Isn’t that the truth…..

The income holding property crowd should think carefully about a back up plan or ample cushion. Because if the system unravels much further, those GRM’s and market caps are going to take a hit.

Yea, I know . They probably did not read the email and most likely set it on auto reply. These people would not know real journalism if it slapped them in the face.

Yes, you are so right. I did not touch of the other appraisals. If we are doing our jobs properly the spread at most in my opinion would be 3%-5% at most. The spreads are just too wide. So, he kept getting an appraisal until they hit the number. I wonder what he told the other two appraisers. This really stinks.

I thank GOD I can pick what business I want. My advice to any appraiser is if you feel uneasy or conflicted about an engagement walk away and do not look back. I have never regretted turning down any offer that I feel is not to my best interest. All business is not good business. I have used this model in all of my businesses for 46 years.

I am giving this profession another year or less and I am done. In this litigious society life is just too short for this foolishness.

Thanks Russell. I sent a letter also but got no response. I think they heard us.

I know many of you do not think all black people use the race card. However; if I were casusain I would be very leery of appraising a minority owned property. It is enough to deal with all of the other crap we deal with but now to be faced with racism crap is a bit much.

Thaddus Dawson on the show with 10K Black Appraisers and 10K Black Appraisers Foundation website says “We empower minority appraisers to promote a more equitable real estate appraisal industry.” He also owns a GA AMC.

No one stopped black people from becoming an appraiser. Black people chose not to pursue this field just like so many other professions. So, who fault is that?

I sent three emails to the station and received one reply. I used the questions you suggested in the first email.

My First Email To Station:

WWBT, NBC 12
Station Manager, Kym Grinnage

Dear Mr. Grinnage,

I am a black appraiser and have been appraising in GA and AL for over two decades. I have several concerns about what is going to be aired tomorrow. Firstly, there is racism in ALL industries and professions.

However, for anyone to say that racism is a rampant problem in my profession is an outright lie. Personally, I feel it is an outright attack on my profession.

I believe and many of my peers believe that when any appraiser who allows racism and biases to cloud their judgement or produce an appraisal that is false and misleading should not be in this business.

They should be prosecuted to the fullest extent of the law. As appraisers, we are not advocates for anyone. Our job is to be impartial and to give our opinion of value based on facts.

I put to you the questions and comments below:

What research was done on the appraisal process that will air with the story?

Was any appraiser, Appraisal Professional Organizations, or the Virginia Real Estate Appraisal Board contacted for information?

Will the Uniform Standards of Professional Appraisal Practice be discussed in the report?

Are you aware of how many racial bias claims against an appraiser have been filed with the Department of Professional Occupation Regulation, Virginia Real Estate Appraiser Board?

How many racial bias claims have been filed with the Federal Agencies?

How many have been proven to be false claims?

Are you aware an appraiser has filed legal action against a homeowner in Maryland for defamation after a homeowner filed a claim of racial discrimination?

Not reporting complete and accurate information would be nothing more than irresponsible journalism!

I am sure that you stand for truth and professional journalism.

Best Regards,

Reply From The Station

Russell,

Thank you for taking the time to write in with your questions about the story we are airing tonight. Our commitment to viewers is to air fair reporting rooted in facts.

To address some of your concerns ahead of the story airing, we have spoken with the reporting team on this story and are happy to outline some of the work.

First, this story comes from our national investigative team and is not specifically about the Richmond or Virginia areas. The story’s scope is nationwide and particularly involves analysis of historically-redlined areas. The national team began looking into this partially because of the government’s creation of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) and the statements by the CFPB, HUD and other agencies.

Second, the reporter on the story spoke with many sources, including in the appraisal profession and from the Consumer Financial Protection Bureau. For some highlights, the story includes various perspectives including from an Ohio homeowner with a pending case and his attorney, as well as an expert/writer from the American Enterprise Institute, who published this report you may be familiar with.

Again, thanks for reaching out

Frank Jones

News Director

Frank.Jones@12onyourside.com

Office: 804-230-2509

My Second Email To Station

Mr. Jones,

Thank you for your response. I appreciate it very much.

I am very aware of historically redlined areas, however, as an appraiser determining an opinion of value has no factor in this. Our opinion of values are based on many market factors when we use the three methods of determining values.

There are three internationally accepted methods of measuring the value of property: the sales comparison approach, the cost approach, and the income approach. Depending on the nature of the property being valued, one or more of the approaches may be used by an appraiser. USPAP rules and guidelines covers racism and biases which are prohibited. However, this does not mean all appraisers follow USPAP, and they are weeded out of the profession because their reports will reflect this.

The vast majority of us do professional and ethical work. As, appraisers, we take on a lot of risk in this industry and the consequences can be devastating to us at any time when we have made mistakes in our reports, depending on the severity of these mistakes.

Yet, there are no perfect reports because we as humans make mistakes.

As a black appraiser who have appraised in GA and AL for over two decades, I have experienced racism from homeowners, Realtors and some of my peers. I have never let this distract me or cloud my judgement in doing my job.

The vast majority of consumers do not know what it takes to prepare for an appraisal to arrive at an opinion of value. My reports are typically 40 pages or more, and the vast majority of consumers never completely read them.

Basically, their concerns are if their property appraised enough for the transaction they are trying to complete. When their property appraise for enough, they are happy and go on with their lives.

When it does not appraise to their expectations because the market says it does not, they are very unhappy. This is also true when a Realtor is involved in a transaction where an appraisal is required.

Yes, we are on a battlefield every day, and we continue to brave these hurdles because we love what we do.

Regarding the government’s creation of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) and the statements by the CFPB, HUD and other agencies. If feel, it will open the doors to more racial claims and will put more undue burdens on our profession. USPAP already covers these issues when it comes to racism and biases. Take the time to download USPAP and you will see what I am talking about.

Personally, I feel Caucasian appraisers that are appraising a minority owned property should be shaking in their boots because when a property does not hit the expected value they are potentially going to face a complaint of racism.

The other flip side of this is when we appraise certain genders properties and the expected values are not met, they will follow suit for their interests.

As a previous mortgage broker and lender branch manager and currently an appraiser, auctioneer, paralegal in real estate and civil ligation and real estate investor I have seen and know a lot about this subject.

I would not hesitate to be interviewed to give my professional opinions of 44 years on this whole matter as a follow-up after the airing of the report.

Best Regards,

Russell

My Third Email To Station:

Hi,

After looking at the report four times, I wanted to make sure I got it right. In my opinion, your reporter must not have had an informative conservation of what really entails what we do. If they did have this conservation, then they were intent on misleading the public. My opinion, the report that aired was disingenuous.

The reporter glazed over the appraiser and Tobias Peter response. I paused the appraiser letter to read it. Firstly, a bank giving an estimate of value based on what facts? If the bank knows the value, why get an appraisal? The appraiser addressed several misconceptions in his letter. He physically measured the property, which most often differs from tax assessor records and the owner. There are standard appraisal practice that determines Gross Living Area (GLA) or Gross Building Area (GBA). How we measure is based on the type of subject we are appraising. I have been using the American National Standards Institute ( ANSI) standards for over two decades when it comes to appraising properties. I must admit, there were other appraisers that used other standards. Appraisers are now required by Fannie Mae to use the Square Footage-Method for Calculating: ANSI® Z765-2021.

He also discussed the bedroom discrepancies and standards. A bedroom must have ingress and egress besides a door such as a window. If not, typically the room is not counted as a bedroom. Typically, a bedroom has a closet however, depending on the age period of a home a bedroom may not have a closet. Also, we take in consideration of what market’s dictates and any applicable laws pertaining to the varying situations.

The subject is a multifamily rental property, not a single family property. The two sales referenced being overlooked are single family homes. To use these single family homes as comparables would be grossly misleading, which is prohibited by USPAP.

He also explained about subject market area. Most likely he did all three approaches to value, the cost approach, the sales comparison approach and the income approach. The income approach would most likely be the more valid approach to determine value, or a combination with the sales comparison approach.

Tobias Peter was exactly right that there is no systemic racism in the appraisal industry. Yes, there are some bad appraisers as in any profession, but this is not the norm. As to redlining we know some of it still exists, as to what extent no one really knows.

Redlining absolutely plays no role in our profession.

Sharon McGowan also, was disingenuous. What does she mean “by blacker part of town” where he picked sales? I am black, and I do not know what she is talking about. We choose comparable sales that are the closest similar properties as the subject in the same neighborhood when possible, then make necessary adjustments. If we cannot find any similar sales in the neighborhood, then we move out to similar and/or competing neighborhoods and make any adjustments if necessary. Also, there may be many different adjustments however, standards prefer fewer adjustments as possible. Just one of the main reasons to select the right comps.

There are a lot of factors we must consider when choosing comps. People like the attorney, the owner, and your reporter do not have a clue what we must do to arrive at an opinion of value. People also do not have a clue that we must adhere to USPAP Advisory Rules, Opinions and Guidelines or face fines, jail, sanctions, loss of license, lawsuits or all of these. Anyone that put their reputation and livelihood on the line because of stupidity deserves what is coming to them. So, again, I emphatically tell you that the vast majority of my peers are not racist. My profession is not riddled with so many white racists appraisers that the government needed to create a biased commission that will make matters worse.

All that owners, sellers, lenders, and Realtors care about is hitting the values they want or expect. So, if the value does not hit the mark and the subject is owned by a minority and the appraiser is white, they get accused of being a racist.

What is very hilarious to me is that I have never heard of any minority accusing a white tax assessor of being a racist for appraising their property too low.

If I were a Caucasian appraiser and was asked to apprise a minority (black) owned property, I would run away. I might even scream like my life depended upon it while doing it.

Have we come down to that a white appraiser can only appraise white owned properties and a minority appraiser can only appraise minority owned properties?

Regards,

Russell

I know they read my other two emails because I received a notice READ. If they answer I will post them. However, I do not think they will.

Mail- PO Box 2564 Newport Beach, Calif. 92659
Email-kjmull@aol.com

Date: 02/25/2024
Ref: Possible case legal representation?
To: Appraiser/ can you help me find a law firm!

Let me state the case, it involves Intentional Infliction of Emotion Distress by a homeowner who did not get a refinance (I am an appraiser) and how HUD is harassing me. His and HUD’s complaints are based on: deception, malicious persecution, lying, fraud, and deceit, which I can prove through the evidence (written documentation).

I had a claim filed against me with the VA for racism. I won that complaint, now the homeowner filed the same type of claim against me for racism with HUD. The HUD investigator lied and mislead me during her investigation, which I physical proof of. I have the VA backing me saying no racism existed yet HUD now for over a year have perused me and interrogated me, and threatened me with subpoena etc. unless I cooperate with them. I have all of the paperwork on this.

I appraised a home for a homeowner in a predominately black area of LA, the homeowner was a veteran, and is a “racist” against white people. He did not like the value I came in at with my appraisal and he did not get his refinance, so in retribution of that fact he filed a complaint against me that I was “White Racist Appraiser” with the Veteran’s Administration. The complaint was built on a house of cards, which I can prove. The homeowner called me every name in the book in his complaint. The VA did a year’s long investigation and found no racism or evidence of discrimination, thus a “Close Out” letter was generated.

The homeowner had two refinance appraisals done after my appraisal was performed that show his claims against me are false, riddled with dishonesty. Lender’s keep records when homeowners ask for and then get a copy of any appraisal. He filed his claim against me with the VA 9 months after my report was performed so he had two other appraisals done after mine that would show the truth of the value of his home.

After the VA cleared me he then went to a second government agency, HUD and filed a second complaint for the same thing “Racism” against me and the lender Omni-Fund. He was just informed that no racism existed by the VA, so this is now a “Personal Vendetta” against me.

Now HUD after another year of investigation of me demanded of the homeowner those two past appraisals after mine was done, he did not provide those two appraisals to HUD so he is hiding evidence that will show that he purposefully lied in order to slander me to two “Two Government Agencies” and try to ruin my career, business and health. The second complaint file with HUD shows this is an Intentional Infliction of Emotional Distress, personal injury etc…His actions will follow me for the rest of my career and will black-mail from every lender list because I was once under investigation by two government agencies as a “White Racist”.

This has now been over 3 years that this has been going on. I have been appraising for 35 years so I know a few things about this situation. Because of these facts I went into therapy have had to undergo therapy and a medical doctor’s care because of two government agencies after me. I just started therapy so the statue of limitations just started.

Question: I asked the HUD investigator by email if I can contact the homeowner who file the racist complaint against me, and that I was thinking of filing a lawsuit against him in the future. I wrote my facts of the case and what I could possibly file for and a possible outcome and asked him to go into arbitration with him.

Now the HUD investigator has file additional charges against me that I am harassing the homeowner after she said it was OK that I contact him (I have the emails). I need a law firm to take this case on and help me!

Respectfully,
Kenneth J. Mullinix

Calif. Real Estate Appraisal License #AR027585
(Cert Residential Appraiser – OREA)
Calif. General Building Contractor License “B-HIC” #752435 (CSLB) (expired)
Calif. Certified Home Inspector CSLB- (Contractor State License Board)
Calif. Real Estate Broker’s License #01278660 (Dept. of Real Estate) (DRE) (expired)
Calif. Association of Realtors@ Member (CAR) (expired)
Pacific West Board of Realtors Member (PWR)
KMA Real Estate Services

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Historically low interest rates were out there for three or more years. People whom wanted to take advantage of that had adequate time. We’ve all dealt with unusual difficult to qualify situations, and have seen borrowers move mountains to qualify and finally refinance the debt. Claiming racism does not cut it. You know what the secret to mortgage lending is; The originator will string borrowers along forever, and will refuse to offer simple advice that the originator across the street offers a program that will work better for them with easier qualification situations based on their qualification needs. Every one of these stories is incomplete, because the supposed researchers mentioned absolutely nothing about the comparative mortgage programs available from the lender the people tried to go with vs the competition. Smart shoppers bounce to another lender and make the problem go away within a week. Does not compute.

I disagree with you on your first paragraph and your last paragraph about the homeowner. They are conjectures because we do not know if this is true. If it is true that may affect the subject condition however; we do not know what reserves he has to maintain his property.

He dd not say he was getting a loan “to keep his rental properties up to speed for maximal rental value and adequate maintenance expenditure”. He stated he wanted to take advantage of the lower interest rates at that time.

The rest of your comments are spot on.

A big amen to that!!!

Bravo, but you know, you just make too much sense for any of these under-educated reporters and attorneys to figure out. Their eyes would be crossing just reading your post as they have no clue about how such properties are appraised! I would love to see an Appraiser make these reporters look like idiots on air….and now I just realized why they NEVER have an Appraiser on the air and certainly never do they have the Appraiser being skewered on the air to refute all their ridiculous allegations.

Funny, I was thinking that same thing when that Attorney said they did not even use sales on the same street, yet the Marin County case revolved around the fact that she DID use sales in the same neighborhood and she was in essence perpetuating bias from years ago that caused this area to be lower in value than nearby white neighborhoods. You have to be blind to not see the irony….but we all know all those who want to keep this bias narrative going are blind as bats!

I did write to that news director again….about how 1 sided this story was an how it was filled with falacies and unfounded truths that they want to claim. I told him I would just ONCE love to see the Appraiser being defamed on the news to support his or her conclusions but of course the reporters don’t want that, does not make for a good salacious story.

I told him I was tired of the media being our judge, jury and executioners on this issue. We are supposed to be innocent until proven guilty.

That is why I hope that counter suit against that homeowner that Shane is bringing is successful!

The key consideration here is not the end point appraised value. What is likely more influential is the accumulated depreciation and unresolved maintenance needs which drove increased cost estimates which resulted in lower effective income estimates. Which in turn, via lenders own guidelines on income valuation analysis sound methods, decreased his end point market value opinion of a rental property.

The attorney featured may not have a proper understanding of these principals if she believes there can be straight forward market value comparisons for a single family home vs a multi family rental, looking only at end point sales pricing. Dissimilar use properties do not have equivalent market value relationships simply because they are in close proximity or may be similar in size.

This is the point of appraisers being required to match only similar use properties. Single family properties have proportionally less needs for operational reserves. A duplex has twice the reserve needs costs, a triplex three times, etc, etc. Subsequently rentals with more units accumulate depreciated maintenance at a swifter rate. More units; more reserves are needed, more wear and tear routinely happens. This is why rentals are totally different types of properties from a lending perspective, from an investment perspective, and from an ownership perspective, compared to single family homes. Long term rental holdings always come with eventual increases and decreases in both worth and income capacity.

FYI; The ‘American Dream’ of home ownership is for single family ownership, and there is nothing in any historical document or government document anywhere which points to holding more than one property to keep as a rental, as being part of the ‘American Dream’. Such an idea is contradictory to the idea that each and every American citizen should be able to enjoy enough economic prosperity, that if they choose to be out from under the yolk and burden of rental requirements, they could be able to buy and own a single family property for themselves.

Nobody is denying this guy anything, he’s choosing to make sacrifices in order to have rental income, instead of the alternative which would be splitting up the units to sell individually, or downgrading to something more within his economic means like a townhome or a condo.

Inadequately managed rental properties is one of the reasons HUD’s Fair Housing division was formed, to stop landlords from taking advantage of tenants whom could not afford to pursue the ‘American Dream’ of home ownership themselves. It is why lenders require the below operational reserves form, which deducts operational costs from effective income, to assure lenders are not complicit in accelerating holding capacity of landlords whom place profits ahead of the well being of tenants.

The landlord owner person likely pocketed the reserves he should have been with holding for future maintenance needs, presuming he’d one day borrow all that back instead to keep the show going. Then some hapless appraiser shows up for a $700 refinance order and suddenly decades of property and budgetary mismanagement are all the appraisers fault? Who’s actually buying this? That was yet another uniquely entertaining fake news piece. Bravo.

https://www.piekos.com/xsites/Appraisers/piekos/content/uploadedFiles/216.pdf
Someone send these people a copy of the selling guide. Becha a pepsi that attorney lady never read it.
https://singlefamily.fanniemae.com/media/38001/display

I digress to the National Association of Realtors mantra since the beginning of memory has been “location, location, location”. Your honor, I rest my case. However, if the appraiser does need to expand the research area and needs to use sales from outside the subject defined market area a thorough and complete analysis must be performed to determine if those areas offer the same, inferior or superior appeal and if the latter a market derived adjustment must be applied if warranted. This is another concept the arguing parties just don’t get. If an appraiser uses a sale from a neighborhood that is determined to have a higher predominant value, a market derived negative adjustment may be warranted resulting in the same or similar value results derived by sales within the subject defined area. Their uneducated reasoning is no adjustment is warranted and it remains the status quo. I am hoping someone that does not understand the appraisal process reads this and gets this one facet of what an appraiser needs to consider. Keep in mind, if all appraisers are accused of biases then Realtors and Assessors should also be included in that group given they too utilize location, list and anticipated (as applicable) sale price using the same criteria.

Yea, calling out will not happen given it had a predetermined outcome for the sake of sensationalism and ratings. This is nothing more than an opinion piece and not credible investigative reporting. The department it is published through, something to the effect we are on your side, pretty much sums up the lack of objectivity. Probably a first year journalist (and that is used loosely).