Recap of the 4th ASC Appraisal Bias Hearing
On February 13th, 2024, the fourth ASC appraisal bias hearing took place. For those who were unable to attend, the video of the hearing has been included below. The hearing was a crucial event for the appraisal industry, and it is important for all appraisers to be aware of the discussions and topics addressed.
The panel of witnesses included:
- David Bunton, President, The Appraisal Foundation
- E.C. Neelly IV, Executive Director, Mississippi Real Estate Appraisal Board
- Maureen Sweeney, Principal, Maureen Sweeney, Real Estate Appraiser Ltd.
- Melissa Tran, Director, Texas Appraiser Licensing and Certification Board
- Jillian White, Chief Executive Officer, Appraisal Insights
One of the highlights of the hearing was the opening statement by Maureen Sweeney, one of five witnesses at the ASC appraisal bias hearing. Her opening statement is 13 pages long and well worth the read. In her remarks, she questioned the future direction of the appraisal industry and proposed several changes that could greatly improve its current state. These changes include disclosing fee structures, allowing trainees to sign appraisals, and addressing the impact of Automated Valuation Models (AVMs). Additionally, Sweeney called for regulation of offshore appraisal data review and brought attention to the fee issues caused by Appraisal Management Companies (AMCs). She also pointed out that the Dodd-Frank legislation has failed to uphold the public trust and emphasized the need for a more efficient and fair system that works better for appraisers on the ground.
Jillian White made a case for eliminating the Supervisor-Trainee relationship in order to rebuild public trust and diversify the appraiser population. She also suggested standardizing elements of the sales comparison approach with current data availability, stressing the need for states to identify bias or incompetence in appraisals and for balanced tooling between appraising and review. With advancements in real estate data and technology, White argued that there is less need for discretion in the sales comparison approach, and that states should work towards reducing this discretion. She also noted the difference in analytical tools for lenders and appraisers, and called for a balancing of tooling between field appraising and the institutional side of valuation. White pointed out that there is a strong desire among individuals to become appraisers, but they often struggle to find a mentor due to clients not accepting appraisals signed by trainees or limiting their role to only supervised inspections.
Melissa Tran identified major issues plaguing the appraisal profession, namely bias and lack of diversity. She highlighted that Texas has the highest number of PAREA participants, with approximately 36 individuals currently enrolled. In order to address these issues, Tran urged for a restructuring of licensing criteria and emphasized the need for additional funding for new initiatives. She also expressed her agreement with the suggestion of reporting complaint numbers and outcomes to the ASC.
E.C. Neelly IV brought attention to the concerning issue of a shortage of appraisers, particularly in rural areas. He also highlighted the commendable efforts of Melissa Bond in developing the MPAT program, which aims to address this shortage. Neelly emphasized the importance of utilizing the sales comparison approach in appraisals and the need for supervisor training in rural markets. He also called for additional training on bias in appraising.
David Bunton presented several initiatives aimed at improving the appraisal industry. One of his key proposals was the implementation of case studies on appraisal bias, which could serve as training materials for appraisers. Mr. Bunton also suggested that property inspections should be considered as experience hours, along with other types of experience in the real estate industry. These suggestions are currently being actively explored by the Foundation. Additionally, Mr. Bunton mentioned the ongoing review of licensing standards to identify and address any barriers to entry in the appraisal profession. He also revealed that a report on appraiser demographics will be released in the spring, with further studies to be conducted every 36 months. Another important topic discussed by Mr. Bunton was the recruitment of the next TAF President, as he himself announced his retirement.
In his recent podcast, Phil Crawford, host of the Voice of Appraisal, provided a breakdown of the ASC appraisal bias hearing. His analysis was hard-hitting and shed light on the important points discussed during the event. It is highly recommended for all appraisers to listen to his podcast and to stay informed about the current state of the industry.
An important issue that has long been overlooked, was acknowledged by the panel members and speakers that there may be instances where deficiencies in competency are misreported as bias complaints. This is a positive recognition, as it shows that efforts are being made to differentiate between actual cases of bias and other issues that may be mistakenly categorized as such.
The ASC is accepting public comments on the hearing until March 8th, 2024. It is crucial for as many appraisers as possible to submit their comments and concerns to AppraisalBiasHearing@asc.gov. This is an opportunity for appraisers to have their voices heard and contribute to shaping the future of the industry.
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I’m grateful for Maureen. She seems to be the only who contributed ANY true common sense to the hearing. Based on what I’ve read so far, it was disappointing to read the pandering and garbage from the other speakers. Bias, bias, bias, B.S., ffs., *sigh*, more watered down competence pandering just to let more (poorly trained) ‘appraisers’ enter the field B.S. Sending poorly trained ‘appraisers’ with ZERO real world field experience out into the field will harm our entire profession. YOu think there are competency issues now? Imagine the craziness of THAT? And THE ENTIRE USA is FULL of appraisers who have little to NO work for months now. How does that indicate a shortage? Even appraisers are peddling this crap now? We need to clone Maureen so she can be everywhere on our behalf or find a new profession. Ours heads further to the shitter every passing month, while the powers that be keep their heads in the ‘fake news’ sand.
I do understand that, at times, competency can be a problem when someone has a complaint, but in my experience with the general public, agents, loan officers, and other non-appraisers, many many have no idea what we do or what the process entails.
I’ve had people get upset because I stayed within their neighborhood/subdivision, with plenty of sales, and they preferred I go to higher priced neighborhoods… They said, “Of course there are plenty of sales! It’s cheaper around here!”
Are Bunton, TAF, and the ASC going to be held accountable? This hearing proved the corruption that has taken place between these two entities for over 30 years now.
I read the entire written document that Maureen wrote. Very detailed and covered all the bases. Best thing she said was at the end AMC’s want fast and cheap and this is not good for the public trust or our profession. Her document went to great lengths about the lack of complaints filed against Appraisers from various government, public and other entities and that they should use the process to complain if indeed an Appraiser completed an Appraisal in violation of USPAP or Bias. Problem is how do you prove intent? She also included the fact that Appraiser should feel free to complain against AMC’s and others without retributions. Good luck with that!
My only concern is that EVERY single time a value comes in lower than expected they are going to make it easier and easier to just file a complaint. Talk about a backlog in the state agencies! She brought about some heavy hitting complaints against AMC’s. Her Solidifi example was priceless. Appraiser was paid $375 and the AMC fee was $750 on top of that. The public has no clue unless they are directed to read in the an Appraisal report what was paid to the Appraiser (If it is even required to disclose the fee paid to the Appraiser). Most people have always thought that entire fee is the Appraiser fee!
As for BIAS I hope that the idea that it has nothing to do with bias but more likely do to incompetency (which AMC’s don’t care about) lands hard with those who make the decisions. At least they gave Maureen a chance to be on the panel and I love her idea about making sure Appraisers are part of the Government Agencies who have a hand in deciding the future of our business.
Thanks for the article. Thank you Maureen Sweeney for speaking up for appraisers.
Thank you, Maureen for speaking the truth. Been doing this since 1978 and still going, as my daughter is an appraiser and we look at every house together.
It is still a great profession and I hope all the Maureen’s speak out to continue to make the profession better.
The hearing was very informative . As an appraiser, I was surprised at some of the questions, suggestions and comments regarding the expense of PAREA and the failure of anyone to connect the cause as the predatory actions of the AMC community.
What did not make it into the testimony is the fact that most small to medium size firms absorbed these costs until HVCc and Dodd Frank. The data was there if you read Maureen Sweeney’s opening statement that outlined the consolidation of the AMC companies and included the staggering purchase prices for some of these companies.
I also found it curious that no one pressed Jillian White on her comments regarding red flags, such as historically red lined areas and factoring that into the appraisal process and choosing comparable data that were not subject to red lining. How exactly would that practice present credible results to an appraisal assignment for market value as currently defined by the GSE’s.
Mattingly seemed to grasp the importance of training, while White and Tran failed to grasp the serious problem of entering this profession after taking a test, even with PAREA. I still have fellow Appraisers calling me for help in unique assignments, who does the individual who completed a PAREA course call and when their lack of experience results in a seriously flawed Appraisal report, how does that affect their ability to retain clients.
Fix the cost problem, fix the TAF and perform the outreach to diversify the profession.
I’ve known the AMC’s were crooks the minute they were granted immunity from the appraisal as the appraiser signs it but does not own it. Now I’m seeing bidding on appraisals is a real joke! I asked a AMC what is the bottom dollar and was told as low as $250 for a appraisal I was getting paid $600 on in less then 2 years of COVID-19. I also was told they had bids under $250.00. Yes I’ve been told of closing docs showing $1,000 being charged for appraisal. Why should we bother, who is listening? Who cares ?. 77 yrs old over 38 years appraising. Why should I care I’m supposed to be retired! Just a old man stating what is happening to deaf ears! Can anyone even vent anymore with out consequence? Not a question. Rhetorical! Thank you for those reading. ARC
The problem is not that nobody is listening. Rather that corporate greed is the norm, not the exception. A total and complete failure of regulatory systems to protect consumers, on just about every front. Rise of the non profits.
https://www.zerohedge.com/personal-finance/how-economy-changed-theres-no-bargains-left-anywhere
Will look forward to listening and reading the content of this article.