How much vetting have you done on the appraisal management company? How involved are you as the lender in the day to day activities of the appraisal management company?… The world has changed and most everything in our lives involves technology. The technologies available to each of us are tools. They are not a more reliable means, merely more convenient. Human thought and analysis is still required in every aspect of life. When the Final Rules of the Dodd Frank Legislation went into effect, many lenders chose to use appraisal management companies with the false idea they had no liability for...
Intentional and unintentional racial bias by appraisers on refinance loans is uncommon and not systemic… On January 4, 2021, the American Enterprise Institute (AEI) published a study titled “How Common Is Appraiser Racial Bias? An Analysis Using Big Data to Determine Whether It Is Common or Uncommon that an Appraiser’s Knowledge of an Applicant’s Race Results in Valuation Bias“. They concluded allegation that knowing the race of the applicant results in racial bias by appraisers on refinance loans is uncommon and not systemic. This same analysis supports the conclusion that unintentional bias based on race is also uncommon and not...
Can AMCs mandate the appraisers on their panels take the COVID-19 vaccine?… Over the holidays, we received the following email from Dave Towne: Not sure if this is actually true, but an AMC put out a message on Christmas eve day saying that appraisers should be included in the Phase 1C of the COVID vaccination program. The quoted source was the Evidence Table for COVID-19 Vaccines Allocation Phases 1b and 1c of the Vaccination Program. Essential workers* (non-health care) Persons aged ≥65 years Persons with high-risk medical conditions Allocation within Phase 1 of the COVID-19 vaccination program (post Phase 1a)...
The first case about real estate appraisers to reach the U.S. Supreme Court in almost 60 years may concern the Federal Trade Commission’s price-fixing claims against the Louisiana Real Estate Appraisers Board. Would that be a good thing for appraisers? Well, maybe it’s not the best timing. Filed in 2017, the FTC’s administrative complaint asserts that the Louisiana appraiser board, “a state agency controlled by licensed real estate appraisers, has unreasonably restrained price competition for real estate appraisal services.” The FTC contends that the board carried out this price-fixing through its regulation of fees paid to appraisers by appraisal management...
I recently saw a Facebook post where an appraiser was quite upset and offended that an AMC asked him to dress professionally for an appraisal walkthrough. Now, this was a request that was made up front as one of the conditions for accepting the order. Reading the post, it sounded like this appraiser was upset for two reasons. One, he was offended that the AMC was implying that he does not take his job seriously enough or dress professionally enough. Two, he felt like the AMC did not have a right to tell him how to do his job (i.e....
Not one single point provides any evidence to the appraiser engaging in a racist act… No appraisal reports or actual evidence of racism has been produced by the accuser… Not one single case has been presented to the appraisal state boards… The real estate community is aware of the recent onslaught of articles going around accusing real estate appraisers of racism and appraising homes for less than what the actual homeowner thinks the home is worth. It started with Abena Horton in Jacksonville, FL Additional accusations were made in Chicago, Denver, and Newark, NJ. Each article written accuses the appraiser...
The alleged errors in appraisals that parties are suing appraisers over during the pandemic are the same types of errors that appraisers usually get sued over… Wow. I did not go into the basement on my last visit. I’ll explain why an appraiser wrote that in a moment. Are appraisers being sued for errors relating to the COVID-19 pandemic? My short answer is “no” – there’s no pattern of that happening. One of the services that I provide to my legal clients is tracking lawsuits and legislation that relate to valuation services. I locate and follow cases of all types...
In the news release, Radian, an AMC licensed in most US States says they will help their clients ‘transition’ away from traditional appraisals… This news release was circulated yesterday, October 29, 2020, by the Radian Group Inc. Radian Group (NYSE:RDN) will wind down its traditional appraisal business, which offers residential real estate appraisal services through a panel of independent contractor appraisers, to focus on core mortgage and real estate businesses driven by digital products and services. This news is so fresh that their very attractively designed web site and associated pages still glowingly highlight how wonderful their ‘traditional appraisals’ are… at least...
FTC’s price-fixing enforcement action against LREAB… A federal appellate court – the U.S. Court of Appeals for the 5th Circuit – has issued a decision in the long-standing fight between the Louisiana Real Estate Appraisers Board (LREAB) and the U.S. Federal Trade Commission about “customary and reasonable” appraisal fees. I’m venturing here to provide a short, understandable, unbiased summary of the litigation and what this latest court decision means. What did the Court of Appeals decide? Here’s the very short summary: The Federal Trade Commission (FTC) is pursuing an administrative complaint it filed in 2017 against LREAB, contending that LREAB’s “customary and reasonable”...
Remember the saying “Pick two: fast, cheap or good. You can only have two of them?” Well you see, amcs got impatient and stopped reading after fast and cheap… The concept is simple enough, a fire wall between the loan production staff and the appraiser to avoid any possible pressure, coercion or influence. It sounded like a good idea to many; hence the HVCC legislation passed and was enacted. This was a period of trial and error for so many and before anyone found their way, along came Mr. Dodd and Mr. Frank to give their official stamp of approval...
