Mary Cummins, Real Estate Appraiser, Real Estate Appraisal, Los Angeles, California, Mary Cummins.

Mary Cummins is a real estate appraiser in Los Angeles, California with 38+ years of experience. Cummins provides real estate appraisals for banks, lenders, mortgage brokers, Appraisal Management Companies (AMCs), lawyers, Courts, factors and private parties for lending, lawsuits, probate, estate planning, divorce and all types of litigation. Cummins provides 1004, 1073, 1025 and other form reports, narrative reports and historical appraisals besides real estate research and appraisal advice.

Showing posts with label appraisal institute. Show all posts

Friday, April 12, 2024

Bias Against Real Estate Appraisers by Mary Cummins

appraisal bias, cindy chance, ceo appraisal institute, mary cummins, real estate appraiser, real estate appraisal, confirmation bias, loss aversion, anchoring bias,

Interesting letter from Cindy Chance CEO of the Appraisal Institute. Basically people who automatically claim appraiser bias are they themselves biased. This is why the false narrative of the "racist white male appraiser" has gained so much traction in the media and with the public. It's gotten to the point that the government made up a fake solution to the fake appraisal bias problem to satisfy the public and garner votes for the upcoming election i.e. PAVE report. What we appraisers actually do is unbiased. We rely on data, numbers and facts only. Appraising is a math formula.

When I see some lay people claim appraiser bias I feel that they believe this 100% even though AEI's research based on government data proved this is not true. Racism and bias definitely exist. Sadly blacks, Latinos and others have been and continue to be discriminated against in our country. It appears to be human nature or confirmation bias to assume that past biased behavior will always be repeated. They will assume anything they don't like MUST BE the result of racism, discrimination and bias. They will falsely assume any phrase must be code for a discriminating term like "Marin City" in the Marin case. It was just the name of the subject's city.

I've seen this in many areas besides appraisals. A black woman said a white man told her to smile. She claimed he was racist wanting her to smile like old black minstrels to entertain him. I told her that all men tell all women to smile. I've been told the same in the past and my skin is white. It's not about racism but control, harassment, flirting... Because the woman was black she automatically assumed it was only because she was black.

Now that we know that the public is biased against real estate appraisers what do we do about it? Hopefully the next parts of this letter will answer those questions. We know Automated Valuation Methods AVMs are not the answer. They are more biased than human appraisers because they don't have all the information needed to do a full valuation. They don't know condition, upgrades, lot type, view, specific location in a neighborhood or if the home even exists. Zillow doesn't even use nearby comps if there are no recent ones of a similar size. They'll go two miles away into a neighborhood worth twice as much to find recent, similar sized homes. I have my own suggestions that may help a little.

Write your appraisal report knowing biased lay people will be reading and sharing it publicly. Don't use abbreviations or subjective terms. Explain everything in clear simple language at a fifth grade reading level like most newspapers. Show your math. Include your regression charts if necessary. This is especially important if the subject doesn't conform to the median home in the area. I've noticed most of the big media cases of alleged appraiser bias were nonconforming homes with major issues on the edge of two very different neighborhoods. Of course they wanted their home to be worth as much as the larger, upgraded homes with views in a different neighborhood that sells for twice as much even though they initially bought it at a huge discount.

If you are given comps and they are not comparable, mention all of them in your report. They'll end up in a Reconsideration of Value ROV anyway. Specifically state why they are not comparable. State why they are worth more than subject, i.e. larger, fully remodeled, full ocean view, cul-de-sac, different neighborhood...

If anyone has any suggestions on how to counter bias against appraisers and their reports, please, leave a comment. This is a huge problem that affects us all.

"From Cindy's Desk

I’ve heard from many appraisers, particularly residential appraisers, that the Appraisal Institute should have done better at standing up for them by making the public aware of their skills and professional discipline. I agree. Sweeping, sensationalized claims of “bias” about our profession ignore appraisers’ core skills, ethical standards and professional disciplines. The valuer is the only party to a real estate transaction without a financial interest in its outcome; moreover, the appraiser’s duty is to uphold the public trust, by providing an unbiased, impartial opinion of value based on a rigorous process that is continually refined and improved by the profession. Appraisers are heavily regulated to ensure quality standards, held to a rigorous ethical professional code of conduct, and our SRA and MAI designations reflect the profession’s highest standards. Why then has it been difficult for appraisers to respond effectively as a profession to unfair accusations of bias?

One reason is that claims of bias are antithetical to what appraisers do. (In case you’re interested, philosophers and linguists call this a “failure of presupposition,” and it is hard to address because it assumes something that is not actually the case.) As of now, the public is hearing from the media and politicians about a certain terrible kind of bias. What they need to know is that professional real estate appraisal has long been built on eliminating all kinds of irrational bias. Appraisers, ironically, have been ahead of the curve in working continuously to identify and eliminate every kind of bias from their professional analysis.

Thanks to Daniel Kahneman, who died recently at the age of 90, and his partner Amos Tversky, the scientific community has recognized for over half a century that there is a normal human tendency toward bias, which they termed “cognitive bias.” Their research showed that cognitive bias is part of the way all our brains work normally. In fact, our survival depends upon it.

These Nobel Prize winners (followed by several more in the following decades) demonstrated that our rationality is a myth and bias is the norm, and it has been a good thing for humans, evolutionarily speaking, because bias allows us to not have to think too much in cases where a quick judgment increases our odds of survival. Roughly defined as “any predictable error that inclines your judgment in a particular direction,” bias is a natural feature of the way humans think.

It’s easy to recognize some of our most common biases that reflect what is “normal.” We are naturally more averse (two times more!) to negative consequences than we are attracted to positive consequences. This is called “loss aversion,” which helps explain why we don’t like to change, even when things are going poorly. Being twice as likely to avoid downside as to pursue upside helped kept us away from poison plants and cliff edges, but it also often keeps us from pursuing the best courses of action. There are many, many such examples of normal (not good, but normal and understandable) cognitive bias, including “anchoring bias,” the tendency to rely too heavily on the first piece of information one receives, “availability heuristic,” our tendency to overestimate the importance of information we remember easily, and “confirmation bias,” the tendency to focus on information that confirms our pre-existing hypothesis.

Cognitive bias is powerful and can only be managed through the application of methodologies and procedures that require disciplined analysis of data and information (sound familiar, appraisers?). In fact, cognitive bias is why we depend on professionals trained to be unbiased specifically where our proneness to irrationality could create serious problems, such as science, finance, and economics. Appraisers’ impartial analysis protects the public from our hard-wired, everyday biases that would undermine the healthy function of the real estate industry.

Appraisers are essential to a healthy economy because there are all kinds of opportunities for cognitive bias to infect real property valuation; real estate is a context ripe for “loss aversion,” “anchoring bias,” ”availability bias,” “conformity bias” or “conflict avoidance,” to name a few. Appraisers are trained not to fall into these irrationality traps. Appraisers are continually trained to adjust their opinions of value based on data and professional discipline, precisely to avoid cognitive biases to which homeowners, loan officers, and all of us are susceptible. And in case you think machine learning and AI will save us, it is worth noting that AVMs and AI-generated results are not more rational; on the contrary, machines proliferate biases reliably, that is, unless there are educated appraisers who are regularly producing inputs to correct them.

In reality, appraisers have a great story to tell, but we have a long way to go to refocus the terribly flawed “appraiser bias” narrative onto facts and science. With facts, fairness and science all on our side, and with your help, my team and I have committed to advocacy and communications built on each member’s commitment to doing the right thing, the right way.

There’s more to say about bias. That’s why this is part 1 of a 3-part series on bias…next up…the normal biases of homeowners and loan officers, “noise” and bias, cultural bias, the GSEs, and “banned words”…

Cindy Chance, CEO of the Appraisal Institute"

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.

Mary Cummins, Mary K. Cummins, Mary Katherine Cummins, Mary, Cummins, #marycummins #animaladvocates #losangeles #california #wildlife #wildliferehabilitation #wildliferehabilitator #realestate #realestateappraiser #realestateappraisal #lawsuit real estate, appraiser, appraisal, instructor, teacher, Los Angeles, Santa Monica, Beverly Hills, Pasadena, Brentwood, Bel Air, California, licensed, permitted, certified, single family, condo, condominium, pud, hud, fannie mae, freddie mac, fha, uspap, certified, residential, certified resident, apartment building, multi-family, commercial, industrial, expert witness, civil, criminal, orea, dre, brea insurance, bonded, experienced, bilingual, spanish, english, form, 1004, 2055, 1073, land, raw, acreage, vacant, insurance, cost, income approach, market analysis, comparative, theory, appraisal theory, cost approach, sales, matched pairs, plot, plat, map, diagram, photo, photographs, photography, rear, front, street, subject, comparable, sold, listed, active, pending, expired, cancelled, listing, mls, multiple listing service, claw, themls, historical appraisal, facebook, linkedin

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Mary Cummins

Mary Cummins of Cummins Real Estate Services has been in real estate since 1983, over 35 years. She is licensed by the Bureau of Real Estate Appraisers. Mary Cummins was an agent and broker licensed with the California Department of Real Estate selling residential income, commercial buildings, raw land and homes for Merrill Lynch Realty in Beverly Hills and Westside Properties in Los Angeles before concentrating on appraisals. Mary Cummins currently provides real estate appraisals, expert witness testimony, historical research, legal real estate research for mortgage brokers, banks, lawyers, factors, insurance companies, financial consultants and private individuals. Mary Cummins was born and raised in Southern California. Cummins attended Beverly Hills Good Shepherd Catholic School and Beverly Hills High School. Besides being on the Dean's list, Mary Cummins was a top ten national swimmer and competed on the men's water polo team. Mary Cummins began college at the age of 15 attending the University of Southern California on scholarship, majoring in Psychology/Sociology. http://www.animaladvocates.us http://www.facebook.com/AnimalAdvocatesUSA

Friday, January 12, 2024

McKissock Learning Will No Longer Offer PAREA Due to Costs by Mary Cummins Real Estate Appraiser

mckissock learning, mckissock,appraisal institute, parea, real estate appraiser, mary cummins, real estate appraisal, training, certified, residential, license, hud, fha

PAREA is the Practical Applications of Real Estate Appraisal. In order to become a licensed appraiser you currently need about a year or two and 1,000-1,500 hours of training experience as a trainee with another licensed and generally certified appraiser. You also need basic classes and other requirements. Because it was so difficult to find mentors willing to train trainees for free the government allowed the PAREA training alternative to hours with a live mentor. Real Estate Appraiser education provider McKissock Learning was going to be one of the government approved companies, organizations offering PAREA training. The Appraisal Institute is another organization offering the training.

Yesterday January 12, 2024 McKissock emailed people who were interested in the program that they would no longer be offering the PAREA program. See below email.

"Happy New Year to you and yours. We hope this letter finds you well. With a strong commitment to responsibility and transparency, we want to inform you about a significant decision regarding the McKissock PAREA (Practical Applications of Real Estate Appraisal) project.

After careful consideration and thorough evaluation of various factors, we have made the difficult decision to cancel the McKissock PAREA project. We understand that this news may be unexpected, and we want to provide you with a clear understanding of our reasoning and the steps we are taking moving forward.

One of the primary factors contributing to the cancellation is the substantial resource cost required to provide a product of the quality we envisioned. In our pursuit to deliver a premium solution, the associated costs exceeded initial estimates, resulting in a higher-end price to our customers. Regrettably, we recognize that this higher cost would inadvertently create a new barrier to entry into the appraisal profession – specifically, a financial obstacle."

The cost of the program was always a major issue and hurdle to entrance in the field. You couldn't even start the program without first paying for and taking $1,700 worth of McKissock classes. The Appraisal Institute stated the PAREA program would cost about $10,000 per a July 19, 2023 webinar. All of the training would be online. There would be no in person mentorship.

From a monetary point of view the expensive cost of the training might be a total waste without real mentorship. This is not a trial an error occupation. You need someone training you in the beginning. You won't make any money if you don't know what you're doing. The only people who could end up making money from the training were possibly the training organization. They'd make money from government grants, nonprofit grants and class fees from paying students. It'd be like those worthless online degrees.

Another main problem is the real estate appraisal market today is at its absolute lowest point. There's very little lending work. The main cause is our current high interest rates. No one is selling if they have to buy another home. Why lose a 2.5% interest rate and triple your monthly mortgage at 7.5% or so. No one would want to refinance for the same reason. Sales volume is at its lowest in about 20 years per Ryan Lundquist's fantastic statistics. I've seen the same in Los Angeles, California.

Another even bigger issue is the use of live appraisers has been decreasing recently because of appraisal waivers, AVMs (Automated Valuation Methods) and hybrid type appraisals. Even though a live appraiser is used for part of the hybrid appraisal they aren't being paid as much as a full appraisal, i.e. $75-$165 vs $300-$500. The few full inspection appraisals done by live appraisers are very complex appraisals which only appraisers with many years experience are allowed to do. There's just not as much work today for anyone.

Previously the government said there were not enough appraisers and now there are definitely way too many. If you look at Facebook appraiser groups, everyone is hurting. Many have retired or had to get side gigs. If a fully trained and experienced appraiser of 20 years can't get work, a newbie has no chance at making enough money to survive. Even people with 20-40 years of experience are quitting due to lack of work.

You'd have to really be an idiot to shell out $1,700 for basic classes, $10,000 for PAREA, $6,000 appraisal costs first year just to make no money. Few can afford that upfront cost even if they could make the money back in a year or two. Another huge hurdle is lenders only use appraisers with three years minimum experience. No one would hire you fresh out of PAREA.

I believe that McKissock realized there probably won't be enough people willing to pay for the classes at the moment to justify their training costs. They couldn't make enough profit off the program today. Even if the government and nonprofits offered grants to pay for the training the students probably wouldn't get any work from the program. No one would be happy. There would be a lot of online complaints.

I'm actually glad McKissock is not continuing with the program at this time for the sake of the potential new appraisers. Now is not the time to start out as an appraiser because of the market conditions. I would at a minimum wait until things rebound when rates go down. Maybe by then there will be an affordable PAREA program maybe subsidized by the government for people who can't afford it. You'd still need live experience and will have to deal with all the other issues noted above but it'd be better than what we have today.

*FTR I've been taking classes with McKissock since they first started around 1990. Back in the day they only offered in person classes taught by the McKissock's out of a small classroom in Orange County, California. Today I take bundled classes with Calypso because they're cheaper.

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Mary Cummins

Thursday, July 20, 2023

PAREA Update from David Samnick - Practical Applications of Real Estate Appraisal , comment by Mary Cummins

parea, practical applications of real estate appraisal, mary cummins, real estate appraiser, real estate appraisal, los angeles, california, hud, ai, appraisal institute, mckissock, aqb, Appraiser Qualifications Board, mentor, trainee, license, certified residential,

I haven't been following PAREA as closely as I should have but thankfully appraiser David Samnick has been following it. He attended an Appraisal Institute meeting yesterday about the program. It's disheartening to say the least. The purpose of PAREA was to make it easier, cheaper and faster for new appraisers to get the training and hours of real life experience they need to get their license. A main purpose was to help diversify appraisers by making it cheaper and getting rid of the mandatory mentor/trainee. Lower income people can't work as a trainee for free for two years. I wrote a few articles about this huge obstacle to getting a license. Here's one from June 2021. https://mary--cummins.blogspot.com/2021/06/difficulties-becoming-real-estate.html

This post below by David Samnick makes it clear that AI and others such as McKissock have used the issue of diversity just to line their pockets with money. The Appraisal Institute, McKissock make money selling education hours to appraisers. AI got a grant from the government to work on PAREA. May 18, 2023, the AQB approved the first PAREA program, belonging to the Appraisal Institute (AI). I wish I were wealthy and retired so I could train people for free. I'd only train POC if that were legal and not discriminatory.

"Practical Applications of Real Estate Appraisal (PAREA) is a program that aims to revolutionize the real estate industry by increasing the number of appraisers. However, after listening to the Appraisal Institute speaker at yesterdays board meeting it quickly became evident that this initiative is a complete failure.

A) You cannot start PAREA until you have received all your real estate appraisal education. 94 hours = $1,700 per McKissock

B) Appraisal Institute speaker said that most AMC's/banks won't accept licensed appraisers work so he suggests going the CR route. Cost to become a CR appraiser through PAREA - $10,000

C) PAREA is a complete online course. Zero mentorship in the real world. No physical measuring. No driving. No real time experience. No true mentorship.

D) No discussion with the PAREA student about the pay to play. Multiple MLS services, E&O insurance, business expenses, accounting, appraisal software, computers, reliable transportation, and other miscellaneous expenses. Total costs can exceed $6,000 per year.

E) The Appraisal Institute said that this would increase diversity into the appraisal field yet could not tell us the breakdown of how many applicants were minorities.

F) PAREA graduates will be scooped up by AMCS to sign off on Hybrid reports performed by third party data collectors.

G) PAREA graduates have no geographic competence.

H) Total cost for PAREA at the end of the day = $17,700 and potentially more.

The Average Joes argued several points in the board meeting.

A) A graduate of the PAREA course would be paid and treated like a trainee as they have no real-world experience.

B) We could have more appraisers back into the industry if banks/amcs would allow appraisers to use their trainees.

C) Reinstate Licensed appraisers to be able to mentor new trainees. This would introduce the next generation of appraisers into the business.

D) Petition FHA to reinstate any licensed appraiser who took the FHA course and had to pass the test.

E) More appraisers would hire trainees if the AMC model wasn't taking so much money out of the pockets of working appraisers. Work is slow. Most have the mentality that my bills come before your bills.

In closing PAREA launched in 2019. And the program has not been successful in diversifying the appraisal profession. In fact, a study by the Appraiser Qualifications Board found that the PAREA program has had a negative impact on diversity in the appraisal profession.

The study found that the PAREA program is disproportionately used by white appraisers. In fact, white appraisers are more than twice as likely to use the PAREA program than minority appraisers. The study also found that the PAREA program is not as effective in providing a more accessible pathway to licensure as the traditional apprenticeship model."

https://www.linkedin.com/feed/update/urn:li:activity:7087764386198556672/

Below was stated May 2023 by AI. “Market research has shown that value proposition—what PAREA is worth to someone in the marketplace—is around $5,000,” DiBiaso said. “Our pricing strategy may be different than that and include scholarships and discounts and payment plans. We have a commitment to The Appraisal Foundation that we will give preference of our scholarships to minorities, veterans, and people who indicate a willingness to serve in rural areas. The scholarships will come from a number of different sources including AI.”

McKissock stated their program will be ready June 2023. “We are investing heavily in the technology tools that appraisers use,” Nancy Gerome said, McKissock’s appraisal general manager. “Our hope is to have them consistently trained. You’ll get all different types of properties and scenarios because we’re leaning into the technology and experience. We’re trying to be thorough, that’s why we’re taking our time. We want to get it right.”

McKissock staff is preparing their launch to accommodate thousands of trainees, over a staggered period. They estimate the average time a person will take to complete the program is six months. The cost for participating is not yet determined. Staff did confirm there will be a “buy now, pay later” option, as well as scholarships.

“We are building a scholarship program because we know one of the goals of PAREA is to bring diversity into the profession, and we want to make it as affordable as we can,” Gerome said. Those interested in participating in a PAREA program of either McKissock or AI need to have already completed their Qualifying Education. "

Clearly when the government said there was a probably with diversity among real estate appraisers and the government would give money to help diversify appraisers all these companies heard was MONEY. They will just be training more appraisers for more money and the appraisers will probably all still be mainly older white men.

Appraisal Institute talks about grants and scholarships for POC and women all the time. I tried to apply and they said I have to pay to join their organization before they'd even talk about it. What if I had no qualifications or were denied? I'd be out the membership fee which is not cheap. It normally costs $15,000 to become an AI MAI appraiser even though I have 40 years of experience and have taken every publicly available real estate appraisal class in existence over the last 40 years. This is clearly a racket when you consider the government gave them money for the program. Gate keeping with a membership fee to the Appraisal Institute before you can access government funding.

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Mary Cummins

Saturday, January 21, 2023

FHFA Uniform Appraisal Dataset Aggregate Statistics and How it Impacts You, by Mary Cummins Real Estate Appraier

FHFA Uniform Appraisal Dataset Aggregate Statistics and How it Impacts You, notes and comments by Mary Cummins real estate appraiser, Appraisal Institute, Jillian White, Dr Rashida Johnson-Forsey, Doug Potts, AI, real estate appraisal, appraisal bias, race, white, black, MAI, SRA, FHFA

January 12, 2023 the Appraisal Institute AI posted a video titled "FHFA Uniform Appraisal Dataset Aggregate Statistics and How it Impacts You." Below is their text about the video. Below that are notes which I took and my personal comments about these issues.

"The Federal Housing Finance Agency (FHFA) recently published its new Uniform Appraisal Dataset (UAD) Aggregate Statistics Data File, consisting of 47.3 million UAD appraisal records collected from 2013 through the second quarter of 2022 on single-family properties.

FHFA also launched UAD Aggregate Statistics Dashboards on its website to provide user-friendly visualizations of the newly available data. The UAD Aggregate Statistics Data File and UAD Aggregate Statistics Dashboards give stakeholders and the public new access to a broad set of data points and trends found in appraisal reports.

In this webinar recording, hear from the FHFA Representative who worked on the UAD release, as well as appraiser practitioners about their initial observations and potential use cases of the UAD information for appraisers."

Link to video.

https://www.youtube.com/watch?v=kKGzW1652EI

1. First speaker was Dr. Rashida Johnson-Dorsey of FHFA. She spoke until the 22 minute mark about the FHFA data set statistics. She stated the new data set is from many anonymized real estate appraisals. She believes its most important use is to allegedly discern appraisal bias in valuations of white versus black home buyers. She feels the most important statistic is how many appraisals came in lower or higher than the contract price. She believes this shows bias against minorities specifically blacks.

My comment. Appraisers should not try to meet the contract price. We are mandated to appraise for market value based on most similar, recent sold comparables. If someone wants to offer $10 billion for a $50K shack, fine, but it won't appraise for $10 billion. Contract price does not equal value. The most important thing is market value and not contract price.

https://www.fhfa.gov/DataTools/Pages/UAD-Dashboards.aspx

2. Second speaker was Jillian White. She worked for Better Mortgage as an appraiser then was promoted right before they basically went under. She quit right before the end. Better was known for stating all other appraisers, companies are racist except them. It was part of their marketing. They said they were going to hire diverse appraisers but instead just went out of business. White mainly spoke about racism by white appraisers against blacks at various meetings and to the media while she was at Better. Generally Jillian White talks about racism and appraiser bias against black people. She generally brings up the stories about how she told black relatives to white wash their homes before sale or appraisals. All agents tell everyone to remove all personal photos, items... for many other reasons. She has repeatedly talked about how most appraisers are white old racist men who hate black people and appraise their homes for less than market value. She even said the appraiser trainee program is racist. I based this upon her recorded public statements in the media and public meetings which I've quoted. She supports Andre Perry's false statistics and paper. She was involved in "Our America: LowBalled" promoting the false narrative of the racist appraiser. I've copy/pasted her quotes, comments here in previous articles. While racism definitely exists not everything is racism. Research by AEI showed there was no effect of race of borrower on appraised values.

She actually talked about the "practical application of aggregate UAD statistical data" and
how lenders, AMCs and appraisers can use the data to find alleged racism and bias in appraisals and appraisers. She emphasized that the most important data is whether appraisers come in below or above contract price. Mind you the data set is HUGE and covers every factor involved in appraising. Contract price is one of many, many, many factors but it's the only one they care about. She stated there will be more "scrutiny" if appraisers come in below contract price. There will "be more noise if the value is below the contract price." Noise means complaints. You come in high, you're good to go.

White stated the PAVE report Action 2.3 stated regulators will look at lenders to identify appraisal bias. They will track whether you come in over or under contract price. They will check areas that are 80-100 % minority in census tracts. The lender must explain why they "came in low." "Came in low" per contract price and not market value. She stated over 23% of appraisals were under the contract price in minority areas. We don't have to explain if he come in high. (Wink, wink, hint, hint, come in high.)

My comment: This came up previously. There is another correlation between over/under contract price appraisals. It's not the race of the buyers or appraisers. It has to do with lower income people buying in lower priced areas.

White stated the AMCs will also be questioned. They will have to ask appraisers "why" they came in under the contract price in those areas. Appraisers will then be "forced to explain" why they came in lower than contract price more often than their peers.White stated AMCs will have to ask their appraisers "why are you out of whack in this territory?" i.e. why did you come in below the contract price in this minority area?

My comment: So much for the Dodd Frank Act when you have the government trying to force, push the appraiser to meet the contract price only in minority areas. So much for independent appraisers and appraisals. Appraisers are now being pushed to come in higher than market value in only minority areas. The purpose of the Dodd Frank Act was to stop lenders from trying to force appraisers to meet the contract price! They said it was a cause of the Great Recession. Now the government wants to violate the act and repeat the huge mistake! They're encouraging appraisers to commit bank fraud and commit federal crimes.

White stated that the statistics look at adverse site condition adjustments. She stated that's where appraisers make adjustments that make the value come in lower. She stated maybe in the past there would be a market reaction to a negative site but not today. Is it on a busy street? People don't care today. She feels some appraisers used this adjustment to devalue some properties of some people specifically minorities.

My comment: In the crazy 2021, 2022 market frenzy there could be dead rotting bodies in the homes and buyers would not have cared. They'd just push the dead corpses to the street and carry on. They were willing to buy shit homes in shit condition in shit locations just to own a home. They waived appraisals, inspections, repairs, paid way over list price...and now they regret it. Soon the banks will too.

I saw this. I still mentioned all the negatives I saw and included a market reaction if there was one. You know what? A bank is going to care about those factors if the loan goes south when the market goes down. The market has already made that change. When the market goes down buyers will not want to own a house wedged between a strip club, a recycling center and the 110/10 interchange. They either won't buy that home or they'll pay much less for it. Appraisers appraise at market value to protect the bank and government. Our purpose is not to help a buyer over pay for a property they may not be able to afford and will probably lose to foreclosure in a downturn. This is how people lost their homes after the Great Recession. And guess who was blamed? "Racist appraisers!"

White spoke from 22-45 minutes in the video.

3. Doug Potts, MAI Appraiser.

This guy promotes the false, misleading and totally debunked Andre Perry Brookings Institute "paper." I had a problem with this speaker and what he said. I watched the video after I heard about the crazy things he said from other appraisers. Here we go!

Doug Potts is involved in a grant project that looks at wealth creation and equality. He said blacks have been denied access to wealth in Detroit, Cleveland, Baltimore. If you are born black and poor, you are more likely to stay poor than if you are white. He mentioned redlining.

My comment: This again goes back to the income gap and socioeconomic issues. The real correlation is race is related to income which correlates with wealth, generational wealth and the value of a home you can afford to buy and own. Race is not the cause of the value of a home appraised by an appraiser. Here is an article I wrote about AEI's research about the correlation between race and socioeconomic issues including the income gap. https://mary--cummins.blogspot.com/2022/03/aei-reply-to-pave-report-andre-perrys.html

He mentioned redlining. I wrote an article about redlining here https://mary--cummins.blogspot.com/2021/05/redlining-in-home-loan-financing-mary.html We still use all the same factors to calculate loan risk EXCEPT race, nation of origin. The correlation is not race = home value. It's race = income = value of home one can afford to buy and own. Race, nation of origin never mattered in the redlining maps. If you removed them, the risk didn't change. They should have never been included and weren't included in all stats, maps or records.

Doug Potts said if there is no capital for homes, home loans, areas will collapse.

My comment: It's called capitalism and real estate cycles. People don't want to live in one area so they move to a nicer more expensive one. The old area decreases in value as a result while the new one increases in value. Banks wants to loan money where they can make a profit and limit risk and loss.

Doug said the denial of capital caused whites to leave. No, it didn't! Some people moved to a different area which they found more desirable. THEN values decreased and banks loaned less money to the area based on the lower values of the homes. It's called real estate cycles which has happened forever all over the world. Why is Beverly Hills land worth more than land in Watts? It wasn't "denial of capital." Denial of capital is a result of the change in real estate cycle and property values. Here's an article I wrote on real estate cycles. https://mary--cummins.blogspot.com/2017/04/real-estate-cycles-mary-cummins-real.html

Doug thinks appraisers value homes lower in high minority areas because of the race of buyers. If he really believes this, he should surrender his appraiser license because he's not fit. I appraise in high minority areas with lower values in South Los Angeles. Most of the new buyers are uneducated, inexperienced first time buyers. They want their first home so bad they will offer over market value without knowing it. They will make offers on the worst homes in the area with small lots, poor condition, only one bathroom, recently renovated after major fire, home recently destroyed by tenants, located between freeway and industrial site... because it's all they can afford.

If the median home in the area is 1,000 sf with C3 condition on a 5,000 sf lot built 1920 and goes for $350,000, they offer $325,000 for a smaller home in worse condition on a smaller lot in an inferior location in the neighborhood. Looks like a good deal to them but it's probably worth much less. You're generally looking at minimum home purchase prices. Sometimes they want to buy a home because they were offered government loans with no money down. They have no skin in the game and think they're getting a free house which will double in value in a year. I've had people call me up asking me to find them a VA home, home they can buy with government funds. They tell me they have no job, income or money and believe they can buy the home. Some desperate scammy agents will sell these people homes they can't afford.

Homes in higher minority areas generally have issues. The lower the home value the more issues they have. The correlation again is race and income. Government needs to fix the income gap between white and black, brown. They also need to fix the gender income gap. Lower valued homes are generally located in inferior locations with close proximity to freeways, dump sites, oil fields, industrial property, run down areas... I drive these areas and see it. If the property has a lot of issues, is in fair condition, needs work, it won't meet requirements for a regular loan. It will end up under contract price. A flipper, developer, speculator would need to buy it for cash or with subprime mortgage, fix it up then sell it for a higher price on the regular market with a regular loan.

Doug thinks the lower value appraisals are "prices crushes." He thinks it's just unfair racism. He thinks if there is a 1,000 sf home in South LA on a 5,000 sf lot built in 1920, it should appraise for the same price as a 1,000 sf home in Beverly Hills on a 5,000 sf lot built in 1920. Doug should lose his license. The main value of a home is the LAND and not the STRUCTURE. You are paying for the dirt. LOCATION, LOCATION, LOCATION.

This reminds me of 20 Pacheco, Marin, CA. The owners of that home wanted appraisers to ONLY use comps in Mill Valley 1-2 miles away. Mill Valley homes are worth twice as much as Marin. If you actually look at the two cities, they are very very different and not comparable. There's a reason why Mill Valley is worth twice as much as Marin. Doug thinks appraisers should widen their comp search to intentionally include other HIGHER priced comps. He said higher only and not lower. He thinks it's especially important in lower valued areas which generally have fewer sales for this reason.This was the same issue in Marin. Zillow stupidly widened their AVM search and used Mill Valley comps. More trustworthy Corelogic AVM only used Marin comps and came in at market value.

Doug Potts says his St Louis project "deprioritizes location." It can be used to "restore value." Doug says we can use the new data to cherry pick higher comps outside GSE selling defined rules. He said we can change the algorithm to change the numeric outcome. We can make 1+1=3 when it should be 1+1=2. He admits that it goes beyond assignment conditions. Hey, why not just add $1,000,000 to the appraisal of black owned homes. They can get huge loans, pay huge property taxes, huge monthly mortgage payment then lose their home in foreclosure because no one will buy it for $1,000,000.Doug spoke to 1:06 in the video.

Clearly Doug is out of his mind. What he is suggesting is called bank fraud. Bank fraud is punishable by at least 20 years in prison besides loss of license. No thanks. No one should do what he suggests. If his St Louis Project wants to give money, loans, houses to poor people, he can do that privately. Just don't expect the government, banks, public to pay to subsidize his personal project. No appraiser should lie about value to help a low income person over pay for a house. They end up with a bigger loan they can't afford to pay. No one would pay the higher appraisal value for the home. It's in the same less valuable location. An appraised value doesn't change the real market value. They'll be foreclosed upon and lose everything. You would be doing a disservice to these people. This happened right before the Great Recession. It also happened with student loans. They tell them they can make more money with a degree. Instead they only end up with tons of expensive debt and no new job or increase in pay. That is just plain cruel! They are hurting the people they claim they want to help. Fix the income gap and they can afford more expensive homes on their own.

In the past I've worked for nonprofits that help poor people buy homes. They never asked me to pump the value. They ask for market value. Sometimes they give 110% loans. They can do that as it's private money. Based on my experience giving people homes with no down payment is not the best way to help them. Help them make more money and buy their own home with a safe down payment and low mortgage payment.

It's a shame or a sham that the Appraisal Institute has jumped on the false narrative of the racist appraiser. They're doing it to protect themselves. They are mainly older, white, more affluent male appraisers. It costs $15,000 in fees, classes to become an MAI appraiser. What better way to deflect negative attention than to offer a webinar with mainly black speakers pointing the finger at others. If they really cared about diversity, they would make all their classes, educational material and literature free. Then all who take the classes could become MAI appraisers for free. They're a nonprofit but they won't do that because it's basically an old white affluent male elitist club that protects itself. They let a few women, minorities in, on the board for their image. They don't really care about promoting the industry or appraisers but themselves. They are actively attacking the industry and other appraisers with their positions in order to protect themselves.

Below are some comments on the YouTube video, see link above.

Carolyn Nuccio - 7PTC

"It's disgraceful that the Institute would be promoting using data that would result in misleading assignment results to resolve this finance issue, which at it's core is about "wealth creation"; and using appraisers to create that wealth. The FHFA should be focused on understanding market dynamics, and creating Federal Loan Guarantee programs that will lend above appraised value rather than trying to pressure appraisers into using data that will result in artificially inflated values. There's not enough data available about these statistics presented as to why the contract prices aren't appraising out. Jumping to the conclusion that appraisers are racially biased just because contract prices aren't being met is a huge jump. Perhaps the contracts need to be analyzed. Who are the sellers? Are they largely flipped properties owned by investors? Were the properties listed prior to contract? What's the List to Sale Price ratio in the market? This market derived data is all available on the URAR and should be included in the analysis. Perhaps some of the presenters could enhance their knowledge of how predatory lending works in disadvantaged neighborhoods. I would point to the Atlanta market back in 2004 - 2008 as an excellent example of how borrowers and homeowners were tricked into applying for, and qualifying for, over-valued homes and loans. Many of the appraisals did just as suggested in this presentation. The appraisers went outside of the competitive market for their comp selections in developing an opinion of value. As a result, when the borrower needed to sell their home, they were unable to sell it. Why? Because the original appraisal inflated the value and they couldn't find buyers to buy their home. The suggestions in this presentation are a sure fire way to create artificially inflated values; and a pretty good way for those involved in the transactions to be looking at jail time for mortgage fraud."

Pablo

"we have been taught location, location, location because that the the main and predominant factor when a buyer purchases the home. If there are two identical homes and one resides in an area that has more crime, lower rated school, you name it, they don't give a damn that it is the same house as they want. They won't consider it. There always needs to be lower income properties. What would happen to some of the economically struggling families that no longer can afford housing because of this ridiculous` method? This method would be discriminating against low income people because you are forcing the market up based on poor comp selection and MARKET MANIPULATION. If you did this with stocks, you would have the SEC knocking on your door."

Christopher Posey is a successful and experienced real estate appraiser in Chicago, Illinois. He watched the video and sent good questions to the moderator. His question was about appraiser liability related to this new value. Their reply is below along with his question. It's a closed real estate appraiser group so I can't share it publicly.

https://www.facebook.com/groups/appraiserforum/permalink/5779904935459009

Someone made a good comment stating these inflated appraisals would hurt poor people. If you artificially inflate the values then poor people can't afford to buy the homes. You aren't helping but hurting.

Below are some slides from the presentation.

DR RASHIDA JOHNSON-FORSEY

JILLIAN WHITE

DOUG POTTS

Mary Cummins

Monday, May 2, 2022

Appraisal Foundation Appoints Jillian White to Board of Trustees in Political Move, by Mary Cummins

April 30, 2022 The Appraisal Foundation (TAF) appointed Jillian White, Shelly Tanaka and Meredith Meauwly to the Board of Trustees. They also welcomed back the Appraisal Institute as a sponsor.

TAF is authorized by Congress as the source of appraiser standards and appraiser qualifications. TAF had been taking a lot of political heat recently because their Board lacks diversity because it's mainly older white men. While I applaud TAF for starting to diversify their Board I personally feel one of these appointments was in response to political pressure. That one appointment is Jillian White.

White is an ex appraiser who was recently named the "Head of Better+" March 2022 per her LinkedIn announcement. Better+ is Better's affiliate businesses of Better Mortgage. Better has been in the news for mass firings, lawsuits and major financial problems. Better Mortgage will most likely soon be out of business as the mortgage market shrinks as a result of the rise in interest rates and overall failure by Better's CEO Vishal Garg.

Jillian White was a real estate appraiser and real estate agent. "In 2016, Ms. White joined Better, a digital mortgage provider, as the Chief Valuation Officer." "In 2018, she was named the Head of Collateral." During Jillian White's time at Better she has been promoting the false narrative of the "racist white appraiser." She has done this by quoting false and misleading data. Jillian White has cited debunked Andre Perry's paper and Freddie Mac's note repeatedly. Andre Perry's paper was not published or peer reviewed research. It has since been proven to be false and misleading by very well known researchers at American Enterprise Institute (AEI). AEI also debunked the Freddie Mac note. Tobias Peter was invited by the government to speak at the recent House Committee of Financial Services about this issue and this misleading data.

Promoting the false "racist white appraiser" narrative promotes racism and hatred of others. White an Appraisal Institute appraiser is stoking the flames of hate and racism toward appraisers, white people and the industry as a whole. The Appraisal Institute AI recently stated they would enforce a zero tolerance of racism and hate speech among their members because of hateful racist behavior by appraiser Dave LaVigne. White has promoted the false "racist white appraiser" narrative through her many presentations and articles about blacks "being forced to" "white wash" their homes. Here are a few of those articles, "Why some homeowners of color erase themselves," "Black appraisers call out racial bias," and "Better Website: Keep an eye out for personal bias."

White went so far as to state “In the case of my family, our home was forever changed after that. A lot of the pictures never made it back on the wall." Who forced them not to return the pictures after the sale or appraisal? Every real estate agent knows and tells ALL of their clients REGARDLESS OF COLOR OR RACE to remove personal photos and items from their home when they sell their home to INCREASE THE SALES PRICE. It has nothing to do with race, color, religion... I did this when I sold my own home and I'm not black. As an agent I suggested all clients do the same.

Below is a still from one of her many public presentations where she points out the family photos, heirlooms and certificates she was "forced" to remove because of "racist white appraisers." This wasn't even for an appraisal but a basic home showing and sale of relatives' homes.

Jillian White stated in the Better website, "96.5% of all real estate appraisers are white." This is not accurate though it's true most appraisers are white just like real estate agents. "Oddly" people aren't complaining about the lack of diverse real estate agents. Even the general population of the US is over 76% white. People are actually complaining about appraisal gap which is more likely in a quickly appreciating market. They're falsely claiming the cause of appraisal gap is racism because of the change in political climate caused by the murder of George Floyd.

"The country is in a time of racial reckoning, heightened by a summer of protests against systemic racism and police brutality following the death of George Floyd in police custody." Floyd's death "sparked the largest racial justice protests in the United States since the Civil Rights Movement." "According to data from various sources, the Black Lives Matter movement is now the largest movement in US history." While racism exists and must be banished from our nation the pendulum has now swung to the extreme side. In this new light anything and everything is automatically "racist" today before even looking at the facts. Every appraisal gap is now "racism."

American Enterprise Institute AEI actually did research to see if racial bias affects real estate appraisal values. Their conclusion was NO, it's not common or systemic. 99% of the time we appraisers don't know the race, color, sex, religion of the owners of the properties we appraise and use as comparative sales.

Jillian White even stated to the media that racist white appraisers are the reason there are few black real estate appraisers. White states white appraisers refuse to have black trainees because they're racist. The actual problem is the trainee process and not "racist white appraisers." Appraisers don't want trainees of any color because they have nothing to gain and everything to lose. Hypocritical Jillian White doesn't even have trainees of any color.

White stated “This idea that we’re (real estate appraisers) just strictly reporting on the facts, that isn’t true, because if that were true you wouldn’t need appraisers." This shows that White either doesn't understand real estate appraising or she's lying to the public for her own agenda. All Appraisers know Automated Valuation Methods AVMs (robots, algorithms) can't and don't accurately appraise real estate. AVMs don't see views, specific location, upgrades, condition, elevation, lot type... All these facts must be viewed and appraised by a human real estate appraiser. We don't currently have exact view, lot type, degree of remodel ... UAD codes to input into the form. The human appraisers see and report the facts such as type and degree of view, condition, upgrades... Should White even be a real estate appraiser if she doesn't understand the basics of appraising? Should White with these racist ideas, clear discrimination and bias be a real estate appraiser? If a white appraiser were to state these same things but about black, Latino appraisers, they'd instantly be cancelled. In fact AI stated they want to take action against racist appraiser Dave LaVigne because of racist language. Perhaps they should take action against White. White has stated these racist things in her professional capacity.

Jillian White was a real estate appraiser and agent just like me. We are numbers, math and statistics people. White knows these things she stated are false yet she promotes them for Better mortgage as a form of "diversity" marketing and exposure in the media. That appears to be her real job at the company as she mainly attends meetings to promote these falsities to the public and government agencies. Now that Better is soon going out of business White continues to promote this false narrative at government meetings and presentations to promote herself for a future job after Better goes out of business.

The purpose of promoting the false "racist white appraiser" narrative was to promote Better as "diverse and non-racist." Better had promised to train, hire and use diverse appraisers but they have not done this. This was in fact Jillian White's original job at which she failed. Instead Better fired 900 people December 2021. 2022 they fired 3,000 more. Currently they're asking people to just plain quit.

Better began failing during a huge run up in refinances. Any idiot company could have been successful during this time yet Better was failing last year. March 8, 2022 Better fired 3,000 more people. The CEO of Better's main goal is to go public and cash out. That appears to be his MO based on his last finance company myrichuncle which went bankrupt.

There is a saying in large companies. When they appoint a lawyer or lower level employee as the head of the company or of a major department it's going out of business. The person was hired to ride the company into bankruptcy. High ranking employees have already been fleeing the company in 2019 and it's increased recently. Considering that Vishal Garg's last finance company went bankrupt then was sued for fraud by investors that appears to be the future of Better.

White's main recent activity has been speaking at government meetings about "racist white appraisers." She has been the face of discrimination in real estate appraisals in the media. While she has an appraiser's license this is most likely the reason she was appointed to the TAF Board. TAF has given into political pressure to appoint this specific person. By doing so TAF is basically supporting the false narrative of the "racist white appraiser" which is beyond disappointing. I personally feel TAF is doing this just to quiet pressure from Maxine Waters and others who are calling for the end of TAF. While TAF would benefit from diversity I don't believe getting rid of TAF is the best course of action.

Mary Cummins

Friday, February 4, 2022

What is the Appraisal Institute? AI is a private non-profit organization and not part of government by Mary Cummins

Many are under the false impression that the Appraisal Institute (AI) is part of the government that oversees and regulates real estate appraisers. That is absolutely false. They are NOT The Appraisal Foundation (TAF). The Appraisal Foundation is "Authorized by Congress as a source of appraisal standards and qualifications." TAF worked with some private appraiser organizations one of which was AI until 2010. TAF stated AI resigned instead of being suspended for violating the Foundation’s Code of Conduct for Sponsoring Organizations. Here's an article I wrote on who actually regulates appraisers and the appraisal industry.

The Appraisal Institute is instead a private non-profit organization 501 6 c FEIN 36-3739643 formed in 1992 whose mission is to promote real estate appraisers and the business of appraising, IRS code S41 "promotion of business." Their real mission is to sell memberships, classes, publications and their own designations such as MAI... They are primarily focused on commercial appraisers and not really residential. Many feel they are just a private white male commercial appraiser club that promotes itself and not appraisers or the industry as a whole. It costs $15,000 to become an AI MAI appraiser so it's not cheap. Only General Certified Appraisers can become MAI Appraisers.

Below is their most recent tax return which is their 2019 990 tax return from their Guidestar profile https://www.guidestar.org/profile/36-3739643 . All info came from this public document. Their income was $20,589,361. They allegedly had almost 17,000 members which includes retired, candidates, honorary and affiliates in 2019. In 2007 they stated they had 21,000 members so they lost members?

https://pdf.guidestar.org/PDF_Images/2019/363/739/2019-363739643-202013159349304521-9O.pdf

They state their mission is "THE APPRAISAL INSTITUTE'S MISSION IS TO ADVANCE PROFESSIONALISM AND ETHICS, GLOBAL STANDARDS, METHODOLOGIES, AND PRACTICES THROUGH THE PROFESSIONAL DEVELOPMENT OF PROPERTY ECONOMICS WORLDWIDE."

They have 98 employees and 198 volunteers. Their main income is selling classes, memberships for $18,000,000. Broken down it's $11,000,000 membership dues, $5,800,000 education, $557,000 publications/books, $507,000 admission, grading, $49,000 periodicals. They spend $10,000,000 on salaries. They have about $23,000,000 in assets. $11,000,000 net assets.

Their main employees and salaries, wages are below. Doesn't include bonuses, retirement, health insurance, other items which may be considerably more. AI sometimes pays for travel expenses of spouses.

Jim Amorin $435,000 50 hrs
Beata Swacha $223,000 50 hrs
Jeffrey Liskar $307,000 50 hrs
William Garber $225,000 45 hrs
Evan Williams $175,000 45 hrs
Stephanie Coleman $179,000 37 hrs
Robert Borst $160,000 37 hrs
Christina Mitakis $151,000 37 hrs

Officers/Directors

Stephen Wagner $164,000 40 hrs/week
Jefferson L Sherman $102,000 20 hrs/week
Rodman Schley $89,000 20 hrs
James Murrett $91,000 20 hrs

Independent Contractors

Heidi Korthase $122,000
Rich Feuer Anderson $120,000
Craig Harrington $100,000

There is an Appraisal Institute PAC Political Action Committee to which AI gives $101,000. They spent $574,000 in lobbying costs.

PAC disclaimer: APPRAISAL INSTITUTE PAC (AI PAC) PROVIDES A MEANS FOR DESIGNATED MEMBERS, CANDIDATES, AND PRACTICING AFFILIATES TO PARTICIPATE IN THE POLITICAL PROCESS ON A NATIONAL LEVEL. CONTRIBUTIONS CAN BE MADE BY INDIVIDUAL DESIGNATED MEMBERS, CANDIDATES, AND PRACTICING AFFILIATES OF THE APPRAISAL INSTITUTE AND THEIR FAMILIES, AS WELL AS BY APPRAISAL INSTITUTE EMPLOYEES. CONTRIBUTIONS FROM AI PAC SUPPORT THE PRIMARY AND GENERAL ELECTION CAMPAIGN EFFORTS OF CANDIDATES FOR THE U.S. CONGRESS WHO SUPPORT AND PROMOTE THE PRINCIPLES OF THE APPRAISAL PROFESSION. AI PAC DOES NOT CONTRIBUTE TO POLITICAL PARTIES, TO PRESIDENTIAL CANDIDATES, OR TO LEADERSHIP POLITICAL ACTION COMMITTEES.

They received grants $87,000 and paid about $664 in grants. All this money and almost no grants to women, POC or people with less money. Makes it hard to believe they are behind the new grants program for women, POC or people with less money. They basically waited until they were forced to do it. Not only that but they say you must pay to join their club just to apply for a grant. On the flip side they have no problem receiving grants from others such as a PAREA grant from TAF.

Most in the organization are older white males who are commercial appraisers. There are very few women and fewer POC and residential only appraisers especially on the board or as employees, consultants.

Below is an article by someone with a lot more knowledge about AI than myself. They had over 25,000 members and now they have about 17,000. It also talks about the loss of education revenue due to online and virtual education. In 2016 main AI started taking the Chapter's money. During this decline in members there has been a great increase in salaries, wages and travel expenses.

https://www.millersamuel.com/epic-fail-the-appraisal-institute-irs-990s-show-they-needs-to-do-a-180/

Below is a pic of the 2021 BOD. I see a few female tokens and the rest are older white men.

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