Category: Trending

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...

Fighting for Consumer Protection and the Appraisal Industry 32

Fighting for Consumer Protection & the Appraisal Industry

I’m just an Average Joe, surrounded by some really smart people, and we are fighting back. I often wonder if Certified General, MAI or SRA appraisers sitting in their ivory towers often chuckle to themselves and say HA, data collectors will never impact commercial. Who cares about the residential appraiser. Well, it looks like it’s time for you all to care. Copied from a Real Estate Forum Post: “Good morning, My name is Kevin Graham, and I am with Beacon Property Data Collection Services. You had recently signed up to become a panel member and we have an assignment for...

Has Fannie Mae Gotten Too Big to Control? 28

Has FNMA Gotten Too Big to Control?

Has Fannie Mae gotten too big to control? That was one of the many questions asked to Senators & Congressman while in Washington DC. The agreement on whether Fannie Mae has gotten too big to control was unanimous. Most believe that the company is too large and complex to be effectively managed by the government. They argue that Fannie Mae is too big to fail, and that if it were to collapse, it would have a devastating impact on the housing market. Others believe that Fannie Mae is sorta manageable, and that the government has taken steps to reduce the...

Diversity, Equity and Inclusion Is Overlooked by HUD Secretary Marcia Fudge 19

Diversity, Equity and Inclusion Is Overlooked by HUD Secretary Marcia Fudge

Marcia Fudge, the Secretary of HUD, decided to convene a special meeting of master minds with absolutely no real diversity, equity or inclusion included, with the intent of “closing the racial gap and increasing access to homeownership in African American communities.” Appraisers, all the racial mud-slinging against appraisers by the current government is extremely disheartening toward our honored profession. The people ‘in power’ over the last few years have been fond of image building and acronyms, believing those items will have magical influence over property values, and how people conduct themselves. One of these is named DEI, which stands for...

GLA Adjustment Process: - Adjusting the Full Difference vs. a Threshold Amount 79

GLA Adjustment: Adjusting Full Difference vs a Threshold Amount

Appraisers, on Thursday, before the Memorial Day holiday, I circulated across the US an email asking for response to a simple two question survey about how you “adjust” the GLA square footage between the Subject and Comparables. The questions: adjust 100% of the square foot difference, or adjust the difference after a ‘threshold’ square foot amount (meaning not the full 100% difference). I received a respectable number of responses compared to emails sent out, and also posted to 3 different web forums, nearly 200 replies. So that’s enough to validate the percentage of both responses, and report the trends. As...

And Why Is the Second Appraisal Always the “Correct Value?” 19

And Why Is the Second Appraisal Always the “Correct Value?”

On Friday morning, May 19, I was one of five expert witnesses (and the only as an appraiser) to testify on the topic of appraisal bias in front of the Appraisal Subcommittee (ASC). During the first hour of testimony, our fourth grandchild was born. My wife was in the audience and stepped out of the hearing (the nerve!) to take the call from my oldest son on the news of our new granddaughter. The Appraisal Subcommittee (ASC) held a second hearing on challenges facing the appraisal industry, including barriers to entering the profession and racial bias in home appraisals. The...

AMC Fee Impact on Appraisal Fee 78

AMC Fee Impact on Appraisal Fee

While the borrower was charged $695 for the appraisal, the appraiser was only paid $301. The AMC fee was $394.  We often hear complaints from GSEs and lenders that appraisal fees are too high, hence the push for modernization. Yet they fail to acknowledge that this is due to an overly bloated middleman – the appraisal management company (AMC). As a consumer, you should be aware of the potential for being fleeced on appraisal fees. It’s possible that you could be paying more than double what the appraiser is receiving for actually doing the work, with the excess going to...

VA Appraisal Request Form at Heart of AIR Violation Class Action 61

VA Appraisal Request Form at Heart of AIR Violation Class Action

While the statute doesn’t explicitly mention that providing a loan amount is an AIR violation… When a mortgage lender seeks to make a Veterans Administration-backed home loan, the lender requests an appraisal from the VA’s appraiser panel by using a form entitled Request for Determination of Reasonable Value. For many years, until it was revised in July 2022, this form had a box labelled “Refinancing-Amount of Proposed Loan.” This box asked the lender to fill in the proposed loan amount for refinances. Once submitted, the form begins the appraisal process and is provided to the appraiser assigned by the VA...

The New & Improved Fannie Mae FRAUDULATOR 2.0 42

The New & Improved Fannie Mae “FRAUDULATOR 2.0”

Originally known as Fannie Mae’s Collateral Underwriter (CU), and subsequently Collateral Underwriter 2.0 (CU-2)i this always dubious product of Fannie Mae is increasingly being referred to by some, if not many American Appraisers as The Fraudulator / Underwriter 2.0 (FU-2). To be clear it is not limited to the Collateral Underwriter (CU & CU-2) software. The new Fraudulator (FU-2) combines the CU products with their numerous improper uses. The end result of which includes OUTRIGHT FRAUD being perpetrated against banks via the repurchase letters Fannie Mae now issues on a quota based system rather than because of legitimate appraisal defects....

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