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

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
WEBSITE       RESUME       CONTACT       FACEBOOK        LINKEDIN       

Tuesday, March 29, 2022

March 29, 2022 Hearing "Devalued, Denied, Disrespected: How Home Appraisal ... by Mary Cummins

Devalued, Denied, and Disrespected: How Home Appraisal Bias and Discrimination Are Hurting Homeowners and Communities of Color, Maxine Waters, Mary Cummins, Tobias Peter, AIE, Fannie Mae, Freddie Mac, Andre Perry, PAVE Task Force, Committee on Financial Services, bias, racism


"Devalued, Denied, and Disrespected: How Home Appraisal Bias and Discrimination Are Hurting Homeowners and Communities of Color." Tobias Peter is doing a great job hammering home facts and actual research. Sadly some politicians are ignoring the facts and running with the fake research and misleading analysis by Andre Perry, Freddie Mac and Fannie Mae cited in the PAVE report. So is private activist group Fair Housing Alliance. It's clear they know they are hurting blacks, Latinos, poor people and single mothers with their actions. Government actions based on the false research is causing financial damage to poor people. Beyond sad and heartbreaking. Appraisers see the results of this. I appraised pre-foreclosure, foreclosure homes during the great recession. 

I'm taking notes best I can as I'm sick from a vaccination. Pics from the meeting which ran 10:00 a.m to 1:30 p.m. I'll post more later. Video below.

One thing which is abundantly clear is that some of the Representatives don't even know who some of the speakers are. They keep asking private AMC Dean Kelker why he/they don't recruit people in college to automatically be appraisers. He keeps saying they need a license and experience. They think he is part of the government oversight of the industry when he's not.

Maxine Waters is also losing her judgment. She thinks "Realtists" which are just members of the minority organization National Association of Real Estate Brokers should be allowed to be "assessors," think she means appraisers, with no education, license or experience whatsoever. It would be discrimination to allow only this specific group to be appraisers automatically. It also makes no sense and would violate federal and state laws yet she says she's going to do it.

Lisa Rice from the private organization the Fair Housing Alliance keeps citing Andre Perry's false and misleading paper like the bible. She knows it's false yet she uses it to promote her personal agenda which is funds, grants for her nonprofit. She doesn't care that she's hurting poor people and POC. 

Pledger Bishop of the private organization Appraisal Institute AI is being political. He keeps saying we're working on diversity yet he has nothing to show for it. Representatives keep thinking he's part of government. He's not. He has no power to do anything. 

Many Representatives just get up there and use their five minutes to promote themselves and their political campaigns. Many cite Andre Perry's false and misleading paper even though they've been given Tobias Peter's AEI report showing the actual facts. Home values are directly related to income. Certain socio-economic factors correlate with buying power such as income, credit score, marital status, having children under 18... As I've been saying people buy the homes they can afford in the areas they can afford. Appraisers, Appraisals don't set values. The market does.We merely report it.We most certainly do not devalue homes. AEI's report shows that appraiser bias, discrimination is not a wide spread or systemic issue. Home value is a math formula. 

Pledger Bishop, The Appraisal Institute, AI


Tobias Peter, AEI, American Enterprise Institute, PAVE report, research, Andre Perry paper debunked


Video 3 hours 31 minutes starts at 4 min 30 seconds

https://www.youtube.com/watch?v=vFMs5sTOHhc

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

Monday, March 28, 2022

Significance of Maxine Waters' Bill Fair Appraisal Act 2022 by Mary Cummins Real Estate Appraiser




Maxine Water's bill is about more than discrimination. It's also about the complaint process and changing the appraisal regulatory system. The Bill would remove states as the investigatory authority and turns it over to the federal government. If a complaint is filed, the federal government can ask for 24 months of all the appraiser's appraisals. Even HUD complaints only ask for 12 months. This is clearly huge pressure to meet contract price for the borrower even though we appraisers work for the lender. 

ASC stated that TAF isn't accountable to the public. All proposed changes to Standards and Qualifications are public and open for comment. TAF answers questions from appraisers and others for clarification. They are transparent and available.

Based on the Bill ASC will be given new powers and responsibilities when they have a limited track record. For the past six years ASC was supposed to make a national list of all appraisers giving them a unique number. They have received millions of dollars to help accomplish this task yet have never done it. Some appraisers have licenses in more than one state so you can't just add up all of the state licensees. AMCs pay a fee to ASC for each appraiser on their roster. Some appraisers are on more than one roster. ASC has received millions yet has not compiled the list. It makes no sense to give them even more power and responsibility.

It's important to know how many appraisers there are because of the current arguments stating there are not enough appraisers. Most feel the shortage of appraisers is actually just a shortage of appraisers who are licensed and willing to do appraisals for lending purposes. Many don't do lender work anymore because of all the new legislation and layers of extra work.

ASC has also failed to track the national complaint hotline. Now Waters wants the ASC to be in charge of investigating 24 months of appraisals in complaints. If ASC can't do the former, they clearly can't do the later. The Dodd Frank Act put ASC in charge of developing AVM standards yet ASC has not done this within the last 12 years. There is no reason to give ASC more responsibilities when they can't even handle their current responsibilities. 

Jim Park of ASC stated in congressional testimony last Thursday in front of the US Senate that Appraisers had “…driven up service times and appraisal fees to unacceptable levels….” top of page 3 https://www.banking.senate.gov/imo/media/doc/Park%20Testimony%203-24-22.pdf 

This is false. As an appraiser I received $300 for an appraisal in 1984. 1990 it was $350. It's still just about the same amount over 30 years later. Because of the Dodd Frank Act AMCs were mandated to be the middle man between lenders and appraisers. They raised the fees and now take a huge chunk. The AMC receives about $650-$1,800 and pays the appraiser about $350. The AMCs charge whatever they like then make appraisers bid for the assignment. They take the lowest bid and pocket the rest as profit. Dodd Frank mandated AMCs is the reason why fees are higher today. The fees paid to the appraiser have not kept up with inflation even though the amount of work required today is at least twice as much. 

Mr. Park made a discriminatory, ageist statement when stating old appraisers are hard to teach new information. I'm 55 and I always instantly embrace all new technology. I used one of the first laser measuring devices in the 1980's. I use LiDAR today. I ditched the typewriter and paper forms for computer software before any other appraiser I know. I had one of the first real estate websites on the internet in 1997. I had one of the first digital cameras. I use mobile appraisal software. I've tested the new 3D home interior scanners. I made my own computer program to pull MLS data in 1004 format in the '90's. Appraisers love new technology because it can make our job faster and better. We teach ourselves new tricks. 

HUD themselves are responsible for a shortage in the number of appraisers who can complete mortgage lending appraisals. After passage of the Housing and Economic Recovery Act of 2008 (HERA), the Dept of Housing and Urban Development no longer permitted the “Licensed” category of real estate appraisers to conduct appraisals, instead only the “Certified” category of real estate appraisers could complete appraisals for the FHA Insurance program. Before HERA passed, there were 30,286 Licensed Appraisers. Today, there are only 7,321 Licensed Appraisers, because the majority of lenders moved away from hiring Licensed Appraisers after HERA was passed.

HUD has never released documentation showing the number of alleged discrimination complaints against appraisers. Why is the cause of the lack of transparency? They claim to record every complaint they receive. They even release annual reports. Those annual reports have not noted instances of discriminatory appraisals. Why are they not disclosing discrimination complaints? It is likely because, up until last year, the number of complaints has been too few and likely dismissed. It is reported they have roughly 100 allegations currently, none of which have been resolved in the mandatory 100 days. Why are they holding on to the cases?

I was forced to send in multiple FOIA requests to get the results of investigations which I'm following here on my blog, i.e Austin v Miller in Marin, California; Carlette Duffy in Indianapolis, Indiana, Sanders Horton in Jacksonville, Florida and Cora Robinson in Oakland, California. This is the standard reply to my requests. They state I must get the complainant to sign a notarized statement with their name, date of birth, nation of origin, home address ... stating they agree to the release of the documents and information. Of course they will say no. I've been making FOIA requests for over 25 years and have never had a reply like this ever. Some appraisers and I are now contemplating fundraising to hire an attorney to sue HUD to get the results of the legitimate FOIA requests. In the meantime I appealed the FOIA denials. HUD also is the first agency to ever force me to make multiple initial FOIA requests for the same information. This is unprecedented lack of transparency and a violation of the FOIA. 

The ASC study was actually made by the advocacy group the National Fair Housing Alliance NFHA. They are a private non-profit organization. They were given $250,000 to study the Standards and Qualifications for appraisers. Instead their report is on the appraisal regulatory structure and TAF's authority. The ASC is responsible for monitoring the states and their enforcement procedures. TAF sets the standards and qualifications. Blaming TAF for ASC's failure of enforcement mechanisms makes absolutely no sense. 

No member of the ASB or the AQB was contacted or interviewed for the new Bill. There are errors in the report that Jim Park (ASC) would know are obviously incorrect, yet he let the study be published to support his narrative. The NFHA Advocates who authored the study indicated they had insufficient time to complete extensive research for this study, yet were able to draw conclusions, nonetheless.

All major legislation passed that affects appraisers has had a significant negative consequence to appraisers and the appraiser’s business. The appraiser community has not had a voice at the table to provide expertise about the valuation profession. I contacted every member of the PAVE Task Force asking to be involved, to attend meetings, to receive documents and communications as a Latino woman appraiser with over 35 year of experience. I didn't even get a reply. I was blocked from even being informed about what was happening. I'm now forced to send in another FOIA request just to get public information which should have been released.

While Jim Park was an appraiser he's not actively appraising today. He has no idea what appraisers deal with on a daily basis. Prior to the Dodd Frank legislation, there were appraisers willing to function as supervisors and the trainee/supervisor model was functioning, After Dodd Frank, most appraisers had to shut down their small businesses and become individual single-owner shops. Lenders, after Dodd Frank, largely stopped allowing trainee appraisers to inspect the property without the supervisor present, yet lenders will gladly hire third-party non-appraisers to collect data on the property. The lenders do not allow the trainee model to add value to an appraisers’ work. You cannot blame the appraisers for a system that does not allow a new generation of appraisers to be trained.

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

Sunday, March 27, 2022

AEI reply to Freddie Mac's misleading study, American Enterprise Institute, by Mary Cummins



More great research from AEI. This is analysis of Freddie Mac's misleading and basically defamatory paper on Appraisal Gap. When government related entities release misleading information like this they are attacking and defaming real estate appraisers. The hate real estate appraisers have received because of this paper and Andre Perry's paper is relentless. 

Another problem with releasing misleading data and conclusions is that it actually hurts the people they are trying to help. Facts show that the real cause of the wealth gap between blacks, whites and Latinos is the income gap. It has nothing to do with appraisals or appraisal gaps. The government needs to help blacks, Latinos make more money. Offering help with down payments and reduced fee loans will not help these people long term. They end up in risky financial situations where they are more likely to lose their home. This causes more damage than not helping them at all. The government is setting these people up for failure which is a travesty. As noted in the report below "These polices are a violation of the FHFA’s (and HUD’s and the CFPB’s) obligation to Affirmatively Further the Goal of Fair Housing."

The government has done the same thing with student loans. The federal government gives more loans to blacks than whites based on % population. Blacks end up saddled with more debt. The government tells them to get an education and they can make more money. Instead they don't make enough income to pay off the student loan debts. This makes it difficult to pay rent and sometimes impossible to buy a home. If they do buy a home, they have huge levels of debt which can cause them to lose that home in an emergency. Helping or hurting? https://educationdata.org/student-loan-debt-by-race

Full report linked below.

"AEI Housing Center Critique of Freddie Mac’s Note on “Racial and Ethnic Valuation Gaps in Home Purchase Appraisals” November 15, 2021

Executive Summary:

While we applaud Freddie Mac for having undertaken an effort to assemble relevant data to investigate the topic of appraisal discrimination, it was premature to publish a note based only on “exploratory research” limited to a single race-based correlation, with no attempt to present a rigorous analysis regarding other potential explanations.  Merely stating that low appraisals resulted in “substantial appraisal valuations gaps” for minority versus White tracts provides an ominous sounding headline, but sheds little light on whether the gaps support a claim of systemic racism. Even worse, Freddie Mac’s research note was quickly seized by policymakers and the media as evidence of systemic racism.[1]

Rather than being due to racial discrimination by appraisers, we found Freddie’s claim of an “appraisal gap” is much more likely the result of would-be first-time buyer inexperience, socio-economic status (SES), or government actions (in particular a concentration of FHA lending in certain census tracts) with a disparate impact on protected classes.

Our analysis, which goes well beyond Freddie Mac’s “exploratory research”, can explain around 85% for Black tracts and 29% for Latino tracts of the gap through differences in socio-economic status (SES), leverage, and borrower characteristics. With the full set of controls, the Black gap disappears entirely, while the Latino gap falls by almost half.

In a robustness test, we found a sizeable FHA effect for majority White or White-only tracts. Thus, FHA lending, but also Equifax Risk Factor (ERS) and the one adult borrower share, is not simply substituting for minority borrowers.

Finally, research ignored by Freddie Mac has found a substantial consumer benefit to low appraisals:

Low appraisals provide enormous leverage to renegotiate the contract to a lower price. When buyers do renegotiate, subsequent to a low appraisal, they usually lower price by a significant share of the difference between contract price and appraised value. The new lower price reduces credit risk, costs to the borrower, and ultimately results in greater wealth for the buyer.[2]

If the differences found by Freddie Mac are in fact, as our research indicates, largely due to factors such as differing rates of FHA financing and SES in the grouped census tracts, then addressing wealth inequities through the use of easier lending criteria and accommodative monetary policy create a systemic barrier to sustainable homeownership and wealth creation by subjecting protected class households to risky lending, unsustainable price boosts, speculation in land, and home price volatility as other AEI Housing Center research has shown.[3] These polices are a violation of the FHFA’s (and HUD’s and the CFPB’s) obligation to Affirmatively Further the Goal of Fair Housing. Thus, instead of Freddie Mac’s correlation being the result of systemic appraiser racism, it may well have been the result of government policies and actions which have a disparate impact on protected classes. We respectfully submit the following comments in an effort to highlight the above deficiencies and report on our research into other explanatory factors. We believe that our research could be quickly confirmed. We trust that this critique will help inform Freddie Mac, FHFA, policy makers and the public on this important topic.[4]"

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/

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

Saturday, March 26, 2022

AEI Reply to Pave Report, Andre Perry's misleading research and Freddie Mac's paper

Joe Biden, HUD, Marcia Fudge repeatedly cite Andre Perry's misleading paper on race and home values. Perry's paper is not published or peer reviewed research. It's deeply flawed in its execution and analysis. Race is not related to home valuation. Socio-economic status is related to income which is related to race which is related to the value of a home bought by a POC. Blacks make less money than whites. People with less money buy less expensive homes. The value of those homes are not being reduced by appraisers, appraisals or AVMs. 

This is a very well researched and written reply to Andre Perry's misleading paper. Perry conflates race with socio-economic status. SES is income, marital status, % single mothers with children under 18...) If you adjust for SES, the differences disappear. If you compare whites with low and high SES, the gap appears. This proves it's not a race issue but an income, SES issue. 

It's vitally important to know the real cause of the wealth gap between black and white so a proper solution can be applied. I've been stating that we need to fix the income gap to fix the wealth gap. Helping people with lower SES pay for a down payment won't help them down the line if they don't have enough income to easily make the mortgage payments. You just set them up for failure and bigger financial losses. This research is from Edward Pinto and Tobias Peter of from American Enterprise Institute (AEI).

https://www.aei.org/wp-content/uploads/2021/03/Impact-of-Race-and-Socio-Economic-Status-on-the-Valuation-of-Homes-by-Neighborhood-3.18.21-final-revised-1.pdf

https://www.aei.org/research-products/report/aei-housing-center-response-to-perry-and-rothwell-2021/

This research brings up more flaws in Andre Perry's paper than I stated in my article about the research. Most importantly Perry intentionally did not include income stating it wouldn't affect the results. When income is included the value gap shrinks by half. Perry didn't include other important SES factors such as % single mother with children under 18. Everyone knows how expensive and difficult it is to work and raise young children as a single mother of any color. Perry also didn't include lot size, condition of neighborhood, condition of home, location next to natural amenities... I would bet Perry did this intentionally in order to show the results he desired. This is why his research was not published or peer reviewed. Thankfully AEI took it upon themselves to independently review the research. 

Other interesting findings from their report.

"We find that with higher incomes, Black borrowers increasingly chose neighborhoods, in which the Black share of residents is lower." "If Black and White neighborhoods are identical in every aspect except for price and their racial makeup (as Perry et al. claim), then why are Black buyers not taking advantage of lower priced homes in Black neighborhoods? It must be that Black buyers understand that White neighborhoods do have more amenities and those who can do so are willing to forego the “cheaper” homes in Black neighborhoods in order to get those amenities."

Income and marital status matter. "The Black homeownership (HO) rate is much lower than the White HO rate, but the difference gets smaller as income grows. The HO rate for White or Black married households (HH) is much higher than for unmarried White or Black HH."

"There is a big disparity by marital status between Blacks and Whites. Unmarried Black HH comprise 70% of Black HH, and the vast majority are below area median income." Their research has also shown more integration and increased income among blacks over time.

"Diagnosing the causes of the home value gap, along with a recognition of decreasing racial and ethnic segregation and increasing Socio-Economic Status (SES) stratification, helps in the consideration of appropriate policy solutions that will increase financial security and shrink the SES gap."

They offer some sound solutions at the end of the report.This is the type of real scientific fact based data that Joe Biden and HUD needs to see and use. Using Perry's report harms POC and will not help them. Perry is harming black people with his dishonest paper. I only posted the first part. Click the link to see the full article with data, charts and statistics. 

"On March 23rd, the Interagency Task Force on Property Appraisal and Valuation Equity and, which is composed of thirteen federal agencies and offices, released its report entitled “Action Plan to Advance Property Appraisal and Valuation Equity: Closing the Racial Wealth Gap by Addressing Mis-valuations for Families and Communities of Color.”

Commentary on PAVE’s conclusion:

PAVE concluded that “Homeownership is often hindered by inequities within current home lending and appraisal processes, which research shows disproportionately impact people in communities of color.”

As noted in the Executive Summary, the report largely rests on three studies for its conclusion: (i) a report by the Brookings Institution, (ii) a note by Freddie Mac, and (iii) a blog post by FHFA.[1] In our work, we have issued lengthy critiques that discredit the first two studies (see our rebuttal to Brookings and to Freddie Mac) and now take the opportunity to respond to the FHFA study.[2] Here is a summary of our findings:

The Brookings and Freddie Mac studies are not based on rigorous data analysis. Most importantly, they conflate race with socio-economic status (SES), i.e. income, buying power, marriage rates, credit scores, etc. Race-based gaps found in the Brookings and Freddie Mac studies either entirely or substantially disappear when adjusting for differences in SES. Furthermore, our analyses show that similar gaps are present in majority White or White-only tracts across different SES levels, raising serious questions regarding a race-based explanation.[3] We also addressed a rebuttal from the Brookings authors to our critique. We found that Perry and Rothwell’s (2021) rebuttal to our critique supported our claim of omitted variable bias, failed to rebuke our methodology, and never addressed our case studies. We also presented solutions based on our findings. The Freddie Mac study took pains to state that its research was both “exploratory” and “preliminary”. Yet PAVE accepted Freddie Mac’s findings at face value, even though research by Fannie Mae provides a likely, non-race based explanation for the valuation discrepancy found by Freddie Mac. It is worth noting that Fannie Mae’s explanation casts a favorable light on the appraisal industry.

This conflation by both Brookings and Freddie Mac is of critical importance. While there is agreement regarding the symptoms observed by PAVE–racial and ethnic differences in the homeownership rate, the financial returns of owning a home, and median wealth levels–ascertaining the causes and workable solutions requires a competition of ideas.[4] PAVE excluded research that was inconvenient or inconsistent with the desired narrative and conclusion.[5]"

Read the rest here. 

https://www.aei.org/research-products/report/comments-on-the-pave-report

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

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,
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. 

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 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

Wednesday, March 23, 2022

PAVE Task Force Action Plan from White House Released by Mary Cummins Real Estate Appraiser

real estate appraiser,real estate,united states,pave task force,marcia fudge,white house,HUD,mary cummins,appraisal,joe biden,california,appraiser,los angeles,action plan,
real estate appraiser,real estate,united states,pave task force,marcia fudge,white house,HUD,mary cummins,appraisal,joe biden,california,appraiser,los angeles,action plan,

PAVE task force report is out. The White House press release misquotes and twists the data to fits its agenda. It then goes into their issues. Nothing here that we didn't already know. It is sad to see the government continuing with the false racist white appraiser narrative. Racist appraisers exist but every appraisal you don't like is not the result of racism. 

For the 100th time, the cause of the wealth gap between blacks, POC and whites is the income gap. If you make less money, you have less money. If you have less money, you buy and own a less expensive house. Real estate appraisers, automated valuation methods are not devaluing the homes of blacks, POC. They bought less expensive homes to begin with. If you want to solve the wealth gap, solve the income gap. Don't scapegoat appraisers and appraisals. It's clearly easier to blame appraisers than fixing the income gap which I realize is a difficult problem.

White House Press Release

https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/23/fact-sheet-biden-harris-administration-releases-action-plan-to-address-racial-and-ethnic-bias-in-home-valuations

PAVE Task Force Action Plan Executive Summary

https://pave.hud.gov/actionplan

Actual PAVE Task Force Action Plan as pdf

https://pave.hud.gov/sites/pave.hud.gov/files/documents/PAVEActionPlan.pdf

Rooting Out Bias in Home Appraisals: The PAVE Task Force Action Plan to the President. Join Vice President Harris, White House Domestic Policy Advisor Susan Rice, Housing and Urban Development Secretary Marcia Fudge, and Americans who have been negatively impacted by the home appraisal process on new actions the Biden-Harris Administration is taking to root out bias and ensure that every American has a chance to build generational wealth through homeownership. 

https://www.youtube.com/watch?v=UPtS0lPpiT4

My comments on the full PAVE report are below. I'm sad to see the misinformation, false data and twisted interpretations made it into the final government report. I had hoped the final report would be fact and science based. It's mainly political talk to incite and appease certain groups. 

Pg 1. The report starts out with a fact. "Today, the median white family holds eight times the wealth of the typical Black family and five times the wealth of the typical Latino family." They should have followed that up by stating that whites make more money than blacks and Latinos.  This is the main cause of the wealth gap. 

Pg 2-3. They refer to Andre Perry's paper but don't mention his name or paper in the text. They merely list it as ref 2. Maybe they finally realize Andre Perry's paper was not independent, peer reviewed or published research. The pre PAVE reports listed him by name extensively. 

Pg 3 While referring to Perry's results they state "Recent research has identified appraisals as one of the drivers of the gap." There were no "appraisals." Zillow zestimates or AVMs were used. Even Zillow states their zestimates are not appraisals.  Zillow has the least accurate AVM which is just one reason the research is meaningless. 

Pg 3. They misquote the Freddie Mac research. Freddie Mac clearly 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...

Pg 3. They stated a recent analysis of appraisals for government insured loans revealed some contained racial or ethnic references. "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. 

Pg 3. Appraisal gaps exist and are part of the natural market. They are caused by the historical approach to value based on closed sold comps. It happens to everyone in a quickly rising market. They infer it only happens to people of color POC. They state it negatively affects the entire community. No, it doesn't. It happens in a quickly appreciating market. It does not effect property value for property taxes. They also forget to mention that it affects areas where there are black, brown, white people. If it were only related to race, color, it wouldn't affect the white people in the same exact area but it does. 

Pg 4. Black home ownership rate is 44% and white is 74%. "Eliminating the gap in homeownership would help reduce the wealth gap." Agreed. That is accomplished by helping them increase their income. The more money you make and have, the more expensive house you can buy. These people think appraisers set the values of homes. We don't. Buyers, sellers do. We just report it. 

Pg 4. "I live in an all-Black community. My lot and house are bigger, yet my home is valuated at $25,000 less than the house two doors from me, which is an all-white community. The Biden-Harris Administration acknowledges that the communities of color like mine have lost billions of dollars solely through the appraisal process. We’re committed to taking meaningful action to increase homeownership and generational wealth for all. HUD Secretary Marcia L. Fudge."

Great, now I have to evaluate Marcia Fudge's house 26910 Emery Rd, Cleveland (Warrensville Heights), OH 44128, 3 bed 2.5 bath, 2,423 sf on 1.49 acres built 1952 last sold 1976 when she was 24. I have a feeling her statement is not the truth. And it's not! Marcia Fudge appears to be comparing her older home to a newer development across the street, highway. This is the description of the newer development across the street. I have no idea if it's "all-white" as I have no way to know that. Should this woman be the head of HUD if she doesn't understand the fundamentals of real estate and real estate valuation? 

"Fabulous model Quality masterpiece built by Skoda Construction with all the bells and whistles! Stunning chefs kitchen with High-end appliances, granite countertops, wood / Laminate flooring, tile, and more! First floor office, family room overlooking the stunning kitchen and backyard with a deck. Upstairs offers a fabulous master suit, second bedroom and laundry room. Finished lower lower, bonus room and full bath in lower level!! This is your opportunity to have your dream home in this Upscale Community! Clubhouse in development. 15 Year tax abatement at 75% of home only! IF you are Military, the 15 Year tax abatement is 100% of home only!"

Pg 5 1.5 "Address potential bias in the use of technology-based valuation tools through rulemaking related to Automated Valuation Models (AVMs)." AVMs are biased against every home except an average home with no upgrades, no views, in average condition. AVMs cannot see condition, view, additions, upgrades, specific location in a neighborhood (on top of a hill, on a cul-de-sac, next door to industrial property). Garbage In Garbage Out. GIGO. You need a live person to see the type of view, remodel, upgrades... There is no number for view. They should not be used in place of an appraisal because they are not accurate. 

Pg 5. "Update appraiser qualification criteria related to appraiser education, experience, and examination requirements to lower barriers to entry in the appraiser profession." Except for the trainee program, the qualifications are already very low. You don't need a college degree or even a high school diploma. You just need to take the classes, do your hours and pass the test. 

Pg 7. "Expanded use of alternatives to traditional appraisals as a means of reducing the prevalence and impact of appraisal bias." The alternatives are AVMs which are biased against all properties except average ones. Hybrids are also biased. The appraiser does not do the inspection with a hybrid. The inspector who only has 2-3 days of training max will miss major flaws in the home or neighborhood.

Pg 7. "Use of value estimate ranges instead of an exact amount as a means of reducing the impact of racial or ethnic bias in appraisals." How will the loan amount then be determined? As a range as well? 60-80% LTV? Lenders could choose the lower range of the value. Did anyone think through these issues or are these ideas that people just blurted out at a meeting to write on a dry erase board?

Pg 10. "Black Americans who do own homes hold less home equity, on average, than white homeowners." This goes back to income inequality. Whites make more money. People with more money own more expensive home and have more corresponding equity. Whites own more expensive cars than blacks, latinos. Is this also the cause of real estate appraisers?

"An uneven recovery from the 2008 housing crisis cemented these differences: houses in majority white neighborhoods regained value more quickly than those in comparable Black and Latino neighborhoods." This goes back to income inequality. Homes in the lowest price ranges may not have recovered as well initially because they were lower priced originally. The lower the price, the less desirable they are to the market. This is econ 101. 

"Frederick Babcock’s influential 1931 manual “The Valuation of Real Estate,” hypothesizes that neighborhood decline results inevitably from occupation by “…the poorest, most incompetent, and least desirable groups in the city,” and describes how “…racial heritage and tendencies seem to be of paramount importance” in influencing property values." 

They state these ideas were included in the 1933 HOLC which estimated financial risks on a map. This goes back to income inequality and correlation. The first HOLC maps included race, ethnicity and nation of origin in their maps along with many other factors. This was determined to be racist language so race, ethnicity and nation of origin were removed from the maps. All of the other factors are still used today to determine risk. Removing race, ethnicity, nation of origin didn't change the risk. I'm glad they got rid of race, ethnicity and nation of origin.

Not allowing black and other people to live in certain areas was very wrong. I'm grateful the government worked to make that illegal. I'm glad we have the 1968 Civil Rights Act. We've come a long way but have more to go to root out racism and discrimination if it's even possible. We humans may always have an "us" versus "them" mentality based on any factor. 

Pg 14. They argue that appraisers used to over appraise to satisfy lenders, borrowers. They further argue that this "caused" the run up to the great recession. This is false. Appraisers report values. We don't set them. I lived and worked during that run up. Appraisers generally missed the contract price. There were appraisal gaps. We were called "deal killers" back then. Because of today's political climate we are now called "racists." Because the values went down during the great recession some are falsely stating we must have appraised the properties too high originally. We did not. Now the same people are complaining that we're appraising too low. If we appraise at contract, we're in cahoots with lenders. No win situation here. 

Pg 14. "For the purposes of this Action Plan, the Task Force will use the term undervaluation to refer to valuation estimates less than a reasonable estimation of market value, understanding that there is imprecision in that term." What is this "reasonable estimation of market value?" None of these entities have done actual appraisals of their own on any of these properties. Why not compare appraisals to appraisals instead of AVMs or contract price? I believe it's because the results won't fit their agenda. Their agenda is the racist appraiser narrative in order to get votes by POC and people with less money. This is all based on Joe Biden and Kamala Harris' campaign promises. FYI I'm a Democrat and voted for them. In this instance they created a problem then promised they alone could solve. This all started during the 2020 campaign. The PAVE task force was basically a campaign promise. What about Kamala's promise to give over $70 billion to black colleges? That's too difficult. So is income inequality. Let's attack appraisers instead and say we're keeping our campaign promise. 

Pg 14. And one paragraph of truth. "In purchase appraisals, when a property appraises at less than the contract price, it may be the sign of an undervaluation. A purchase appraisal below contract price is not necessarily inaccurate or harmful. In fact, an appraiser’s well-considered valuation that is less than a contract price can serve precisely as the control that appraisers are hired to provide. A fully justifiable valuation less than contract price can benefit both the buyer (who may then be prevented from overpaying) and the credit risk holder."

Everyone needs to remember that the appraiser works for the lender and not the seller, buyer, borrower or real estate agent. Our job is to determine risk for the lender and investor. Our job is not to help the seller, buyer make a deal. They can hire their own appraiser to represent themselves if they like. 

Pg 15 If an appraisal comes in lower than the contract price "the buyer (has) to come up with additional funding to make the deal work. Obtaining more funding can be difficult for many borrowers, especially borrowers of color, whose median wealth lags that of white borrowers." Exactly. Whites have more money than POC. People with more money are more likely to be able to pay back a loan. You're not doing a person with less money a favor by getting them into a property they can barely afford. One life emergency and they'll lose their home. You set them up for failure. It's better to help them earn more money and let them save, buy and pay for their own house. They're more likely to make the payments. Getting people with less money into a house with a low or no down payment, lower fees doesn't help them keep their house. I see these people lose their homes. It's horrible. 

Pg 16. "When a neighborhood exhibits a pattern of low appraisals, the cumulative effect is a dampening of home values in that neighborhood, thus reducing the realized wealth of all of the neighborhood’s homeowners." No. If a neighborhood exhibits a pattern of "low" appraisals, it means the neighborhood is worth less. No one dampened the home values but the market. The market is the buyers and sellers the people the government is saying are being lowballed. If that's so, then buyers and sellers are lowballing themselves with their agreed upon contract prices! Appraisers don't set value. We just report it. 

Pg 17. This makes sense except it's not "undervaluation" but "market valuation." "Undervaluation patterns in neighborhoods are not always directly traceable to racial and ethnic bias in individual appraisals. Housing markets with more distressed properties, fewer transactions, or rapid house price growth are correlated with undervaluation. Similarly, one-bedroom, older, and lower-valued properties are correlated with underappraisals."

The PAVE report cites Andre Perry's paper multiple times without naming it. I think it's because they don't want people to Google him or his meaningless non published, non peer reviewed paper. 

Pg 18. The report talks about property tax assessment value and property taxes. Real estate appraisers who work for the lender do not appraise the properties for tax assessment purposes.The county tax assessor does that. Some cities, counties, states base the assessment on recent sales like Texas and some lock in the value upon purchase like California. Appraisers have nothing to do with this. Blame the counties and states. 

Pg 21. I knew this was part of PAVE! "On February 14, 2022, DOJ filed a statement of interest to make clear that the Fair Housing Act prohibits discrimination in home appraisals. The statement relates to a motion to dismiss filed in Austin, et al. v. Miller, et al. (N.D. Cal.), a private lawsuit alleging that the defendants violated the Fair Housing Act by discriminating on the basis of race in a home appraisal. After the defendants’appraisal, the plaintiffs — a Black couple — erased all evidence of race from their home and had awhite friend pose as the homeowner for a second appraisal, which set the home’s value at nearly$500,000 more. The statement of interest explains that appraisers may be liable under the Fair Housing Act, highlights the United States’ commitment to combat appraisal discrimination, provides an overview of the Fair Housing Act’s broad purpose and remedial intent, and addresses the pleading standard for Fair Housing Act claims."

This is a frivolous and meritless case. There was no bias, discrimination or racism. Black homeowners stated they wanted the appraiser to use comps from "white areas" and not "black areas" directly next to their home. They wanted the appraiser to use comps in Mill Valley over a mile away to appraise their home in Marin. Mill Valley homes are worth twice as much as Marin because they are higher quality homes in the hills with one of the best school districts in the state. Marin city is next to a port area. The area has poorly built federally subsidized telephone pole homes and apartment buildings. Read about this case here. https://mary--cummins.blogspot.com/2021/02/alleged-discrimination-home-appraisal.html

Pg 26. They're talking about controlling the use of the word "declining market." This generally comes from the 1004MC form. It's a math formula which considers all sales in the neighborhood within the last 12 months. Are list, sale prices going up or down over the last 12 months. That definition is not up to the appraiser but the numbers. 

Pg 26. They're talking about possibly delineating neighborhood boundaries specifically for appraisers. Neighborhood boundaries move and change constantly. The appraiser better knows the neighborhood than a suit in Washington and definitely better than an AVM. Some AVMs like inaccurate Zillow will keep widening the search to look for recent similar sales. It will go miles away into a totally different neighborhood. That is why the Austin case above has Zillow AVM values at the same value as the higher inaccurate second appraisal. More accurate Corelogic AVM values are similar to the lower appraisal value because it did not widen the search to Mill Valley which is worth twice as much. Zillow AVM values were twice Corelogic AVM values. That shows how inaccurate Zillow and AVMs are in general. Of all the AVMs I've seen, Corelogic is the most accurate. They still only kinda work for average homes. 

Pg 28. "While the exact number of instances of valuation bias is difficult to assess, recent media accounts, coupled with data and history regarding lending and appraisal practices, reflect a persistent mis-valuation and undervaluation of properties experienced by borrowers and communities of color."

PAVE members know how many complaints are based on valuation bias. They just don't want to say because most bias, discrimination complaints reported to HUD are based on disability and not color, race. Most complaints per HUD are dismissed. The recent media accounts have been very misleading. I researched all of the major appraisal discrimination stories in this blog and found that the first appraisals were accurate. The later appraisals were over inflated.

Pg 31 I agree that the trainee program for new appraisers is too difficult. I agree with PAREA for some experience. Appraisers still need to know what they are doing. They need hands on experience. I don't agree with eliminating all experience. "Reduce or eliminate AQB experience requirements." You're more likely to get biased appraisers if you do that. I am fine doing away with the college education requirements. You could qualify with other education as it is. There still should be some education at least a high school degree and some community college credits. I don't agree they should just pass a written test. You need to know how to inspect a house, measure it legally, choose comps, make adjustments via regression analysis, statistics, geometry... 

Pg 34. "Empowering consumers to take action." I sure hope they educate these people about what is real appraisal discrimination and what is not. An appraisal that is lower than you want is not bias or discrimination. It's most likely the market. I foresee many false and frivolous complaints. I also see borrowers, sellers threatening appraisers with complaints just to get the value they want. They're already doing it based on the false media articles. Maybe they should also give legal advice and free lawyers for the appraisers who have complaints lodged against them if they are doing the same for the people filing complaints. 

I hope when they inform people about ROV that they educate them about a proper and legal ROV. I've seen some where they ask the appraiser to consider a home sale where the house was twice as big and four miles away. Any new comps must meet the criteria which is basically +/- 15% GLA difference within half mile radius of subject sold and listed within the last 30-90 days preferably or up to six months in similar condition with a similar bed/bath count, view, upgrades and amenities. 

I fully support a goal to "reduce the prevalence and impact of racial and ethnic bias in residential property valuation." While there are racists in every profession I just don't see racial and ethnic bias to be a major problem in appraising. Real estate appraisals are based on a math formula. Actual appraisers are needed to get the data to put in the math formula. We select our comps based on a math formula before we physically step foot in a home. We know 99% of the value before we enter the home. We generally don't see the seller, buyer, borrower or neighbors. We generally don't know the race, color, religion ... of the homeowners, buyers or borrowers of the subject or the homes that sold or are listed.

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

Monday, March 21, 2022

Jennifer Lopez JLo, Ben Affleck home at 10771 Bellagio Rd, Bel Air, California by Mary Cummins real estate appraiser

jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal
jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal, the bellagio house

Jennifer Lopez and Ben Affleck's new home is located at 10771 Bellagio Rd, Los Angeles, California 90077 (Google map). GPS 34.0802867132731, -118.45096879923662 It's 10 beds, 17 baths, 19,721 sf on 52,052 sf lot built in 1936 and extensively remodeled over the years with many new additions. It was originally built for Oscar Stuart Oldknow of Fox West Coast Theaters in 1936 by licensed architect S.C. Lee at a cost of $15,000. S.C. Lee designed movie theaters which is how he met the owner. Oldknow owned over 350 movie theaters in the 1930's. His wife played golf. Oscar died in 1951. Oscar's father was Georgia motion picture pioneer William Henry Oldknow. 1956 it was listed at $115,000. 1973 it was listed for sale for $325,000. It was originally one story 3 bed, 3 baths. Paul Williams was not the original architect. Maybe he designed part of a remodel later. I'm not positive. All data is public information from public government and other public sources. Nothing is confidential. I have never appraised this property.

AIN 4362-004-004. Area is Los Angeles City but also called Bel Air, Holmby Hills. The alleged sale price was $50,000,000. It has a view of the Bel Air Country Club, city, ocean and mountains.

General layout on the site. It's a "corner" lot on a major curve with lots of privacy. Lot is higher than surrounding area. Fantastic city view. 

jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal
jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal

View



jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal
jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal

Original permit 1936.

jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal
jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal

Recent permit which shows layout.

jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal
jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal

Plat map. Curve on top right with the number "4" in a circle, lot 21. Tract 7656, lot 21.

jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal
jennifer lopez, jlo, ben affleck, benjamin affleck, actor, singer, mary cummins, real estate appraiser, los angeles, 10771 bellagio, bel air, california, real estate, appraiser, appraisal



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