Tagged: valuation

Appraisers Destroying Goliath's Messaging 35

Appraisers Destroying Goliath’s Messaging

Goliath’s strength is in his messaging. It is appraisers who are destroying the message.  The seeming destruction of the appraisal profession by the federal government, GSEs and lending stakeholders is a collective action problem. Appraisers are responding to new GSE and lending dictates with reactions based on our own personal well-being. Not enough people speak up or stand up to change the trajectory of the narrative. Or so it seems. Appraisal waivers, hybrid appraisals, automated valuation models, all based on the last 13 years of data collection by an entity I will call Goliath has created a paradoxical inversion of...

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

New Jersey Draconian Penalties on Appraisers 40

New Jersey Draconian Penalties on Appraisers

“Well, I guess no one will be doing appraisals in New Jersey… or maybe the standard fee is going to be $10,000?” said one appraiser. The bill proposed by New Jersey Senate lawmakers to create steep penalties for real estate appraisers who undervalue homes because of the owner or buyer’s protected characteristics has been met with both praise and criticism. Supporters of the bill are lauding its potential to combat discrimination in housing transactions, while critics worry that it could lead to unintended consequences due to its disregard for appraisers’ motives. Violators would pay $10,000 on a first offense, $25,000...

Appraisal / Appraisal News / Appraisers News / Trending

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...

Appraisal / Appraisal News / Appraisers News

Racial Bias Complaint Filed Against Me 47

Seller Filed a Racial Bias Complaint Against Me

So what’s caused the sudden loss of income? Could it be because of the racial bias complaint filed against me by an unhappy Seller…  Fannie Mae accomplished what they set out to do in July 2011, when they initiated their Uniform Appraisal Dataset (UAD) and the Uniform Collateral Data Portal. The goal was to collect enough property data to effectively remove appraisers from the home buying and refinancing process. It all started with Dodd-Frank Act, a several hundred pages Act signed into law by then President Obama, sold to unsuspecting Americans as a protection from the corrupt business practices of...

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

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...

Appraisal / Appraisal News / Appraisers News / Collateral Underwriter / CU / Fannie Mae - Freddie Mac

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FNMA Continued Effort to Get Rid of Appraisers

Fannie Mae Continues Their Effort To Get Rid Of Appraisers: Sends “Tips” For the past year, Fannie Mae has sent unsigned complaints to state appraisal boards; when they see something they don’t like, they write it up and send it to the state. In their recent newsletter, this effort is called “Tips.” They emphasize they are not automated: LQC reviews are not automated. Our expert analysts validate the appraisal results by asking questions like “Do the comparable sale selections make sense?”, “Is the data accurate?”, “Did the appraiser make appropriate adjustments?” and “Are we getting the most probable value?” in...

Snippets / Trending

Appraisers Pressured to Inflate Values Based on Race 13

Appraisers Pressured to Inflate Values Based on Race

The real estate appraisal industry has long been subject to pressure from various sources, such as lenders, borrowers, and agents. In the past, this pressure often came in the form of withholding business if appraisers refused to inflate values, or ignore property deficiencies. Nowadays, it appears that government efforts, aimed at curbing discrimination, are actually leading to increased pressure on appraisers to inflate values. This is a troubling development for honest appraisers who may be feeling more pressured than ever before by those looking for higher numbers than what an accurate appraisal would yield. Unfortunately, some have taken this opportunity...

Appraisal / Appraisal News / Appraisers News

Finding of Bias in Home Valuations Fails by Own Measure 39

Finding of Bias in Home Valuations Fails by Own Measure

To the surprise of no one, their redacted study found that what Perry et al. had characterized as race-based differences in home valuations were almost entirely due to socio-economic status, not racial bias by real estate appraisers. In an updated refutation of the findings of Brookings Institution researcher Andre Perry, Edward Pinto and Tobias Peter of the AEI Housing Center demonstrated just how broken the Brookings research was. Perry’s 2018 research, titled “The Devaluation of Assets in Black Neighborhoods,” pinned the nation’s racial wealth gap on 80,000 state-licensed real property appraisers. Unfortunately, these now-discredited findings have been levered by housing-industry...

Appraisal / Appraisal News / Appraisers News / Trending

Appraisal Bias - A Counterpoint 14

Appraisal Bias – A Counterpoint

It is a fact that 85% of appraisers are white with the majority of them being middle-age white men, although that is rapidly changing. The bias argument presupposes they are inherently more biased than women, Hispanic, African American, Asian, Pacific-islander, etc. We simply don’t have enough data to verify whether this is true or not. Therefore, as the argument goes, white appraisers must be biased. Just as there are more black NFL players in professional football it follows that the majority of touchdowns will be scored and fumbles made by a black player. We can, and should, encourage more diversity...

Appraisal / Appraisal News / Appraisers News

Beware of Bifurcated Appraisals 11

Beware of Bifurcated Appraisals

The entire concept of bifurcated appraisals represents a fundamental misunderstanding of the appraisal process. To have an individual inspect a property and then convey that information to an appraiser to complete the valuation is tragically flawed because: Inspections and qualifications of an inspector are not standardized, not insured, not licensed (a convicted felon was caught doing one of these) An immense part of understanding the value of property occurs while walking through it (like observing the occupancy of 50 feral cats) It is generally more expensive (but I think its cheaper) to parse the functions out Places the consumer at...

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