Tagged: Freddie Mac

The One-Mile Rule: Prudent Policy or Modern Day Redlining? 6

The One-Mile Rule: Prudent Policy or Modern Day Redlining?

…whether through redlined maps or implicit “one-mile rule,” the result can be undervalued properties in historically marginalized neighborhoods.  Throughout the history of mortgage banking and lending in the United States, underwriting policies have significantly influenced the appraisal process for home purchases and refinances. Appraisers must follow underwriter appraisal review guidelines meticulously to ensure their appraisal reports are accepted by the lender. Unfortunately, in the past, these policies became the basis for redlining, wherein certain communities were systematically denied access to mortgage credit. In this article, we delve into the historical context of underwriting policies and their influence on the appraisal...

Federal Officials Team up with Freddie, Fannie to Deceive Investors | The Censorship of Appraisers 30

The Censorship of Appraisers

Thirty-seven hours after President Biden took the oath of office, White House officials met with executives at social media companies. The officials threatened restraint-of-trade lawsuits and regulatory action if the companies failed to censor what the White House deemed “misinformation.” In a parallel development, we can now connect the dots that similar talks occurred among White House officials, employees of government-sponsored mortgage giants Fannie Mae and Freddie Mac and private vendors to throttle the protected speech of individuals and firms in the mortgage industry engaged specifically for their independence. The latter serve as bulwarks in federally backed mortgage transactions. In...

Is the GSEs "Appraisal Modernization" Really Just Mass Appraisal? 18

Is the GSE’s “Appraisal Modernization” Really Just Mass Appraisal?

Mass Appraisal tend to exhibit a regressive nature…  In the intricate landscape of real estate mortgage financing, the notion of appraisal waivers recently dubbed “Value Acceptance”, by the Government Sponsored Enterprises (GSEs), has stirred considerable debate. The most recent statistics show Value Acceptance accounts for up to 40% of all mortgage approvals. It is presented as part of the GSEs “Appraisal Modernization” initiative, which aims to streamline the mortgage appraisal process. However, a closer examination reveals potential drawbacks, raising questions about its efficacy and impact on the housing market. Despite its roots in a methodology designed to support appraisers, Value...

Let's All Build the Gallows Together 61

Let’s All Build the Gallows Together

Fannie Mae and Freddie Mac have issued a clarion call to all appraisers to pitch in and help build the gallows from which they will hang us all in 2025. The mission is to “modernize” the appraisal profession into a skeleton crew of compliant zombies who will be rubber stamping appraisal reports for $25 each (Source: Voice of Appraisal) from the dark confines of their private offices. “Grab some nails, get your hammer, pick up that saw and let’s build a new gallows… I mean model, that gives lenders everything they want and need to inflate the housing market into...

The New Appraisal Profession – Why bother! 26

The New Appraisal Profession – Why bother!

As long as the new normal is reporting the appraiser when you don’t like the value continues, why bother?  In today’s new and unimproved appraisal atmosphere, any appraiser that does not “hit the number” is open to detrimental consequences. Buyers, Sellers, & Refinancers – The U.S. Government from the top down have provided the media and the public in general with so much toxic misinformation and encouragement that any appraiser doing their job, a job that can lead to lower values than expected, can now be turned to HUD itself, or a state appraisal board for racial bias. So, why...

Appraisal Bias Mantra is Largely False Reporting 16

Appraisal Bias Mantra is Largely False Reporting

Just How Commonplace Is Appraisal Bias?  Folks, about the only entity examining in depth the details behind all the allegations about appraisers being inherently biased is the American Enterprise Institute (AEI) Housing Center. They are proving that most of the allegations are mostly a dump truck load of bovine substance. Click here for their latest expose. Report: Just How Commonplace Is Appraisal Bias? – theMReport.com Within this report are these statements from AEI: “When comparing appraisals for people of color to those for non-Hispanic white people within the same geographies, a new study by the American Enterprise Institute’s (AEI) Housing...

Fannie's Loan Buyback Sophistry Relies on Modifying Analysts' Behavior 9

Fannie’s Loan Buyback Sophistry Relies on Modifying Analysts’ Behavior

“Many of the repurchase letters make no sense,” said the insider. If analysts don’t write enough defects on those files, they get hammered. If analysts fall short of their peers in “production points,” it’s considered their fault, said the insider.  At the heart of Fannie Mae’s valuation system is a tool that shunts a subset of the millions of loans purchased by the mortgage giant each year into a “high risk” pool. Fannie then pressures and incentivizes a corps of in-house analysts to create further doubt about the loans in order to send repurchase demands to lenders for up to...

The Unbiased Reality of Census Tract Data Dump... Open Letter to FHFA 11

The Unbiased Reality of Census Tract Data Dump… Open Letter to FHFA

Folks, the following letter was sent to FHFA by an appraiser I know. It was sent in response to the ‘first’ data dump FHFA made which uses CENSUS TRACT data to try to convince others that appraisers are biased by using ‘people demographics’ contained in Census Bureau info. You can find that ‘dump’ here. The writer of that first FHFA dump was identified by name, and included an email address. So the appraiser wrote a respectful email to Mr. Russell. It turns out, shortly after this FHFA document was released, Mr. Russell left FHFA. So this nice letter sent several...

List of Banned Words... The Nightmarish End of Home Appraisals 29

The Nightmarish End of Home Appraisals

In his 1946 essay “Politics and the English Language,” the late British novelist, essayist and critic George Orwell examined the connection between political orthodoxies and the debasement of the English language. In a truly Orwellian move, mortgage giant Freddie Mac recently announced its intent to censor an arbitrary collection of words such as “desirable,” “safe,” “well-kept,” “student” and “crime” when they appear, in any context, in the hundreds of thousands of appraisal reports it relies on in mortgage underwriting. It would be hard to make this up. One of the banned words – “desirable” – will be recognized by students...

Those Pesky Words... Words Considered Biased 24

‘Pesky’ Words. Keeping Appraisers out of Language Purgatory

Appraisers, on July 17, 2023, a document from Freddie Mac was circulated to numerous appraisers around the US which identified certain words and other info that can be considered to be ‘BIASED’ in appraisal reports. Here is the Link to the Bulletin. We need to step back for a moment and carefully analyze and consider why that was done, and what it means to appraisers. In many ways, appraisers forget the purpose of the appraisal assignment – which is to value real estate. In other words, the physical structures tied to the land. But too often, elements of personal or...

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