Tagged: valuation

The Shadowy AMC Fees Draining Billions from Homebuyers 121

The Shadowy AMC Fees Draining Billions from Homebuyers

The hidden costs of appraisal management companies (AMCs) in the real estate industry have faced growing scrutiny, as highlighted by a recent Business Insider article titled “The Hidden Middleman who cost homebuyers $12 billion dollars and counting.” The article examines the opaque practices of AMCs, which frequently charge exorbitant fees that can exceed the amount paid to the appraiser. As highlighted by former Appraisal Institute CEO Cindy Chance, this issue has faced significant resistance from entrenched interests, mirroring the challenges faced in other industries such as the pharmacy benefit manager (PBM) sector, which ultimately led to an FTC investigation. The...

AI / AMC / Appraisal / Appraisal Institute / Appraisal Management Companies / Appraisal Organizations

Appraisal Industry Outlook Under Trump Administration 57

Appraisal Industry Outlook Under Trump Administration

In a recent article, John D. Russell, JD explored the potential impact of the new Trump administration on the appraisal industry. With Republicans set to control the legislative process, Russell analyzed various documents and comments to distill expectations for how appraisal-related issues may be handled going forward. He noted that the Trump administration’s efforts will likely reflect much of the Project 2025 platform, and that its approach to the GSEs and FHFA in the first term could mirror that of the previous administration. Late first-term efforts on housing finance reform may also provide insight into second term priorities. Regarding the...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / CFPB

Is a Horde of Deadbeat Borrowers Again Walking Among Us? 8

Is a Horde of Deadbeat Borrowers Again Walking Among Us?

There are signs of a new horde of deadbeat borrowers, but the foreclosure filings are being delayed and masked by the government itself. Some of the current deadbeat borrowers will learn to expertly work the system…  In 2022, a San Ramon, California, couple who hadn’t made a mortgage payment since 2009 was finally evicted. Anita and Mahesh Khurana had put on a masterclass in the use of the courts to keep foreclosure at bay. The holdouts had lived in their home payment-free for 13 years. A state court finally ruled they had exhausted all appeals, and they were ejected. In...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Fannie Mae - Freddie Mac

Appraisal Waivers Expansion - FHFA Risky Move 30

FHFA’s Appraisal Waivers Expansion

The Federal Housing Finance Agency’s (FHFA) recent push to expand the use of appraisal waivers represents a concerning and potentially disastrous gambit that threatens to undermine the integrity of the housing market and the broader economy as a whole.  The recent announcement from the FHFA Deputy Director Naa Awaa Tagoe regarding the expansion of appraisal waiver eligibility for purchase loans is a significant development that has sparked debate and controversy within the mortgage industry. By increasing the maximum allowable loan-to-value (LTV) ratio for full appraisal waivers from 80% to 90%, and for inspection-based appraisal waivers from 80% to 97%, the...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Federal Housing Finance Agency

The Great Debate on Appraisal Fees 31

The Great Debate on Appraisal Fees

She included several different fee split examples indicating AMCs retained as much as 70 percent of the total appraisal fee paid by the borrower, which prompted her to stop working with AMCs because of the lack of transparency.  The appraisal industry is abuzz with a discussion about appraisal fees. The Consumer Financial Protection Bureau (CFPB) recently issued a Request for Information Regarding Fees Imposed in Residential Mortgage Transactions [Docket No. CFPB-2024-0021] in which it solicited feedback from the public and industry stakeholders on the fees charged to consumers by mortgage providers and related settlement services. The CFPB framed it as...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Organizations / Appraisers News

NFHA's False Narrative Undermines the Appraisal Industry 16

NFHA’s False Narrative Undermines the Appraisal Industry

A barrage of billboards, magazine ads, and TV/radio public service announcements is being used to amplify and spread this false narrative.  The latest attack on the appraisal industry is being spearheaded by the National Fair Housing Alliance (NFHA) and the Department of Housing and Urban Development (HUD), who are aggressively pushing a false narrative of widespread appraisal bias against Black and Latino homeowners. Through a relentless media campaign employing emotive messaging, vivid anecdotes, and dubious statistics, these entities are painting a picture of widespread, systemic bias among appraisers against Black and Latino homeowners. However, the reality is that not a...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / HUD

How Synthetic Appraisals Fuel a Fraud-Filled Housing Bubble 24

How Deep Fakes Have Burrowed Into Home Finance

Fannie and Freddie have been toiling at the coalface of “synthetic appraisals” – “black box valuations.”  In the 1960s, technocrats at the Pentagon used the latest IBM mainframe computers to analyze complex data related to the Vietnam War. Planners fed punch cards into the machines and ran endless simulations, hoping to determine strategies for winning the war. In 1967, analysts finally asked the computer, “When will we win in Vietnam?” The machine’s answer: “You won in 1965.” It exposed the hubris and naiveté of those who believed computer-generated models could capture and quantify millions of complex human interactions on the...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Fannie Mae - Freddie Mac

NHFA-HUD misleading billboard ads 26

Misleading Ads Sow Mistrust

These misleading ads are sowing seeds of mistrust in a time-tested profession. The National Fair Housing Alliance (NFHA) has recently launched a concerning campaign of poster ads, billboard ads, and magazine ads that falsely accuse home appraisers of basing their valuations on the personal characteristics of the homeowners or prospective buyers, rather than solely on the objective merits and features of the property itself. This is a deeply misleading and unjust narrative that undermines the integrity of the appraisal profession, which is founded on the core principle of providing an independent, impartial assessment of a home’s value. Appraisers are highly...

Appraisal / Appraisal News / Appraisers News / HUD / The US Department of Housing and Urban Development / Trending

County Assessors' Standards - AVM Final Rule Guidance 16

County Assessors’ Standards | AVM Final Rule Guidance

County Assessors have the advantage of being able to calibrate their models specifically for one market, allowing for a more tailored and precise approach.  The OCC, FDIC, NCUA, CFPB, and FHFA (collectively, the Agencies) are adopting a final rule to implement AVM quality control standards mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The quality control standards apply to mortgage originators and secondary market investors in determining the value of a dwelling that is the collateral for mortgage financing. Under the final rule, institutions involved in specific credit decisions or securitization activities are required to...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / CFPB

The Censorship Campaign - Housing Inflation Exposed 29

Objectionable Valuations Become Hate Speech, Inflating Home Prices

The censorship, scapegoating and sidelining of appraisers has done real damage to borrowers and the purchasers of bonds…  Attacks on free speech are on the rise in the English-speaking world. A bill introduced in Canada to thwart online “anarchy and lawlessness” would create a Canadian Ministry of Truth empowered to punish authors Ottawa politicians find problematic. In response to the worst rioting in Britain in years, about 4,000 people have reportedly been jailed for online thought crimes. U.K. Prime Minister Keir Starmer has vowed to prosecute anyone his government believes is whipping up people’s emotions on the Internet. There’s even...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Federal Housing Finance Agency / FHFA

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