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 discrimination. Show all posts

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 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 DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

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, March 25, 2022

IMPORTANT! Proposed Bill by Maxine Waters titled "Fair Act of 2022" - Meeting March 29, 2022

federal valuation agency,fair act of 2022,real estate appraiser,real estate,bill,financial services,maxine waters,firrea,HUD,mary cummins,US house committee,appraisal,discrimination,

Maxine Waters is proposing a new Bill to establish a new Federal agency to oversee appraisers and the appraisal industry. Maxine Waters wants to amend the The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to basically get rid of ASB, AQB, ASC and TAF as we know them replacing them with the new "Federal Valuation Agency." The basic summary is as follows:

"To establish an independent agency to be known as the Federal Valuation Agency and real estate valuation standards and appraiser criteria, including promoting a fair, unbiased, transparent, repeatable valuation process, and for other purposes."

"This Act may be cited as the ‘‘Fair Appraisal and Inequity Reform Act of 2022’’ or the ‘‘FAIR Act of 2022’’.

"The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is amended—(1) in section 1110(1) (12 U.S.C. 3339(1)), by striking ‘‘Appraisal Standards Board of the Appraisal Foundation’’ and inserting ‘‘Federal Valuation Agency, by rule’’; and (2) in section 1116 (12 U.S.C. 3345)—(A) in subsection (b), by striking ‘‘ or endorsed by the Appraiser Qualification Board of the Appraisal Foundation’’ and inserting ‘‘, by rule, by the Federal Valuation Agency’’;

This bill is frighteningly reckless and irrational. I can't believe I actually have supported Maxine Waters for so many years. I even fought and protected her against the person who campaigned against her and was viciously attacking her with falsehoods. I actually have been trying to meet with her because she's been posting things about appraisers and the industry which are totally false and bizarre. I spoke with her office twice but they wouldn't set a meeting. I sent an email politely correcting some of the bizarre and false things she said.

In the documents Maxine Waters repeatedly refers to Latinos as "Latinx." She even refers to "Latinx census." I'm a Latino. Most Latinos don't like being called "Latinx." The word is an English construct for naming "others." It makes no sense relative to Spanish. "Latinx" is not in the census records. This is insulting. Clearly a non-Latino wrote this Bill for Maxine Waters. (Ref. "Many Latinos say 'Latinx" Offends them." Ref. 2021 Gallup Poll 96% Latinos do not like Latinx )

I'll be writing a letter to the Committee and sending it tomorrow. You can write one and email it to FSCDems@mail.house.gov . Use any of this information. Copy/paste. I don't care. I will also be emailing everyone individually on the Committee. I'll post the letter and email addresses tomorrow. This bill is totally crazy.

Here is the letter I sent. https://drive.google.com/file/d/1wtQo0zjGcXu5TPxxsorHckrIBE7X4_V0/view?usp=sharing

Memorandum about meeting "Devalued, Denied, and Disrespected: How Home Appraisal Bias and Discrimination Are Hurting Homeowners and Communities of Color" US House Committee on Financial Services.

https://docs.house.gov/meetings/BA/BA00/20220329/114561/HHRG-117-BA00-20220329-SD002-U2.pdf

My comments on the falsities in this document in order. This was clearly written by someone with a personal agenda who intentionally did not use independent research or any legitimate research for that matter.

First some real facts. Whites make and have more money than blacks, Latinos. For this reason whites buy and own more expensive homes than blacks, Latinos. People buy what they can afford. For this reason homes owned by whites are worth more than homes owned by blacks, Latinos. This is the actual cause of the wealth gap. It has nothing to do with appraisers and appraisals. If the government wants to close the wealth gap between whites, blacks and Latinos, they need to close the income gap.

These two statements in the report are true. Currently, the "White homeownership rate is 74.1%, compared to 44.2% for Black families and 48.4% for Latinx families." "White families held 10 times more wealth than Black families and 7 times more than Latinx families in 2016." Waters intentionally doesn't include the cause of these gaps which is the difference in income. White families make almost double at $76,000 and black families only $45,000. When you are only making $45,000 a year there is no disposable income to save to buy a house. You are living hand to mouth. "The disparity is another reason why it's more difficult for Black families to save and build wealth than it is for White households." https://www.cnn.com/2021/06/01/politics/black-white-racial-wealth-gap/index.html If you can't save money to buy a house, you won't own one. You won't benefit from home appreciation if you don't own a house. If a poorer person does buy a house, it'll be a less expensive home appreciating at the lower rate and amount.

Appraisers do not appraise homes of certain types of people less than other people's homes. Appraising is a math formula. That's how the Automated Valuation Methods (AVMs) function. Appraisers use the same exact formula except we have better data because we actually inspect the subject property, neighborhood and see the sold comparables. AVMs don't see any of the properties. They don't even know if they exist.

Appraisers don't know the color, race, ethnicity ... of the neighborhood, owners/buyers of sold comparables and most of the time even the owner or buyer of the subject property. We don't have color, race, ethnicity ... info in our databases. We wouldn't use it if we did as it doesn't matter when it comes to home value. Buyers, sellers set market value. Appraisers just report it.

1. Background

A. Waters mischaracterized a paper written by Andre Perry, i.e. "The Devaluation of Assets in Black Neighborhoods: The Case of Residential Property." This paper is not published or peer reviewed "research." It is a personal paper written by Perry to promote his book by the same title. Perry intentionally chose two very different groups to compare. He compared small extremely different samples of areas with 0-1% black people and over 50% black people. Perry then used Zillow zestimate AVM values. We all know how inaccurate Zillow is based on their recent failures. No appraisers or appraisals were involved in the data. Perry committed major statistical areas in his analysis. He never controlled for location. Everyone knows the three main factors in real estate valuation are LOCATION, LOCATION, LOCATION. Many other grave statistical errors were committed. Perry has never posted his data because he doesn't want anyone to review it. The only thing the paper may show is the fact that whites make and have more money than blacks. This goes back to income equality. "Perry conflates race with socio-economic status. When adjusted for SES, the gaps disappear. (Ref. https://www.aei.org/research-products/report/comments-on-the-pave-report )(Ref. This articles shows other major errors in the paper. "

B. Waters misread a Freddie Mac study i.e. Freddie Mac, Racial and Ethnic Valuation Gaps in Home Purchase Appraisals. Freddie Mac actually stated "First, our analysis has not yet determined the full root cause of the gap." Danny Wiley of Freddie Mac stated "We have not reached any conclusion for cause of the gaps or correlation." The gap could have many causes such as revitalizing areas and condition. AVMs assume average condition, average everything. Perhaps the homes appraised by appraisers over AVM values were in better condition than average, better than average location, better than average view, upgrades... AVMs do not see the property. They don't know the condition or if it even exists.

AEI replied to Freddie Mac's study.

https://www.aei.org/research-products/report/aei-housing-center-critique-of-freddie-macs-note-on-racial-and-ethnic-valuation-gaps-in-home-purchase-appraisals/

2. Appraisers: Industry Diversity and Alternative Methodologies

Waters again selectively chooses information. While it's true that most appraisers are white the same is true for the US population as a whole and even real estate agents. The spotlight today is only real estate appraisers because of a very misleading paper promoted by Joe Biden, Marcia Fudge and now Maxine Waters.

3. Appraisals: Evidence of Racial Home Devaluation

A. Waters again mischaracterizes Perry's paper. This is a false interpretation of the skewed data. "A 2018 study by the Brookings Institute (Andre Perry) found that in the average metropolitan area, homes in neighborhoods where the share of the population is 50% Black are valued at roughly half the price as homes in neighborhoods with no Black residents. Further, the study found that differences in home and neighborhood quality do not fully explain the disparities in property values.23 Specifically, the study found that “homes of similar quality in neighborhoods with similar amenities are worth 23 percent less in majority black neighborhoods, compared to those with very few or no black residents” and “across all majority black neighborhoods, owner-occupied homes are undervalued by $48,000 per home on average, amounting to $156 billion in cumulative losses.”

Perry did not control for location which is the most important factor in home value. This is a case of correlation. Blacks make and have less money than whites so they buy less expensive homes in less expensive areas. The home values came from Zillow. Zillow states their zestimates are not appraisals or home valuations. No home was "undervalued" by any amount. There are no "losses."

B. Waters misstates the results of the Freddie Mac study. "Freddie Mac in 2021 analyzed what share of appraisers produced a significant Black-White and Latinx-White appraisal gap where homes in Black and Latinx census tracts are valued below the contract price compared to those in White census tracts." As stated above Freddie Mac stated they came to no conclusion for the cause of appraisal gaps. This article explains "appraisal gap." This was a comparison in appraisal gaps between two census tract areas and not different races, colors, ethnicities of the buyers, sellers, owners.

C. Waters misstates the results of the Fannie Mae study. "Fannie Mae found that White homes in both majority-White and majority-Black neighborhoods were overvalued compared against both AVMs while Black homes in each neighborhood type were devalued." Fannie Mae made it's own proprietary AVM and will not disclose their algorithm. There is no "overvalued" in the study. There is only over or under the AVM. AVMs are not accurate. They only consider the most average home in average condition. They do not include views, upgrades, location in a neighborhood, added amenities... This article explains the problems with AVMs. The most likely cause of the differences is again the income, wealth gap between white, black. Whites have more money and buy more expensive homes. They are most likely buying the more improved, upgraded homes with views in the same neighborhood as blacks.

D. Waters misstates the results of another study. "Federal Housing Finance Agency (FHFA) conducted a key word search for millions of appraisals for transactions backed by Fannie Mae and Freddie Mac and found that individual appraisers included overt references to race, ethnicity, and other prohibited bases under federal fair lending laws in their appraisal reports." From the actual report, "From millions of appraisals submitted annually, a keyword search resulted in thousands of potential race-related flags." That is 1,000/1,000,000 = .001% or 1/1,000th of 1%. This is a minuscule amount. While there should be no such references they did not say or show the references affected the value. One of the alleged race-related words was "gentrification" which the government itself and Maxine Waters use all the time. The correct term is "revitalization" which is a normal real estate cycle.

4. Industry Regulation

Appraisers and the appraisal industry are controlled by Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 about 33 years. ASC is a federal government agency which govern and control the industry. TAF is authorized by Congress as the source for appraisal standards and qualifications. ASB and ASQ are under TAF. Previously Maxine Waters incorrectly stated that the Appraisal Institute controls appraisers and the industry. I had tried to meet with Waters to correct this and many other false statements she's repeatedly made about appraisers and appraising. AI is a private non-profit organization which promotes the appraisal profession. It costs up to $15,000 to become an AI MAI appraiser. AI does not speak for all appraisers but a few. I am not a member.

Waters now wants to start a new federal agency to replace ASC, ASB, AQB and TAF because she doesn't understand how these agencies work. They have been working together since 1989. Now Waters wants to disrupt an entire industry to cater to her friends at the private non-profit Fair Housing Alliance.

5. Administrative Action

A. PAVE Task Force Report

The PAVE Task Force Report was just released.

https://mary--cummins.blogspot.com/2022/03/pave-task-force-action-plan-from-white.html

B. ASC report

The private non-profit Fair Housing Alliance released their report. They included false and mischaracterized information including Andre Perry's paper. Here is my reply.

https://mary--cummins.blogspot.com/2022/01/identifying-bias-and-barriers-promoting.html

C. DOJ Statement of Interest in case Austin v Miller

DOJ filed a Statement of Interest in the case. That case has been covered extensively in this article linked below. Per black Plaintiffs' Reply they wanted the white real estate appraiser to only use sold comparables from Mill Valley and Sausalito two "white" areas which are worth about twice as much as their home, area in a "black" area in Marin City. Mill Valley is over a mile away and has one of the best school systems in the state. Austins stated it's "racist" to use sold comparables from their own neighborhood because it's "black" just like they are. These are actual quotes from their legal filing. Appraisers must use the most similar homes in the same area by law. Home values are based on LOCATION, LOCATION, LOCATION. Every home owner would love to use Beverly Hills comps to appraise their home in South Los Angeles but you can't. I wanted to speak to Waters about her false misrepresentation of this case but Waters office would never set the meeting. I sent a letter which I will post later. Waters is clearly just listening to summaries by people with their own agenda.

https://mary--cummins.blogspot.com/2021/02/alleged-discrimination-home-appraisal.html

6. Legislative Proposal

This new agency is demanding to know the race, ethnicity, gender of all licensed appraisers. This information is not mandatory in California but the federal government will now demand it. AMCs will have to turn over the race, ethnicity and gender of all their appraisers.

On page nine it appears Maxine Waters wants actual appraisals and all information from appraisers publicly available online. Only personally identifiable information may be redacted like their name. Your home appraisal will be available with photos of the interior of your home, where your security system is located, how to break into your home, where you keep your valuables, where your safe is located, where your little kids sleep, what is the best way to break in and rob you, gun collections, religious items, family photos, where you keep your purse, home layout...?

It appears that appraisers race, ethnicity and gender information will be publicly available online as well.

Funding for fair housing testing must be provided. I will bet that the main Fair Housing nonprofit organizations National Fair Housing Alliance want money for their sting operations. The government will be funding non profits' personal agenda. They are also behind the false and frivolous alleged discrimination lawsuit Austin v Miller. They're asking for money in that lawsuit even though they were not a party to the transaction and there was no discrimination.

All state complaints must be referred to the federal government within 48 hours. The appraiser who is the subject of the complaint must hand over 24 months of appraisals of other people's homes in the investigation of any complaint. Invasion of privacy of other people. Can they get these docs in a FOIA request? Complaints must be resolved within 100 days.

If someone complains about an appraiser, the appraiser must give the borrower, owner the difference between their appraisal and another higher appraisal even if there were no damages or loss. Talk about undue influence to come in over market value. You know some borrowers will be getting their friends to make over market appraisals. What if the value is lower? The market may soon be changing. The person who doesn't like their appraisal now has up to five years to file a lawsuit against the appraiser instead of the usual 1-2 years statute of limitations.

Racism is a big problem in our country. Wasting time on issues which are not racism detracts from the real issues of racism.

Link to actual proposed new Bill.

https://docs.house.gov/meetings/BA/BA00/20220329/114561/BILLS-117pih-EndingAppraisalDiscriminationActof2022.pdf

Video of the meeting for new bill

https://financialservices.house.gov/events/eventsingle.aspx?EventID=409150

Proposed testimony for the meeting

https://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=114561

Peter Tobias of AEI sent in testimony "Faulty Evidence and Misdiagnosed Solutions."

https://docs.house.gov/meetings/BA/BA00/20220329/114561/HHRG-117-BA00-Wstate-PeterT-20220329.pdf

Mary Cummins

Wednesday, March 9, 2022

Some Lenders promoting false "racist appraiser" narrative to optimize profits via AVMs, by Mary Cummins real estate appraiser

mary cummins, real estate appraiser, los angeles, califoria, lender, amc, avm, hybrid appraisal, racism, bias, discrimination, bettermortgage, urban league, andre perry, house canary, zillow

Like most businesses lenders want to optimize their profits. One way to make more money besides charging more is to pay less in costs and fees. One way for the lender to do that is to pay the appraiser less or just get rid of them and use a free or very inexpensive Automated Valuation Method (AVM).

I personally don't care if a lender or borrower wants to use an AVM. There is enough business out there for appraisers because not all appraisals are for loans and not all government insured loans allow AVMs. They generally don't allow them in higher risk situations such as high loan to value (LTV) ratio, cash out, lower credit score ...

My only issue with the use of AVMs instead of a full inspection appraisal has to do with the borrower. The borrower could get a lower value, resulting smaller loan and pay more for that loan due to higher LTV ratio i.e. risk, if the property is better than average for the neighborhood. AVMs are biased against properties that are anything other than average in every respect.

AVMs assume average condition, location, view, quality... (Ref 1). If you're buying a better than average home for the area, higher quality, fully remodeled, in a better location in the neighborhood with a great view, the value will come in lower than true market value with an AVM. If you're buying a home priced less than most in the area in fair condition with no view or upgrades, an AVM will give you a higher value and a higher loan amount. You could end up upside down with no equity if you accept a higher loan.

My issue is with lenders and others who are using and promoting the false "racist white appraiser" narrative to market themselves and AVMs as less biased just to increase their profits. They are glomming onto misleading data and false media articles to use for their marketing purposes at the expense of the borrower and the reputation of appraisers. Yes, racist appraisers exist but not all valuations are based on racism and bias. Below are some quotes used by lenders and others to promote this false narrative.

House Canary. "HouseCanary hopes its tech can help solve appraisal bias."

https://www.housingwire.com/articles/housecanary-hopes-its-tech-can-help-solve-appraisal-bias-can-it/

Their true agenda shines through in the article, "While a typical appraisal could cost $400 to $500 and take several weeks, HouseCanary says it can perform a “condition-informed evaluation” within one to four days, for $100." Who cares if it costs the lender less. The lender doesn't pass on these savings to the borrower. The lender will charge any fee they think they can get. I've had borrowers contact me and ask why their appraisal was $1,100. I only got paid $350. They also asked about the $300 charge for a review appraisal. There was no review appraisal. I've bought and sold properties. I've found plenty of junk fees that would have gone to the lender. Even if a lender tells you there are no points, appraisal fees, you are paying it in the rate. Nothing is free except maybe the AVM at least for the lender.

An inaccuracy in the article, "There’s nothing about an appraiser that’s better than someone you’ve literally trained (to inspect, measure, take photos of a home) for a few days."

Appraisers bring years of experience to the table. I've appraised over 20,000 properties and have taken over 1,350 hours of education. We can see major defects and other things which would negatively affect value. Someone with only a few days of training will miss a cracked foundation, water damage in the basement or attic, uneven floors, tilting walls, mold, unpermitted addition, additions not done to code, additions that don't meet basic health and safety code for the city, county, state; missing safety features, area which is not ANSI legal gross living area GLA, evidence of a meth house, manufactured house verses stick built, effect of nearby power station, industrial properties, within 500 feet of a freeway, flight path, a skim coated floor to cover uneven floors, evidence of asbestos... A licensed appraiser would probably call for inspection by a licensed expert for major issues if they saw it. This could save a buyer hundreds of thousands of dollars down the line if they read a full inspection appraisal report. There's no inspection report to read in an AVM. If you had a hybrid appraisal with a non-appraiser inspecting it, you don't get an inspection report that could tell you more about the true condition. The appraiser hasn't seen the property, comparables or exact neighborhood in a hybrid appraisal.

Appraisers can also see items which add to value such as degree of view (180 degree ocean view, peek-a-boo canyon/tree view, view of the side of an apartment building), specific location in a tract development (on a hill, cul-de-sac, busy corner, near industrial), quality of construction, specific types of very good materials...

A typical appraisal generally doesn't take several weeks unless you're in some rural areas. This is another misnomer used to argue for cheaper AVMs. An AVM would still be faster unless you ordered a rush appraisal to be completed in 24-48 hours. A hybrid appraisal takes the same amount of time as a full appraisal. A wait of a few days for a full appraisal would be worth it to the buyer, borrower.

BetterMortgage. Better Mortgage uses race to sell loans and promote themselves as "diverse." "Several studies have shown that people tend to subconsciously associate with their own race more positively, and 96.5% of all real estate appraisers are white. Between 2015 and 2020, appraisal gaps came up at a rate of 15.4% for Latino-majority neighborhoods, and 12.5% in areas with a majority of Black homeowners.

If an appraiser’s evaluation feels off, don’t be afraid to get a second appraisal. It also helps to work with companies that are committed to diversifying their team. Starting next month, Better will be hiring and training a pipeline of 120 in-house appraisers who are representative of the communities they serve."

The numbers above came from a Freddie Mac study that compared appraisal values to ~~AVMs~~ appraised values and the contract price. (It was Fannie Mae who compared to their AVMs). In some areas the appraisal values were lower than Freddie Mac's own AVMs and contracts and in other areas they were higher. The Freddie Mac study stated they don't know the cause of the differences. "First, our analysis has not yet determined the full root cause of the gap." Danny Wiley of Freddie Mac stated "We have not reached any conclusion for cause of the gaps or correlation." The gap could have many causes such as revitalizing areas and condition. AVMs assume average condition, average everything. Perhaps the homes appraised by appraisers over AVM values were in better condition than average, better than average location, better than average view, upgrades...

BetterMortgage never hired or trained those diverse appraisers. They instead soon after the press release fired 900 people then 3,000 more. It was all talk to drum up business and investors.

https://better.com/content/what-you-should-know-about-home-appraisals/

Urban League. Urban League is not a lender but they have been promoting the same false narratives and the misleading paper because it supports their beliefs. Racism and bias exist but not all appraisers, appraisals are biased. "AVMs could correct for racial bias from appraisers evaluating homes and the conditions in majority-Black neighborhoods." "Automated valuation models, or AVMs, hold great promise for reducing the costs of and increasing the accuracy of home valuations. They allow financial institutions to estimate a home’s value with a reduced role for human opinion. By limiting the human element, estimating a home’s value should become less expensive and more accurate." "Many housing experts believed that widespread appraisal bias contributed to the housing crisis. In-person appraisals are susceptible to charges of racial discrimination and human bias."

Appraisal bias had nothing to do with the great recession. The great recession had to do with deregulation and a market bubble. Lenders offered no doc high risk loans to anyone and everyone. Some had low teaser rates which adjusted to high mortgage payments which people could not afford. After the bubble burst, values dumped and people let their homes go back to the bank. Appraisers get blamed for every financial crisis from the S&L crisis, great recession and now appraisal gaps. These issues have never been the fault of the appraiser. Appraisers don't make values. We merely report them as the messenger. We are just the usual scapegoat.

https://www.urban.org/sites/default/files/publication/103429/how-automated-valuation-models-can-disproportionately-affect-majority-black-neighborhoods_1.pdf

One important issue here is the alleged research upon which the "racist appraiser" narrative is based. It's just a personal paper written by Andre Perry. It was not published or peer reviewed independent research. The false summary of this paper is that most black owned homes are "appraised" for less than white owned homes by an average of $46,000 each. Appraisers and appraisals have allegedly "devalued," "stolen money" from black homeowners which is totally false.

This data was based on AVMs and not valuations by appraisers. There were no appraisers involved in the research yet people are stating this proves appraisers are racist. On top of this the data came from failed inaccurate Zillow. Everyone knows the "a" in "Zillow" stands for accuracy. Zillow is probably the least accurate AVM out there. The data actually just shows that people with less money buy and own homes which cost and are worth less than people with more money. They buy what they can afford. They never adjusted for home location or income, net worth of homeowner in the data. Research has shown that whites make and have more money than black people, POC. Income equality is the real issue which must be solved not appraisers and home valuations. Whites also buy more expensive cars. Did appraisers and Kelly Blue Book's online AVM "steal" money from cars owned by POC? No. They buy less expensive cars to begin with.

Today's political climate has clearly changed. "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. Some have even been weaponizing race and other issues for their own agenda.

The other misleading information about alleged "racist appraisers" comes from false media articles. One major one which finally made it to the courts is Austin v Miller. In this widely publicized media article and lawsuit the Plaintiffs argue that using similar homes which have sold in the same neighborhood as their home to value their home is "racist" and "biased." Austins wanted the appraiser to use comps "in the whiter areas" over a mile away instead of the "black area." These are exact quotes from the lawsuit linked above. Per law and the appraisal itself values are based on similar sales in the same neighborhood. The appraiser was not biased.

Here are a couple of other false and misleading case, Carlette Duffy in Indianapolis, Indiana and Cora Robinson in Oakland, California. Based on my research the second appraisals were incorrect and higher than market value. They used comps from superior areas much farther away from the subject.

Every appraisal value you don't like is not the result of a racist appraiser intentionally low balling you because of your race, color, ethnicity... Full inspection appraisals are not inherently racist or biased. AVMs are not racist but they are biased against any home other than an average home. Median and average home sold prices are built into the AVM formula, the algorithm.

Racism is very real. Some people are absolutely racist and express that in their behavior. We all must fight racism. Wasting time on a non-racist issues takes away from real issues of racism and bias. Using the false "racist biased appraiser" narrative to promote AVMs, hybrids to make money at the expense of other people is wrong.

I read the below article published the day after I wrote this article. People are noticing the anti-appraiser agenda. Jeremy Bagott of Appraiser Blogs, Certified General Real Estate Appraiser at Bender Rosenthal Inc., former newspaper man.

https://appraisersblogs.com/anti-appraiser-agenda-follow-the-money

References

Ref 1 Corelogic, "AVMs assume all properties are in similar average market value.condition. They cannot adjust values down for disrepair or damage. Similarly, they cannot adjust values up for good upkeep or cosmetic upgrades, such as new carpet or paint. The AVM has no knowledge of the condition of a particular property."

https://www.corelogic.com/wp-content/uploads/sites/4/downloadable-docs/about-automated-valuation-models.pdf

Mary Cummins

Sunday, January 23, 2022

Letter to Rob Hayes of ABC 7 News Los Angeles by Mary Cummins Real Estate Appraiser

Rob Hayes, ABC News 7, @abc7 #abc7n@abc7robhayes, robhayes, Robert Hayes, Bias in Home Appraisals, Eyewitness News, Mary Cummins, real estate appraiser, los angeles, california, discrimination, appraisal gap, appraisal institute, national fair housing alliance, nonprofit, poc, race, people of color, white, brown, black, asian, latino

I just saw there was an actual article about this here.

https://abc7.com/racial-disparities-in-home-appraisals-bias-discrimination-diversity/11496088/

No response to the email. Many other appraisers sent emails and responded to the article online. No response. This proves these "journalists" knowingly spread this false narrative to get traffic and clicks to sell advertising. It's not about reporting the real news or facts. It's about sensationalist news. In this case it's false claims of bias and discrimination which further divides our nation and people. There is enough real racism, bias and discrimination in our nation that we don't need to invent it. People should be fighting real cases of racism. How about dealing with the root cause of the white black brown wealth gap? It's income. How about helping POC make more money? That would allow them to buy and own more expensive homes and have the same amount of money as white people.

Email to Rob Hayes of ABC News 7

I'm a female Latino Appraiser in Los Angeles with over 38 years of experience. There were some inaccurate statements in your news segment this morning about "Bias in Home Appraisals."

The National Fair Housing Alliance ( https://nationalfairhousing.org ) you cite is a private non-profit organization. Their recent 84 page "report" is based on false and misleading data. It was not a research report. I wrote an article about the major errors here.

https://mary--cummins.blogspot.com/2022/01/identifying-bias-and-barriers-promoting.html

The biggest flaw is that the report is not based on "multiple studies." None of the "studies' were independent peer reviewed and published research. They were all papers written by individuals and groups with agendas. I will illustrate just one issue in that report i.e., "appraisal gap."

There will always be an appraisal gap in areas which are appreciating quickly due to the historical nature of appraisals. Per government regulations Appraisers must use closed sales. Closed sales will always lag behind current contract prices by two to three months. Home values have appreciated during that time causing a gap.

Values have been appreciating quickly in the last few years. The faster the appreciation rate the larger the gap. Lower valued areas which generally have more POC which are revitalizing or what some call "gentrifying" will appreciate at a faster rate than the market as a whole. That is why there are greater appraisal gaps in those areas. I wrote an article about this issue here https://mary--cummins.blogspot.com/2021/11/appraisal-gap-what-is-appraisal-gap-and.html NFHA knows this but they promote the false narrative to create a racial discrimination issue so they can increase donations to their organization. The more outrageous the story the more donations they receive.

It is difficult for anyone of any color to become an Appraiser today because of the trainee/mentor program. It has nothing to do with race but the program itself. Yes, I wrote an article about that as well here https://mary--cummins.blogspot.com/2021/06/difficulties-becoming-real-estate.html They are currently working to modify the program.

Most importantly the Appraisal Institute ( https://www.appraisalinstitute.org ) is NOT the governing body of appraisers. AI is a private nonprofit just like NFHA. Appraisers are governed by multiple state and federal government agencies. Another article which explains it. https://mary--cummins.blogspot.com/2021/08/who-oversees-regulates-real-estate.html

AI's board is 100% white and mainly male. It costs $15,000 to become an AI MAI Appraiser. Their members are by far more white and male than regular Appraisers due to the positive correlation between higher income and being white and male. I asked them about their scholarships for women and Latinos. They said I would have to pay to become a member then I could apply with no guarantees of actually getting a scholarship. There is no scholarship for membership fees. That's not really a scholarship offer.

Another misleading issue is the "accuracy" of the Zillow Automated Valuation Method (AVM). Zillow itself states their values are not appraisals and should not be used for valuation purposes. They recently admitted their AVMs are highly inaccurate when they closed down their ibuying department because they over valued homes they bought and had to sell them for less than what they paid. All Appraisers know the "a" in "Zillow" stands for "accuracy."

Perhaps the next time you do a segment on Appraisers and appraisals you should interview a local experienced Appraiser instead of just relying on inaccurate information on the internet. You are helping others promote the false narrative of the "racist white Appraiser." The four main articles about "racist Appraisers" have been debunked yet they are still promoted. I researched and wrote articles about those cases which are in the blog above.

Sincerely,
Mary Cummins
http://www.marycummins.com
http://www.facebook.com/cumminsrealestateservices

Mark Alston was quoted in the article but not the video, "Mark Alston said the report will be an "invaluable tool in trying to offset the damage done by the wealth stripping activity of undervalued appraisals in communities of color and especially in Black neighborhoods."

There has been no "wealth stripping" of anyone except the Native Americans who owned this land originally. Appraisers appraise homes based on what similar homes in the same area have sold for. That is the law. We don't use the price of sold homes in Beverly Hills to appraise homes in South Los Angeles and vice versa. That is a federal regulation to use the most similar sold home comparables.

There is a confirmed correlation between people of color and lower incomes. It's also a fact that women earn less than men doing the same job. Women of color earn even less than men of color or whites. People who make less money have less money. They tend to buy homes which cost less because that is what they can afford. For this reason there is a correlation between POC and lower priced homes.They also own cars that cost less money than white people especially white men. That does not mean that wealth has been "stripped" from them. If people want to close the wealth gap, they need to close the income gap. Help these people make more money. Don't go blaming real estate appraisers for appraising their homes for less than homes in more expensive areas. Remember, the three main factors in home valuation are location, location, location.

Mark Alston is the President of NAREB which is the "National Association of Real Estate Brokers, Inc. (NAREB) was founded in Tampa, Florida, in 1947 as an equal opportunity and civil rights advocacy organization for African American real estate professionals, consumers, and communities in America." That is where Alston is coming from in this article.

http://www.Facebook.com/abc7robhayes

http://www.Twitter.com/abc7robhayes

http://www.Instagram.com/abc7robhayes

@itslisarice @natfairhouse

Mary Cummins

Wednesday, January 19, 2022

PAVE Task Force Report Coming February 2022, by Mary Cummins Real Estate Appraiser

False and misleading. "The Interagency Task Force on Property Appraisal and Valuation Equity. An equitable path toward addressing the persistent misvaluation and undervaluation of properties experienced by families and communities of color." pave, task force, mary cummins, real estate appraiser, los angeles, california,

The image above came from the PAVE Task Force website at https://pave.hud.gov . Their statement "the persistent misvaluation and undervaluation of properties experienced by families and communities of color" is very misleading. "Misvaluation" and "undervaluation" have not been proven. There hasn't even been any independent research on the issues. Andre Perry's non peer reviewed, non published personal paper has been shown to have major statistical flaws intentionally made by Andre Perry for his agenda in promoting his book for money. Fannie Mae's research showed there was no major difference in appraisal gap based on the race of the borrower.

Per the National Association of Realtors (NAR) the Task Force report is coming out February 2022. It will be interesting to read the final report. With statements like the above they clearly have an agenda. If you remember, this was Joe Biden's campaign platform. Here's an article I wrote about Joe Biden's false statements about appraisals and appraisers. Team Biden basically invented a problem that didn't exist so they could promise to fix it just so they could get the vote of POC. I'm a Democrat. I understand politics and campaigning but this is just plain wrong to vilify people and a profession for your own agenda.

Here's an article I wrote about the purpose of the Task Force. It lists all the members of the Task Force. Again I'd like to note that James Park of the Appraisal Subcommittee (ASC) is the only Appraiser on the Task Force. He doesn't represent Appraisers but the ASC.

There are some things which should be changed such as the requirements to become an appraiser. The apprentice mentor program is not working. It's too difficult for apprentices and mentors.

It will be interesting to see the final report. I predict it will basically suggest regulations and actions which are similar to our current regulations but worded as if they are new.

Mary Cummins

Saturday, November 6, 2021

Why Real Estate Appraisers Blur Photos in Appraisals by Mary Cummins Real Estate Appraiser

"A former Green Beret and one-time congressional candidate arrested last month for his alleged participation in the Capitol riot was illegally stockpiling explosives prior to being jailed on charges related to the Jan. 6 pro-Trump siege, according to an FBI search warrant filed Friday in Washington, D.C. federal court. When federal agents searched 47-year-old Jeremy Brown’s Florida home in October, they reported finding a short-barrel rifle, a sawed-off shotgun, more than 8,000 rounds of ammunition, and two hand grenades. But it was a picture included in a sales listing for his house on Zillow that led to his latest troubles. In a photo from “what appears to be Brown’s office,” FBI agents spotted a whiteboard with columns labeled “Food,” “Clothing,” “Shelter,” “Currency,” “Communicate,” “Move,” and “Shoot,” the warrant states. In the “shoot” column, it continues, “there are numerous firearms listed and explosive devices such as ‘flash bangs.’” The entry on the whiteboard indicated that Brown had the flash bangs “on hand,” the filing says, adding that Brown “is not registered to possess explosive devices.” "

In this case a real estate agent or maybe just a photographer did not blur any photos or remove items in the listing of a home for sale on Zillow. This was not for an appraisal or loan. While real estate agents cannot discriminate I don't believe Zillow or the agent have a responsibility to blur out images of personal items in listing photos so others can't discriminate. I do know that real estate agents generally tell all of their clients to remove all items of a personal nature especially photos for the listing photos and showings if not until the home is sold. This is for staging purposes so the buyer can envision themselves in a clean and less cluttered home so the home will sell more quickly and for a higher price.

Appraisers on the other hand have to blur out photos of all people and personal items. We blur out people in photos, people in paintings, any religious items, personal collections such as gun collections, yard signs, political signs and other items of a personal nature in the home.

I would have blurred out the guns but probably not the list of items on the wall because I wouldn't have noticed it. I don't really look at personal items when I'm appraising as I'm concentrating on the structure. I only notice the photos when I'm writing the report and adding the photos. Then I intentionally look for anything personal so I can blur it. I would assume that someone would hide something they really, really don't want anyone to see in their home before they enter. I'm assuming the guy just didn't realize people would know who he was and put two and two together.

The purpose of blurring images of all people, religious items ... is so no one can say that the lender's decision to loan or not to loan was based on discrimination based on race, color, sex, religion, national origin, marital status.... Appraisers are also not allowed to discriminate against the home owner, borrower, or state anything that might be considered discriminatory in the appraisal report. There is no law that states Appraisers have to remove or blur these items. It's the lender instructions to the Appraiser. Obviously we see the images and items and sometimes people in person so blurring them from photos won't remove them from our memory.

I found this regulation about discrimination in relation to lenders. The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction. It's based on Fair Lending Laws and Regulations per the Fair Housing Act. The link below goes into more detail about fair lending and discrimination.

https://www.fdic.gov/resources/supervision-and-examinations/consumer-compliance-examination-manual/documents/4/iv-1-1.pdf

The reason for blurring the photos is because the lender does not want a discrimination complaint or lawsuit even a frivolous one. If the lender is a bank it's even more important. Banks have to comply with many complex regulations related to non-discrimination of borrowers. They must have so many branches in areas which are predominantly low income and of color if they want to operate a bank even if the branches lose money. One complaint even a frivolous could harm the bank's legal standing as a bank and it's reputation and business.

The alleged January 6 rioter appears to be a not too bright criminal. I've found people who believe in conspiracy theories such as the "stolen" 2020 election, Pizzagate, JFK is still alive, are not the sharpest tools in the shed. They lack critical thinking and common sense which is a shame for everyone.

Mary Cummins

Friday, October 8, 2021

How to Avoid Being Accused of Bias in Real Estate Appraisal - Free Webinar by George Dell, Peter Christensen ... by Mary Cummins

how to avoid being accused of bias in real estate appraisal, bias, discrimination, real estate appraisal, real estate appraiser, mary cummins, los angeles, california, brea, fha, hud

how to avoid being accused of bias in real estate appraisal by George Dell, Peter Christensen, bias, discrimination, real estate appraisal, real estate appraiser, mary cummins, los angeles, california, brea, fha, hud

I attended the free webinar by real estate appraiser/instructor George Dell and lawyer Peter Christensen. Other speakers were appraiser Craig Gilbert who spoke about the new California bill AB 948 and Dave Towne.

It was very informative and based on common sense. The main takeaway was choose appropriate comps/data, include an explanation on why you chose the comps you chose, save a copy of your search parameters and results to your work file, and fully explain and describe your adjustments and the values in a bullet-proof report.

I'd like to add some other suggestions. Even though the intended users of the appraisal report are savvy, educated, experienced finance professionals write your report so that an average lay person with an average education can easily understand everything. The buyer, seller, borrower, agent, their cousin, all their social media friends ... will be reading the report. If they don't like or understand anything about it, they will be attacking the appraiser on social media, to the real media and leaving negative business reviews all over the internet. They may even file a frivolous complaint just because they don't understand something. A woman said an appraiser wrote "Marin city" for the city in the report. She said it was "code for black." The property legally was in Marin City. It wasn't code for anything. Not my appraisal. That's how sensitive this issue can be.

For instance state that per government guidelines the appraiser must first search sold, pending, active comparable properties +/- 15% difference in GLA (gross living area) from the subject, within 1/2 mile radius, within the last three to six months with similar amenities and in similar condition. If you can't find enough comps and have to widen your search, state specifically why and how you did that. State that you need at least three sold, one pending and one listed comp, if you do. Cite USPAP, FHA and government regulations that govern our appraisals.

If the GLA, bed/bath/room count differ from the actual size, state what is included in GLA per ANSI and permits. State what is not legal GLA in the home and why. I even include links to ANSI, government guidelines ... beyond what is in our limiting conditions. Some people think they are being "ripped off" because the Appraiser didn't give credit to the unpermitted elevated toilet they added in the garage or the closet/balcony/patio/carport/shed they illegally converted into a bedroom that would never meet code or basic safety requirements.

If they added what they feel are lots of improvements or additions that don't add real value to the home, specifically tell them why. Go into the math of return on investment, over improvement, under improvement, market reaction to improvements... I had a guy tell me he spent $150,000 adding palm trees to his back yard 20 years ago. He asked me why I didn't add $150,000 to the value of his $400,000 home. I told him specifically why it didn't add any value to the home.

Sometimes lay people just don't understand the form. One person thought pg 1, "Improvements," "Condition of property" section had to do with the condition of the entire house even though it ONLY relates to the kitchen and bathrooms. The reader can't see the drop down menu items which state "kitchen," "bath." They only see the result which could be "no improvements within the last seven years." I added an explanation right in that section so people know what it is.

Specifically describe each of the comps relative to the items in the grid. If there is an adjustment for any item, describe what it's for and how it was calculated. Readers don't realize that we use advanced math, regression analysis and statistics to formulate our adjustments based on lots of independent data from the various MLS and public records. It is probably a good idea to ever so briefly mention the appraisal theory of matched pairs analysis so they will understand the reason for the comps and grid. A brief mention of regression analysis would help so they can understand how we figure out the exact adjustments. Add charts from your xml spreadsheets to the report if needed. Like your math teacher used to tell you "show your work." Save all of your adjustment calculations, xmls, charts to your work file.

Your summary of the market comparison approach needs to be very clear and plain. Specifically state which comps set the upper, lower levels of value and why. Which comps carry the most weight and why. If you feel the property could be worth more but there just are no recent closed sold comps to support that value, state that. Sometimes it's best for a homeowner to wait until a similar home closes for a higher value in a week such as one of the higher listed or pending comps. People don't realize that we are generally limited by the highest recent closed sale. Even if our report were to come in higher, the AMC, underwriter, lender would send it back stating that it can't be higher than the highest closed sale. That has been happening a lot lately.

A few last pointers. Of course never discriminate against anyone even if the homeowner treats you horribly. If a homeowner is instantly very rude and attacks you when you arrive or during the inspection, just leave and cancel the appraisal. Get your research and trip fee and be done with it. It's not worth the headache. This has only happened to me a few times in 35 years.

If things start to get iffy during the inspection but not to the point of leaving, take notes instantly. If they tell you what they think the property is worth, tell you a home a mile away sold for $1.2M, what value they need for their loan, how a recent "stupid" appraiser didn't know the area, recent appraisals came in too low, that they added $$$ worth of "improvements and upgrades"...instantly take notes of everything they are saying and doing. I do this on my iPhone note feature. I always ask if they've done improvements during the inspection. I tell them they can give, send me a list of the alleged improvements if they like. If they, the agent, whomever hand you comps, take them. You don't have to use them but it's good to see where their mind and reasoning is at so you know what you have to deal with. Once in a great while they may even give you a good comp.

If the appraisal is for a purchase, search for comps before you accept the assignment. If you can't find any comps to support the contract price, don't take the assignment. Save everyone a big headache especially yourself. If it's a refinance, look at the current loan amount and figure out loan to value ratio. If their current loan is $1,000,000 but the home is only worth $900,000, you may have a problem which could be avoided before you accept or complete the appraisal. Better not to complete the appraisal then no one can file a complaint for biased appraising.

Always be very polite, on time, look and act professional, be kind and answer their questions. If they request a Reconsideration of Value i.e., an appraisal appeal, be very thorough, kind and polite in your reply. Don't ever just reply with "no change." Supposedly this is the biggest reason people file a report for discrimination. Specifically state why you could not use the comps they provided going back to the government guidelines and underwriting limitations. Reply to each of their concerns in layman terms.

If they give you good comps, use them and change your value. Very rarely you may not see a sold comp because it recorded the day of or after your inspection but you pulled comps the night before the inspection. Sometimes sold comps record days before they show up in public records. Feel free to call the agent of pending comps or even call title to see if they closed. With this crazy super quickly appreciating recent market the most recent comps are the best representation of the market.

One very important last suggestion. Many people especially people of color, immigrants, people of different religions, sexual orientation, languages ... have been discriminated against for their entire lives. They may always be on the defensive. Their first thought might automatically just be "it must be discrimination!" Even though it's upsetting to be falsely accused of discrimination don't get upset or defensive. Respond politely and kindly to their ROV requests. Be understanding and thorough in your reply. Pretend you are talking to your sweet old grandmother who just doesn't understand all of the advanced math and statistics. Break it down into simple and plain language they understand. That could be the difference between having a calm conversation or a frivolous complaint filed against your license and business.

If after you've responded politely and thoroughly someone still files a false or frivolous discrimination complaint against you, you need to take action. Obviously these false discrimination complaints are only coming in now when the appraised value is under contract or the unsupported expectation of the borrower, seller, buyer... No one complains if you come in at contract or above. In prior years with quickly appreciating crazy markets they just called us "deal killers" but now partly because of the current political climate they call it "discrimination."

I hate coming in under contract because you know there will be a lot of stress and strife which is why I try to avoid those appraisals if at all possible. If they only filed the complaint with the lender or AMC, your reply to the ROV is your basic reply. No one has ever filed any complaint against me for anything even though I have had a handful of people in 35 years who weren't happy with the value. I replied via the ROV.

I personally would reply to a discrimination complaint. What did they state that you did or said that was discriminatory? State exactly everything that happened on the phone, in email, text, voicemail, at the inspection... Always save all of this to protect yourself. If you feel they are trying to influence the value with the threat of complaint, actual complaint, instantly notify the AMC and lender of this fact. Per the Appraiser Independence Laws "it is unlawful for any person in the course of a mortgage transaction to improperly influence the development, report, result, or review of a real estate appraisal sought in connection with a mortgage loan." Each state has their own laws. California law Article 7 CIVIL CODE SECTION 1090.5 . Here are the laws for each state from the Appraisal Institute.

It's also a violation of Federal law 15 U.S. Code § 1639e - Appraisal independence requirements. If the lender is notified that they tried to influence the value, they will not get a home loan, i.e. "It shall be unlawful, in extending credit or in providing any services for a consumer credit transaction secured by the principal dwelling of the consumer, to engage in any act or practice that violates appraisal independence." I would try all other means of resolving the situation before you make such a complaint as the outcome would not be good for anyone. Talk to the AMC who can talk to the lender who can talk to the client and explain the regulations in detail.

If they file a false or frivolous complaint to a government agency such as you state licensing board or HUD, contact your E&O insurance and a lawyer. In order to prove discrimination or bias, they MUST show evidence and prove that you intentionally discriminated against them in the appraisal. They must show that you appraised their home vastly differently than any home you've appraised in the past based on discrimination. They must show you perhaps violated USPAP, pulled the wrong comps, refused to look at better data they sent to you... They would have to show more than just mistakes or say poor judgment in the selection of comps. They must show evidence of "intent to discriminate" and "discriminatory behavior." I don't know if any individual appraiser has ever been found to have discriminated against anyone in an appraisal report in a lawsuit or formal government complaint more recently. I'll keep searching. I'm sure lenders, banks, agents have definitely discriminated against people in the farther past. I know some AMCs, lenders have settled some cases without admitting any guilt such as the recent Chase case. You don't need to prove as much evidence with lenders. Chase still stands by the appraisal. They settled to avoid litigation costs and bad press.

In summary, always do the most thorough and best appraisal possible. Pick the most similar comps and let them do your work for you. Save all of your work, notes, emails, voicemails, texts, photos, sketches, math, charts, xml files... to your work file. Explain everything in layman's terms assuming regular non finance people will be reading the report. Be polite, kind and understanding with everyone. Treat them like your grandmother. Always thoroughly reply to any ROVs. That appears to be one of the main causes of discrimination complaints. If they give you a better comp, other better data, use it and change the value if the new data or comp supports it. Most importantly, never discriminate against anyone ever for any reason. Discrimination, racism, sexism... is hateful and harms everyone and our society.

From the class information page.

"Save the DATE!

Join us on Friday October 8th at 12 Noon Pacific Time for a free 1.5-hour webinar on

How to Avoid Being Accused of Bias

This is NOT a hands-on class. No Continuing Education credit will be offered.

We emphasize underlying principles and logic."

"About George Dell: About George Dell and Valuemetrics.Info

George Dell, SRA, MAI, ASA, CRE, LAI, of San Diego, CA, is the creator and developer of Evidence-Based Valuation (EBV©) which optimizes computer algorithms with trained valuation judgment.

His signature workshop, Stats, Graphs and Data Science1 initiates new appraiser products and services – by combining appraiser expertise with data science tools and critical thinking skills. It has been presented to various appraiser groups and professional organizations. For more information, check out Valuemetrics.info for upcoming classes.

Mr. Dell has been published multiple times in The Appraisal Journal, and other publications. His most recent articles include, “Common Statistical Errors and Mistakes” in 2013 Fall Edition, “Regression, Critical Thinking, and the Valuation Problem Today” in the 2017 Summer Edition, the Feature article in Appraisal Buzz, September 2019, "Red Door, Blue Door, Doggie Door Value" and many articles in Ann O'Rourke's paid newsletter, Appraisal Today.

George Dell’s free weekly blog raises often-controversial (but forward looking) issues. He is the editor and author of The Asset Analyst Report (TAAR)©. The EBV curriculum -- for appraisers and credit analysts -- is taught through Valuemetrics.info.

About Peter Christensen,

Attorney & Principal at ValuationLegal.com

Peter is member of the California and Washington state bars, as well as a licensed insurance broker. After earning his BS and JD degrees at U.C. Berkeley, he began his career at Latham & Watkins LLP. He later served as general counsel to the largest provider of professional liability insurance to appraisers and valuation businesses. He’s based near Santa Barbara, California, but enjoys traveling the country to meet with professionals and firms, and he’s has made it to 48 states so far."

Mary Cummins

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

Monday, May 2, 2022

Friday, March 25, 2022

Wednesday, March 9, 2022

Sunday, January 23, 2022

Wednesday, January 19, 2022

Saturday, November 6, 2021

Friday, October 8, 2021