnews.com/news/us-news/black-appraisers-call-out-industry-s-racial-bias-need-systemic-n1269452

What It Will Take to Close the Race Gap in Home Appraisals
https://www.bloomberg.com/news/articles/2021-03-03/appraisers-acknowledge-bias-in-home-valuations

Acting comptroller discusses bias in appraisals
https://buckleyfirm.com/blog/2021-06-17/acting-comptroller-discusses-bias-appraisals

Appraisal Foundation: Appraisers must take course on bias
https://www.housingwire.com/articles/appraisal-foundation-appraisers-must-take-course-on-bias/

Couple says they faced discrimination in home appraisal because of wife’s race
https://abcnews.go.com/US/couple-faced-discrimination-home-appraisal-wifes-race/story?id=73203432

Home appraisals: Hidden camera investigation reveals race could affect value (Marketplace)
https://www.youtube.com/watch?v=mQoZPuL08dQ

When race plays a role in home appraisals
https://www.inquirer.com/real-estate/housing/racial-bias-real-estate-appraisal-20210127.html

…

We need to move on from this topic as it has been beaten to death. We have no evident in support of the allegations, no reports have been submitted for peer review and I am not aware of any reports which have been submitted to a state board. Its short, its a witxh hint with no standing at this time. Until we have evidence these baseless postes have no merit. Show me evidence or stop posting multiple back to back articles that cannot be resolved. What do we really expect to gain from baseless articles with no way of determining if racism was actually a factor. Let’s more on until we have.substance to actually analyze.

This is up from 45% just 3 months ago and up from 5% in 2017.

These AVMs do not have to be as accurate as a boots on the ground appraisal. They just have to be ‘good enough’ based on total risk-analysis / underwriting of borrower and property together.

100% non-appraiser (AVM) will never be achievable by any stretch of the imagination. And, not for most FHA assignments either due to high-risk and heavy reliance on accurate collateral value in the event of default.

60% is doable as Artificial Intelligence gets better. Maybe even 80% in certain locales.

The use of AVMs on mortgage lending is also based on Credit Score of borrower and Risk Analysis.

The low risk properties with robust data, closest to the 50th percentile price ranking, are pretty much gone forever for boots-on-the-ground appraisers and won’t be back, along with rate and term no cash out refinancing.

Appraisers won’t be replaced on high-risk loans and the outliers, where the AVM returns a low and unacceptable Confidence Score, or, can’t even identify the property electronically.

And, appraisers will still be needed for Commercial, Apartments, Special Purpose, Proposed Construction and so on. I foresee Collateral Valuations however for certain categories of commercial properties being automated too. This is fairly simple.

The attacks on appraisers over racism has unfortunately become hyper-political.

President Biden has placed a mandate on HUD Secretary Marcia Fudge to take action against appraisers for what’s mistakenly determined to be systemic racism by appraisers, with no science or evidence to back up the claims. I do not believe that these claims are coming from AVM proponents and developers, but from other parties seeking equity and political power.

The main impact on most appraisers will be to take additional continuing education. Realtors too (I’ve been a R.E. Broker since ’84 and a Certified General Appraiser since ’75).

Unfortunately, some appraisers, who did nothing wrong, will forced to pay the price as sacrificial lambs, with legal charges of racism levied against them by HUD, and, referrals to their State licensing agency too, to teach the rest of us a lesson of what might happen to us if we don’t follow the party line.

AMCs will of course be marginalized through this process. Some will wither away and others gobbled up, until only a few big ones remain.

Eventually, most residential mortgage appraisers will be employees of the AMCs, not independents. This process will begin as many are already hiring and training Trainees. Those trainees will remain as employees for much of their careers.

Fortunately, there’s plenty of work out there, beyond mortgage origination. One just has to make the decision to do so, then, make the leap. I left the Banking business in 1984, after serving stints as Chief Appraiser at 3 Financial Institutions, due to extensive internal fraud by the BOD, and never looked back. In 2000, when I saw where AVMs were eventually headed, I also decided to get away from mortgage origination.

I’m not sure if letters to Congressmen or any Agencies will be fruitful. The Appraisal institute, TAF, ASA and NAR have already capitulated to avoid Political fallout by doing as told, as will licensed appraisers and Realtors, through what some might call re-education camps /CE.

http://www.CraigGilbert.Net

https://homeownershipcouncil.org/the-untapped-potential
“The fact is that most underserved borrowers can be served by loan products that already exist in the market, and it is the delivery system that is failing to reach them.”
People whom don’t understand lending are likely unaware that the governments own ATR and QM rules are substantial hurdles. Lenders have grading and performance requirements too. Again, those are concerns for economic development and employment, lending and insurability rule making, the valuation department merely measures the results.

Those reviewing these systems may feel like it’s all crashing down on them, perhaps being a part of the effected populace or at least empathetic. They need someone to blame because they don’t understand the lending system. The call to action is feverish. There is always the option to wind down the GSE’s and get the government out of the business of lending and insuring… The mantra of the day, government must always grow and never shrink. They will not reduce the taxation willingly. The end result is poisonous protectionism as the cure creates more harm in a recurring cycle that continues as long as the size of government increases. The narrative has legs and is walking on it’s own now. There is no stopping it.