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

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
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Monday, July 8, 2024

Apprasal BuzzCast with Hal Humphreys, Peter Christensen - Two Case of Alleged Appraiser Bias, Malpractice by Mary Cummins Real Estate Appraiser

jim morrison, hal humphreys, peter christensen, appraisal, real estate appraisal, appraiser, los angeles, california, mary cummins, lawsuit, bias, discrimination, hud

Appraisal Buzz has a good video on their The Appraisal BuzzCast with real estate appraiser Hal Humphreys and lawyer Peter Christensen talking about recent real estate appraisal lawsuits. The episode is July 3, 2024.

https://www.youtube.com/watch?v=rQQ2gbWj5x0

The video discusses two recent appraisal lawsuits and Peter Christensen's upcoming class in August at Valuation Expo. Peter Christensen said right now there are about 11 real estate appraisal bias lawsuits. HUD hasn't decided on 200 plus investigations. 

The first case is in Chattanooga, Tennessee. An appraiser appraised a house for a purchase borrower. The home was under renovation and not complete. The value came in below contract so the borrower couldn't buy the home. A month later after the property was complete and finished another borrower tried to buy the property. He was given a copy of the old appraisal. The new potential lender was a credit union. They ended up hiring the same appraiser who just appraised it a month earlier. That appraiser did not reinspect the now finished property. They just changed the effective date and lender. They stated they reinspected the property when they didn't. They came in at the same older value.

The borrower contacted the credit union who basically said just deal with the low value. Borrower went to another lender, got a new higher appraisal, got the loan and closed on it. That borrower then sued, complained about the appraiser and the lender. Appraiser was sued for of course lying about inspecting besides a million USPAP and other violations. The lender was sued for not reporting the appraiser to state board. 

That appraiser was absolutely in the wrong and deserved to be sued. He must have been pressured by the lender. Otherwise why not go back out especially when it wasn't finished a month earlier. Of course it will look different. Stupid appraiser. I didn't know lenders could be sued for not reporting an appraiser. 

The second case is in Los Angeles, California which I'd heard about. It involves a black ex football player and his wife a retired accountant. It involves four appraisers in a reverse mortgage. There were two "acceptable to the borrower" higher appraisals. Home must be valued over $1,000,000 to need two appraisals Then there were two review appraisals which came in 25% lower. Then there were two more review appraisals which also came in 25% lower. All the lower appraisers are being sued for racial discrimination and bias.

I haven't seen any appraisals but I heard about the values. Based on my experience the lower appraisals are more likely to be accurate. There is no reason to lowball an appraisal value. You could be sued for bias by the borrower. This is why appraisers are more likely to come in higher than market value. Maybe the higher appraisers were biased positively because the guy was an ex football player? Maybe they came in higher because the borrowers are black? The review appraisers don't see the people. They don't see any personal photos because they're all blurred. How would they ever know race, color, gender...of the borrower? How can they be biased based on factors they don't even know? I wish I knew more about the case. 

Just found this on Peter Christensen's LinkedIn page.

"In this new case, a retired NFL player and his wife have filed fair housing discrimination legal claims. The claims involve multiple appraisals/appraisal reviews for the purpose of a proposed reverse mortgage. There are 9 appraisals/reviews performed by different appraisers from November 2020 to August 2021 identified in the case. The value opinions of the suburban home range from $1.5m to $3.15m.* The borrowers allege that the low values in that range, which prevented their reverse mortgage, stem from bias based on their race and on the predominant race in their neighborhood. As reflected in the snippet below from their court complaint, they filed a HUD complaint in January 2022 and waited for a result for more than 2 years - until finally withdrawing the HUD complaint in April 2024 to pursue a civil action in state court.

* For the curious, here are the values/dates of value in the 9 different appraisers' reports: 

 > 11/18/20: $3.1m

 > 1/13/21 (4 reports with same date of value): $3.1m, $2.6, $2.5m, $1.5m

 > 1/26/21: $2.5m

 > 6/3/21: $3.15m

 > 6/20/21: $3.1m

 > 8/20/21: $3.1m " 

That's a huge range of values. I definitely see why they were concerned. Looks like some appraisers used bad comps? I'll update this if I find out more about the case.

Hal Humphreys had some good and obvious suggestions so you don't get sued as an appraiser. Peter agreed with him. Be nice, receptive to person's input and do the absolute best and most thorough appraisal possible. Peter said sometimes if an appraiser is rude, short or rushed, it may come across as biased or racist even if the appraiser treats everyone that way. Peter said "kindness matters." If they tell you, you got the sf wrong, listen to them. Make changes if warranted. Talk to them about the process. This will eliminate a lot of problems. I absolutely agree. I must state that some AMCs instruct appraisers not to "chit chat" with borrowers, people at the property.

I've thought about how to avoid problems as an appraiser. Obviously, be nice, courteous and receptive. When I'm in a situation where I'm appraising a complex appraisal say in an area going through revitalization, near an area with much higher prices or where home values vary greatly, I explain things in layman's terms. I will state why I didn't use certain comps and why. If the home next door sold for 50% more, I will mention it and why I didn't use it, i.e. double the size, fully remodeled, pool, ADU... If the subject is on a busy highway and homes nearby on cul-de-sacs sell for 50% more, I'll mention them and state why I didn't use the comps. Not all borrowers are incredibly real estate savvy. As it is our appraisal forms are confusing even with the definitions page. There's a lot of abbreviations, codes, rating numbers/letters... Some sections like "condition" are confusing. I always tell them to call me if they have any questions. Make sure you reply to their calls. 

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


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

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Friday, June 28, 2024

Glendale Metro Station aka Southern Pacific Railroad Depot by Mary Cummins

glendale metro station, southern pacific railroad depot, mary cummins, real estate appraiser, real estate appraisal, real estate, appraisal, los angeles, california

The Glendale Metro Station was formerly known as the Southern Pacific Railroad Depot. I took these photos when I was down the street dropping off kittens to be spayed at Kitten Rescue.

On March 27, 1924, the Southern Pacific Railroad opened its eagerly anticipated Glendale passenger depot to an evening of great fanfare and community praise. The railroad contracted the San Francisco Architectural firm of MacDonald and Couchot. Architects Kenneth MacDonald Jr. and Maurice C. Couchot also designed depots for the Southern Pacific in Los Gatos and Santa Clara, but those stations no longer stand. The Spanish Colonial inspired depot features heavy "California" plaster mimicking adobe hiding its all cast concrete construction. Beautiful wrought iron grills, railings, lanterns and magnificent Churrigueresque cast stone entry portals guarded by fanciful mermen figures hold up the railroad's herald above each waiting room door. A concrete scored floor resembles old tile and the bumpy plaster finish continues inside. The crunch of decomposed gravel heard underfoot, was long ago replaced by modern concrete platforms. Native California plants and climbing roses were original landscaping. Because of the depot's proximity to the film industry in Los Angeles and Hollywood, many movies have been shot there. In the 1930s Buster Keaton filmed "College" at depot, "Horse Shoes" was another. The most well know film with the depot as a background was by director Billy Wilder, "Double Indemnity" in 1944 starring Fred MacMurray and Barbara Stanwyck. The depot has undergone minor remodels in 1943, 1954 and restored in 1999 and 2012. Today, the unstaffed depot serves 10 Pacific Surfliners, 54 Metrolinks trains weekdays, and 12 Antelope Valley Line trains Weekends and is the 37th busiest Amtrak station in the state with 100 passengers daily.










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


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

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Saturday, June 8, 2024

Details About Alleged Racial Bias Case in Allendale, Oakland, California from Civil Rights Department by Mary Cummins Real Estate Appraiser

allendale, oakland, california, mary cummins, real estate appraiser,bias, discrimination, real estate, appraiser, appraisal, real estate appraiser, fair housing,redlining,
allendale, oakland, california, mary cummins, real estate appraiser,bias, discrimination, real estate, appraiser, appraisal, real estate appraiser, fair housing,redlining, 

This morning I received the results of a California State Information Act Request I made regarding an alleged case of racial bias in Allendale, Oakland, California which was settled May 2024. I requested any and all documents in the case involving the appraiser because I didn't have the complainant's name or property address. I only had the appraiser's name which I won't post in text. 

Complainant stated appraiser told them they should remove security bars from windows. Complainant stated this is evidence of "racist discrimination" based on "racism/includes hairstyle and hair texture." Security bars on bedroom windows which don't release from the inside are against code in California since about 1995. All appraisers, lenders tell everyone to remove the bars because it's the law and prevents people especially children from burning to death in a fire.

Response to State Information Act Request. They redacted name and address.

https://drive.google.com/file/d/1muiicnMhbJfi7F5L2vcltoYvdw8HbIXq/view?usp=sharing

Summary of response. They redacted name and address.

https://drive.google.com/file/d/15KPOXRBORCfL9LknvGr5TiWwObqoHvRJ/view?usp=sharing

Press release from Fair Housing Advocates of Northern California about the case.

https://www.fairhousingnorcal.org/press-releases-and-statements/discrimination-complaint-alleging-race-discrimination-in-home-appraisal-process-settled-with-appraiser

I was hoping for an address or name so I could check the values by doing historical valuations. No such luck but I did get other vital information from the complaint, see below. This information shows the first appraisal probably wasn't biased but the second higher one probably was. I will say that census tract 4070, Allendale, Oakland, California is an area going through revitalization and rapid home appreciation. ( FHANC are the ones who stated the tract. Appraisers don't look at tract information. I'm looking at it now because FHANC mentioned it in their complaint. Allendale is almost exact same area as the tract) If you look at the census map linked directly above, the MacArthur Fwy 580 goes through the tract. Generally freeways are initially built through areas which had lower values because it's cheaper for the city, county, state to purchase the land. Allendale is across the bay from much higher priced San Francisco. People priced out of SanFran have been pushed over into Allendale, Oakland for years now. This is why prices in Allendale and the surrounding area have been increasing rapidly especially for fully renovated properties. Properties near freeways vary more in value based on proximity, view of the freeway. This is a map of Allendale on Google. Here is Zillow (I know, I know) chart of home appreciation in Allendale over time. Zillow is okay for trends but not for specific home values.

We do know that the subject property needed repairs. An older property in an area going through revitalization is a more complex appraisal. It will be worth less than similar properties which have been fully renovated. The cost to renovate an older home in this area can easily run $250,000. Most of these homes, duplexes were built 1900-1930. 

FHANC states Allendale is a "black neighborhood" which is a racist statement. Census docs state the inhabitants are mainly Latino, Asian, White, Black in that order of percentages. "Black" is actually the smallest percentage of the population in that area. This shows a false statement and bias by FHANC. Census docs state median value of owner occupied homes in area today May 2024 is $702,200 ±$68,592. 78% of homes worth $500-$1M. Only 8% worth over $1M. The home was worth less at the time of appraisal 2021. Median prices for the area were lower then.

The owner stated she had two recent previous and one subsequent appraisal on the property. That's a red flag right there. Why did she make so many recent loan applications? Clearly the previous loans were probably denied or she wouldn't be seeking yet another loan. This would also cause more credit inquiries which make it more difficult and expensive to get a loan. A good loan agent would have explained all of these things to her before doing a credit check or appraisal. Sometimes you need to work on credit or the property before doing a credit inquiry or appraisal or you'll just get rejected and have to wait six months minimum to reapply.

The owner stated the property needed work. "Ms. Trent applied to a mortgage company to refinance her home loan and to use some of the equity to finance  needed repairs and renovations." "I was relying on being approved for the loan to in order to make improvements to my heating and bathroom going into the winter." Many banks will not give a conventional loan on a property if it needs major repairs or is in less than average or fair condition. The appraisal value is not the only reason why a loan could be denied. Sometimes lenders just state that when it's not true to deflect blame, complaints and lawsuits. Even if the loan to value ratio were higher than the borrower desired, the borrower could get a higher LTV ratio loan if they had good credit and/or paid a higher rate. 

One interesting note is that the complainant states she was discriminated against based on her "Race (includes hairstyle and hair texture)." She claims she was "Denied equal terms and conditions; Denied loan/home owners insurance." She claims the appraiser made racist, racially charged statements which were "critical of her and her home specifically that her security bars should be removed." Unreleasable security bars must be removed from bedroom windows because people can die in a fire. They can be replaced with bars which release from the inside so people can escape a fire. That's not racist but California Health and Safety, Building Code and the law since 1995-1998! Here is the Oakland security bar law. I've said that to everyone with security bars even when I don't see or know what the owner looks like.

She claims the appraiser adjusted sold comps down $150,000 to $200,000 based on their superior condition. She stated her home needed work. We're supposed to adjust for condition. She stated appraiser only used two comps in area with more "white people" unlike her area. She wanted "white" comps just like the last case in Oakland. Again, it's the race income home value correlation and not race home value. Whites make more money than Latinos, blacks. People who make more money have more money and buy/own more expensive homes in more expensive areas. The correlation is not race/color = home value. 

She goes on to mention "redlining" maps from 1935-1968. Here's an article I wrote about redlining. The maps were made by the government's Home Owners Loan Corporation to determine property risk factors so the government could give people cheaper loans to help the economy. It included many factors which we still use today. Some maps included race, nationality of inhabitants, not owners of the properties getting the loans. Race, nationality were omitted in 1968. Race, nationality were a mere correlation to value, risk because of income. They were not a direct factor which caused the property owner to be considered high risk and be denied a loan. There were red zones which had no black people. It wasn't black=redzone=loan denied. It was high risk=redzone=loan could be denied.

She said her property was in a yellow zone almost 100 years ago. ( HOLC aka "redline" Map of Oakland 1936-39) Makes sense as it was closer to new then and there was no 580 freeway. She said appraiser cut off comp properties at the 580 freeway. 580 built 1960 after home was built. That makes total sense as that is the edge of Allendale. She wanted the appraiser to choose only certain higher comps in a circle around her. We shouldn't always choose a perfect circle around the subject because neighborhoods aren't laid out that way. She said appraiser only chose comps from specific areas. That's what we're supposed to do. She said appraiser chose comps based on 100 year old redlining map. I doubt the appraiser has even seen the redlining maps from 100 years ago. Research has also shown that redlining affected the white property owners mainly. Research has shown that redlining does not affect properties today in a negative manner. Those areas have actually appreciated the most through revitalization which some incorrectly call "gentrification."

She states appraiser lives in the Bay Area. She also I assume Googled the appraiser after the appraisal. There is allegedly a photo of the appraiser in San Francisco in front of the Gadsden flag with a caption that states "Don't tread on me! A warrior of light never accepts the unacceptable." She states that's racist. The phrase is the opposite of racist. The first part "don't tread on me" is a message to the British not to trample on the rights of Americans. The second part is from "Excerpt from Warrior of the Light: A Manual by Paulo Coelho." The phrase is against antisemitism and Hitler and other ills of the human race. The Gadsden flag flies in the Civic Center of San Francisco. "The Gadsden Flag is a historical American flag with a yellow field depicting a timber rattlesnake coiled and ready to strike, beneath which are the words “DON’T TREAD ON ME.” Its creator, Christopher Gadsden, designed it in 1775 during the American Revolution as a warning to Great Britain not to violate the liberties of its American subjects." She is clearly racist. She sees racism in everything. I realize people who have been discriminated against in the past will assume everything they don't like is racism but it's not.

First appraisal December 8, 2021 at $785,000. Second was a month or so later at $1,125,000. This sounds exactly like the other Oakland case of alleged bias. It's also directly related to an article I just wrote on why appraisal values can vary. That is a huge difference. It appears the second appraiser used properties in a more expensive neighborhood/area farther from the 580 freeway and subject which were in superior C2-C3 renovated condition. I believe the second appraiser was incompetent and trying to avoid a complaint. Higher value means happy borrower and no complaint even if the appraisal is riddled with mistakes and is bank fraud. It takes a good experienced ethical appraiser to come in at market value in these situations knowing there could be a nightmare frivolous meritless complaint like in this case.

Sadly we don't have enough information to know if there was any discrimination in the valuation process beyond what I just stated. Based on the complaint there was no discriminatory behavior. I think the differences in values were due to the second appraiser selecting comps in a different area and not properly adjusting down for inferior subject condition. They may have done that because they knew they were the second appraiser and didn't want a complaint or lawsuit. Maybe the owner told them about the first lower appraiser and said she's filing a complaint. The second appraiser should have been reported to BREA and sued for bank fraud.

Based on my experience researching these cases discrimination is not the issue. The borrower just wanted a higher value. She probably got real estate agent, Zillow postcards in the mail saying "a "similar" home just sold for $1,500,000." "Find out what your home is worth today!" She assumed her home in fair condition would be worth the same when it's not. Agents do this to drum up business. If anyone has more information on this case, please, let me know.

Below is the main three page complaint from owner/borrower. The one from FHANC is almost identical. This is also in the pdf above.





Appraiser John Dorie sent me this information about fire code.

"The International Residential Code, IRC, Section R310 dictates the MINIMUM specifications for

a Sleeping Room. The International Fire Code, IFC, Section 1031 also specifies the minimum

regulations for Emergency Escape and Resue from Sleeping Rooms. Both Codes work in concert

without disagreement.

IRC Section R310.1 and IFC Section 1031.3 require all, “Basements, habitable attics, and every

sleeping room shall have not less than one operable emergency and rescue opening.”

IRC Section 310.2.1 and IFC Section 1031.3.1 and .2 require a minimum of 5.7 sf (net clear

height min 24", net clear width min 20") for the emergency and rescue opening.

IFC Section 1031.6 focuses on “bars, grills, covers and screens” covering possible escape and

rescue windows and doors and is specific stating, “Such devices shall be releasable or

removable from the inside without the use of a key, tool or force greater than that which is

required for normal operation of the emergency escape and rescue opening.”

Below is a sample State Information Act Request, Freedom of Information Act Request. Most Government Departments have forms you can fill out and submit online. You generally request the documents from the Public Records Act contact. I've been doing this with the cases I've covered in my blog.

"Dear Custodian of Record,

Pursuant to my rights under the California Public Records Act Government Code Section 6250 et seq., (or Freedom of Information Act if federal department) I ask to obtain a copy of the following, which I understand to be held by your agency:

(List specific and general items such as all communications, documents, data, files written and otherwise concerning person, address, complaint, lawsuit....)

I ask for a determination on this request within 10 days of your receipt of it, and an even prompter reply if you can make that determination without having to review the records in question.

If you determine that any or all or the information qualifies for an exemption from disclosure, I ask you to note whether, as is normally the case under the Act, the exemption is discretionary, and if so whether it is necessary in this case to exercise your discretion to withhold the information.

If you determine that some but not all of the information is exempt from disclosure and that you intend to withhold it, I ask that you redact it for the time being and make the rest available as requested.

In any event, please provide a signed notification citing the legal authorities on which you rely if you determine that any or all of the information is exempt and will not be disclosed.

If I can provide any clarification that will help expedite your attention to my request, please contact me. I ask that you notify me of any duplication costs exceeding $50 before you duplicate the records so that I may decide which records I want copied. I would prefer to receive the records including audio by email at ***.

Thank you for your time and attention to this matter."


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


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

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Friday, June 7, 2024

J P Morgan 2024 Midyear Commercial Real Estate Outlook by Mary Cummins Real Estate Appraiser

J P Morgan 2024 Midyear Commercial Real Estate Outlook, cre, commercial real estate, mary cummins, real estate appraiser, real estate appraisal, los angeles, california, al brooks, michelle herrick, victor calanog, market, interest rates, occupancy rates, retail, industrial, multifamily

Attended the J.P. Morgan 2024 Midyear Commercial Real Estate Outlook. SUMMARY: Currently some difficulties with commercial, office. Multifamily will do well as everyone needs a place to live. Industrial doing fine. Retail doing okay as most retail brick and mortar is also online. Near future outlook neutral to positive. Long term outlook is bullish. Cummins Real Estate Services , J.P. Morgan , Victor Calanog PhD CRE FRICS , Al Brooks , Michelle Herrick #JPMorgan #marycummins #realestateappraiser #realestateappraisal #losangeles #california #micheleherrick #charlesfedalen #chipfedalen #victorcalanog #albrooks #CommercialRealEstate #interestrates #realestatemarket #occupancyrates #banks #lenders

2024 commercial real estate midyear outlook

Moderated by Michelle Herrick, Deputy Head of Commercial Real Estate at JPMorgan Chase, our 2024 commercial real estate midyear outlook webinar featured: 

Al Brooks, Head of Commercial Real Estate at JPMorgan Chase

Victor Calanog, Global Head of Research and Strategy, Real Estate Private Markets at Manulife Investment Management 

Charles “Chip” Fedalen Jr., President at Irvine Company

The group discussed industry trends, opportunities and challenges ahead.

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


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

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Appraisal Institute Women's Initiative Committee Meetings by Mary Cummins Real Estate Appraiser

appraisal institute, women's initiative committee, win, mary cummins, real estate appraiser, real estate appraisal, meeting, appraiser, real estate, appraisal


Just attended the Appraisal Institute Women's Initiative Committee (WIN) Zoom meeting hosted by the Southern California Chapter. Lots of great women and men at the meeting discussing the appraisal industry and women appraiser issues. There were quite a few Appraisal Institute scholarship women at the meeting. Great seeing more women join the profession. Main speaker today was Melissa Bach, MAI CRE. Lianna Ayala, Linda Whittlesey, SRA, Ariana Arredondo and over 30 others hosted and attended. 

"The purpose and objective of the committee is to promote the advancement of women within the appraisal profession. In monthly Zoom meetings, we will host discussions of relevant topics, invite special guest speakers, network, and assess the unique challenges and opportunities we face. All are welcome to attend. Appraisal Institute membership is not required, and the Zoom meetings are free of charge. Meetings will be held the first Friday of the month, from 12-1pm via Zoom." Cummins Real Estate Services #appraisalinstitute #WIN #womensinitiativecommittee #marycummins #realestateappraiser #realestateappraisal


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


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

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Tuesday, May 28, 2024

Why Appraisal Values May Vary On The Same Property by Mary Cummins Real Estate Appraiser

mary cummins, real estate appraiser, appraiser, appraisal, los angeles, california, value, vary, different, higher, lower, lender, borrower, home, house

Why Do Some Appraisal Values Vary from Others on the Same Property? 

Lenders will order an appraisal so a borrower can get a home loan either for purchase or refinance. Sometimes the borrower doesn't receive the loan they want because of  credit, rates, terms or appraisal value. If they reapply for a loan, the second appraisal value is sometimes different than the first. 

There are many reasons why two appraisals may have different values for the same property. The differences could be due to changes in the market time or the property. In an appreciating market the second appraisal is generally higher because of the passage of time. The second appraisal could also be higher if the home has been improved. It's also possible that more similar homes have sold more recently for a different value than the previous sales used in the previous appraisal. This can be due to the seasonality of the real estate market and other factors. These different values don't automatically mean the first or second appraisal was wrong. Both values could be different and correct. Sometimes of course there are mistakes caused by incompetence. 

1. Home Price Appreciation/Depreciation in the Area

A real estate value is a snapshot in time. Recently we've been in an appreciating market.  Home prices have risen in value sometimes by 15% or more per year. If you appraise a say $100,000 property in January, it's worth $115,000 by the end of the year if appreciation for that area is 15%. The value didn't go up because you removed all photos from your home. It's appreciation. The same can happen with depreciation when values go down.

Some areas are going through the real estate cycle of revitalization which some call "gentrification."  Revitalization happens when people are pushed out of more expensive areas because of affordability into nearby areas which sell for less. This investment in the area and homes causes the area to improve and home prices to rise faster than surrounding areas. Many homes are then fully renovated by the newer owners and sell for much more than unrenovated original older homes. Recently some revitalizing areas have increased in value by 30% per year overall. This could mean an appraisal in December is 30% higher than one in January and both could be accurate market value for that time. 

2. Modifications to the Home

Sometimes after people are denied a loan for whatever reason they will improve the home. If you remodel a kitchen, baths, add air conditioning, a pool, a bedroom or add size to the home, the value after the modifications will be higher. If you gut part of your house to remodel it but don't finish, the value could go down. If you just remove personal photos, you won't change the value.

3. Recent Values of Similar Sold Homes

Sometimes some areas have few recent sales or listings of similar properties. People don't want to sell their home because of their low current mortgage rate like today's market. Sometimes there isn't much interest in an area because there is less demand because of issues which negatively affect the value. That could be a new freeway going right next to homes, loss of a major sports team, loss of major business and related jobs... Sometimes unique properties which are larger than the average home, built on a major road,  have odd improvements ... will take much longer to sell and rarely sell. Sometimes people prefer to wait for the selling season to sell to get higher prices. This means only mandatory sales of average homes take place such as death of owner, foreclosure or owner is desperate for money. These homes tend to be in fairer condition than most homes so they will sell for less. This drags down value.

Appraisers must use homes which sold within about the last three to six months within about a mile distance from the subject property in the same neighborhood. Appraisers are limited by the highest recent unadjusted sale of similar homes in the neighborhood. While appraisers can use older sold comparables and time adjust, some lenders still limit value to most recent closed comp. If the only homes that have sold recently are all major fixers, have fewer bedrooms, are not upgraded, don't have pools, are not right on the lake with a dock like the subject, this could limit the maximum value. The AMC, Lender set these limits. The appraiser must abides by them or the AMC, reviewer will send the appraisal back and demand comment and changes. In these situations lenders and appraisers suggest waiting for a similar higher priced property to close escrow before reappraising.

Quick example. The only homes that sold in the slow season in November, December, January were fixers in fair condition, no upgrades, no views, no pool and near a busy road. They sold for $100,000. The subject is in great condition, with many new upgrades, view of the ocean, pool and on a private cul-de-sac. It's clearly worth more than the recently sold total fixers maybe $150,000. Some lenders may limit the maximum valuation to the maximum sales price of similar sized homes recently sold in the same neighborhood, $100,000. If the borrower waits to refinance until April, May, June, there will probably be similar upgraded homes sold because more homes sell at this time of year. The value could be $150,000 based on sales in the $150,000 range. 

This brings us to the seasonality of real estate sales. Sometimes there are more homes sales during certain times of the year. Spring and early summer have more home sales as people prefer to sell, buy, move after school lets out before summer vacation. Sales volume is also related to weather. There are fewer sales in the winter where it snows or during heavy storms. Seasonality varies by area. This can cause there to be few similar sales during certain months of the year. The slowest months volume wise are November, December and January. The busiest are April, May and June. If you appraise your home for a refinance in November, there will probably be fewer sales to use as comps. It's also possible there are a higher percentage of stress sales during the slower months. Many stress sales are in fairer condition especially foreclosure and estate sales so they may sell for less which can negatively affect value. This article states seasonality can cause a 10% difference in price, value. There is more demand and buyers bidding against each other during the busy season which drives up prices. Some advise buying in the winter and selling in the summer for this reason. Besides seasonal cycles there are other cycles which affect sales volume and price such as economic cycles, interest rates, Covid pandemic, war, politics... This is reflected in the market by sales prices. The appraiser does not consider these things in the final valuation.

For this reason it's generally a good idea to see what similar homes have recently actually sold for in your area before applying for a loan to see if it makes sense. You will get a better rate, terms the lower the loan to value ratio so a borrower wants a higher appraisal value. While we include listed properties in the appraisal, sold properties are what matter. We generally search homes +/-15% difference in size per square foot, similar bed/bath count, similar amenities/upgrades/condition, within a mile distance from subject which sold within last three to six months. We then choose the most similar recent comparables. Lenders generally require three closed sales within three months. Those sales will limit the upper level of value.

4. Incompetence

Appraising homes can be a difficult complex process especially with unique homes in changing areas and markets. Many lenders use robot Automated Valuation Methods (AVMs) for cookie cutter homes. Cookie cutter homes are newer median priced average sized homes in average condition in a homogeneous area. If your home is older, larger than average for area, improved above/below most homes in the area, has a view, issues or is on the edge of two different areas, you will need a full appraisal. 

The appraiser must choose similar comps in the same neighborhood in order to get an accurate value. Sometimes there are no recent similar comps. The appraiser will have to use older similar comps instead of expanding the comp search into a totally different area. Those comps will have to be accurately adjusted for time and other differences. If the appraiser does not select similar comps, the resultant value will be inaccurate. That would be incompetence. Appropriate comp selection is vital.

One example of this is a case in Marin, California. The first appraisal was $989,000 February 2020. The second appraisal was $1,482,500 March 2020. The subject was larger than average for the area built with telephone poles on a very steep lot near reclaimed swamp land. There were few recent local sales because there was little demand in the area. The first appraiser used local sales. The second appraiser widened the search into an area with larger high quality homes that sell for almost twice as much in Mill Valley. 

The homeowners sued the first appraiser for "racial discrimination" just because they didn't like the first appraiser's lower value. The borrower wants a higher value because the higher the value, the better the terms and lower the rate. The first appraiser didn't do anything racist or discriminatory. The first value was similar to the robot values like Corelogic, RedFn... Robots can't be racist or discriminate. The second appraisal was actually the wrong value because they used the wrong comps. Borrowers never sue when the appraisal value is high even when it's wrong. If it's lower than what they'd like, they automatically assume bias or incompetence. Clearly it was the second appraiser who was biased and incompetent. Some appraisers fear complaints and want to please the lender, borrower so they tend to appraise on the higher side. I'd bet most appraisers over appraise than under. There is no motivation for an appraiser to appraise lower than market value. They have nothing to gain and everything to lose.

Here is one example which incorporates some of the factors which may cause two appraisals to be different. 

Appraisal One: Home appraised January 1 in area where it snows. It's in good condition, upgraded with two garages and a view. Home sales volume is low. The only recent sales were fixers with no garages or views selling for $100,000. Appraiser uses some old similar sales and time adjusts. Home appraises for $100,000. Appraiser notes that subject is in better condition with garages and a view. Appraiser explains the current market and lack of similar sales. Many appraisers would state home would appraise for more when/if similar homes close escrow. Appraisers generally state their limitations which can be the highest closed recent sale.

Appraisal Two: Home appraised June 1 when the weather is 75 degrees. Owner has since added a second bathroom. There are now some similar sales in the same condition with the same view. A new sports arena just announced it will break ground bringing a lot of new business and jobs to the area. The area has appreciated by 10% in six months for this reason. The home is now slightly larger and worth more. Similar homes now sell for $150,000. Home appraises for $150,000. The value of second appraisal is 50% higher than first. The first appraiser was not incompetent. Both appraisals were correct at the time they were made. This is why one must carefully read appraisal reports and consider all the factors that affect value.

Different appraisals done at different times can have different values and still be correct. There are many legitimate reasons for appraisals to vary in value by even 30% in a quickly changing market. It's natural for people to be psychologically attached to their home and assume it's the best in the area when that may not be true. Some homeowners receive agent postcards in the mail or see Zillow ads listing the highest sold and listed homes in their area. Agents, Zillow do this to attract sellers with potential high prices so they can get a listing and make money. Some borrowers assume their home which is in inferior condition and location is worth the same amount as those high priced listings when it's not. These false expectations cause people to feel they've been low-balled, cheated or discriminated against when they necessarily haven't. People who have been discriminated against for their entire life are more likely to assume discrimination. It's important to know your home and try to understand local value unbiasedly. It's also important to understand appraisal value when reading an appraisal report of your home.


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


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

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Sunday, May 26, 2024

Reply to ChanZuckerberg Affordable Housing Solutions. Couple Ideas Might Work but Rest Would Make it Worse, by Mary Cummins.

chanzuckerg initiative, chanzuckerberg,mary cummins,real estate appraiser, housing crisis, affordable housing, marc zuckerberg, solutions,nimby,zoning,housing,planning, office, adaptive reuse
chanzuckerberg initiative, chanzuckerberg,mary cummins,real estate appraiser, housing crisis, affordable housing, marc zuckerberg, solutions,nimby,zoning,housing,planning, office, adaptive reuse

I just read ChanZuckerberg's "7 Creative Solutions to Affordable Housing in California." ( https://chanzuckerberg.com/blog/affordable-housing-solutions ) These people are clueless about the real causes and solutions to California's housing crisis. Their article makes me think it's an AI article, i.e. "Please write an article about how to solve the housing crisis using inspiring, positive terms in 1,000 words or less." I will reply to each idea noting which are total bombs and which will actually help. 

"At CZI, we believe that, yes, California can solve its affordable housing crisis. We’ve seen several creative solutions to affordable housing work.""We’ve learned a lot over the years about how to solve California’s housing crisis. The solutions below are proof that, yes, it can happen."

If positive words and ideas could solve the problem, it would have been solved 50 years ago. This is not a new problem which they at least admit "This problem has been decades in the making." Many, many people have tried throwing inspiring words at the problem with no success.

1. "Exploring New Methods for Constructing and Producing Homes"

Construction costs aren't the main issue. The issue is the extremely high cost of land in California. California land value is 30-80% of the value of the home. Median home in California is $900,000 as of April 2024 compared to $400,000 for the US. In the rest of the affordable country land is generally 10 to 20% maximum of total home value. The high price of land was caused by, you guessed it, lack of development of sufficient housing units, i.e. the housing crisis. Lack of housing drives up home prices per simple supply and demand. Who cares if you just plop down a $50 prefab cubicle on the property if land costs $1,000,000 not to mention permit fees and California's costly, time consuming and difficult red tape. That's not affordable. 

2. "Encouraging Alternative Forms of Home Ownership"

First off, the author doesn't know what the word "redlining" means. Here's an article I wrote about it. ( https://mary--cummins.blogspot.com/2021/05/redlining-in-home-loan-financing-mary.html ) Back in the day redlining by lenders made it difficult for mainly white property owners to get property loans not people of color. Most property owners in the red line areas were white. The people who lived there were  mainly lower income tenants. Those tenants moved there because rent and homes were cheaper. Loans were not denied because of racial makeup of residents. It was based on many factors which caused low property values with higher maintenance costs and risk. These factors caused prices, rents to be low which is what attracted lower income people who are generally people of color. Research has shown that redlining doesn't affect properties today. People love to use the term to sound woke and DEI.

Their article includes racist stereotypes. Blacks, Latinos are not less likely to own homes just because they're black, Latino. People who make less money have less money and are therefore less likely to own a home. Blacks, Latinos make less money than whites. This is an income gap issue which has nothing to do with housing or access to housing. According to the scientific method in order to solve a problem you must first identity the problem. It's the income gap, stupid! Help all less wealthy people increase their income regardless of color, race and they can afford houses but first there must be enough houses to afford and own.

"Community land trusts, housing cooperatives or resident-owned communities, and more affordable condos like Tenancy in Commons" won't solve the problem. They need to be able to afford to rent, buy the homes. There need to be enough homes to buy. People with more money will be the ones buying the property trusts. You aren't helping the people who really need help.

3. "Advancing Cross-Sector Housing Solutions"

"They are collaborative efforts that address interconnected challenges in our communities — such as equitable access to housing, healthcare, transportation and economic opportunity." While this is a nice thought that could help some people it doesn't solve the problem of lack of housing. Equitable access doesn't help if there isn't enough housing. Equitable access goes back to the income gap or housing affordability.

4. "Learning From Successful COVID-19 Housing Solutions"

Were the Covid-19 "housing solutions" successful? Homelessness is up. Evictions are up. Rent is up. Mom and pop landlords couldn't afford to keep their buildings because the government forced them to subsidize their tenants' rent for years. They sold their buildings to big landlords. All tenants had to do was sign a form saying they couldn't pay rent. Many were still working and could pay but chose not to pay. For many landlords their tiny fourplex is their entire retirement savings and income. Many were just Mom owned and not Mom and Pop owned. The eviction moratorium actually made things worse. If people vacated during the moratorium, landlords refused to rerent the units for fear of lying Covid mooches. Those units stayed vacant for two years and people lost housing.

They suggested "sending cash aid to tenants and landlords to prevent evictions and foreclosures." Problem is you'd have to do this forever because most California wages don't cover rent and expenses. This again goes back to income and lack of housing problems which existed pre Covid. If we had more housing, housing costs would be lower. It's supply and demand.There is limited supply but high demand in this state.

5. "Transforming Surplus and Underutilized Lands Into Affordable Homes"

Now they're getting warmer. "We need to build homes at a sustainable rate to match population growth in the U.S. The Huffington Post reported that, despite population growth, fewer homes are now on the market than in 1982." Bingo! "One innovative way to address this extreme housing shortage is to convert surplus and underutilized lands — owned by school districts, faith organizations, government agencies, etc.— into permanently affordable housing."

I support this but there's a problem. If you build on government land you must have 100% affordable housing. This doesn't make economic sense and is not sustainable because property owners would lose money building and renting the units so they won't be built. Some projects I've seen wouldn't even allow some market rate units and some very low income units. Projects must make financial sense or it won't happen. The project I cited above died because developer said he'd lose too much money. Private businesses can't build buildings for free for the government. The government sure can't do it based on past public housing failures. We need real world economically feasible sustainable ideas not wishful thinking, thoughts and prayers.

Now if you alter zoning, planning, building restrictions for the entire state and not just some properties, that would help. Churches, schools, nonprofits, cities, counties have legal mission statements. They can only do what's in their mission statement. Church mission could be to help Christians in a certain parish. Nonprofit mission could be to help low income abused women. They also have a lot of restrictions and their own red tape. Make it statewide and everyone could be helped.

6.  "Leveraging Infill Housing and Densifying Neighborhoods"

They're getting warmer again. "Infill housing refers to building new residential units on vacant or underutilized lots within existing urban areas or neighborhoods. These types of housing can include accessory dwelling units or ADUs, splitting lots, conversion of non-residential buildings, and demolishing and rebuilding on vacant lots or parking lots within neighborhoods."

As I've said for years "we can't ADU our way out of the housing crisis." While ADUs help they are expensive per unit and don't create enough units. One great idea is conversion of non-residential buildings like office, industrial, warehouse buildings and shopping malls. The problem here is government red tape, zoning, planning, Building and Safety requirements and of course NIMBYs. There are also logistical office conversion issues which I explain in this article ( https://mary--cummins.blogspot.com/2022/02/office-to-housing-conversion-is-not.html ). 

Haney Bill AB 3068 titled "Adaptive reuse: streamlining: incentives" could help and must be passed. "By mandating by-right approval processes for mixed-use housing conversion projects in city centers, AB 3068 will pave the way for the construction of several thousands of new housing units." This is what we need.

7. "Preserving Existing Lower-Cost Housing"

And now they're ice cold. This is one of the causes of the housing crisis and not a solution! "An often overlooked piece of the solution to this challenge is to protect what’s referred to as naturally occurring affordable housing — existing, affordable multifamily rental properties. These buildings tend to be older and owned by mom-and-pop landlords." 

If property owners were allowed to tear down a run down small rental home or four unit building to build 12 new larger units which house fives times as many people 20 or 30 years ago, those units would be affordable housing today. Older buildings costs less to rent than newer ones. Instead many people lost housing for 20 to 30 years because property owners were not allowed to build more units. It was either too cost prohibitive or difficult because of rent control tenants, NIMBYs, government red tape or long construction times which equal higher construction costs. Government, economy also lost billions in loss of property taxes, revenue, business tax from loss of more rental income from more units. If they build those 12 units today, land cost is up 1,000%, construction costs are up 500% so they must rent it for full new market rent which is at least triple affordable rent or what an older building would rent for today. 

They state preserving existing affordable housing will prevent "private equity (from buying) out owners and raise rents quickly — displacing existing residents, exacerbating gentrification, and contributing to homelessness." Wrong. Forcing small landlords to pay their tenants rents for over two years during Covid caused moms with no pops to have to sell their buildings to large landlords who will push out those tenants.

Rents have risen because there's not enough housing! People move around all over the world to places they can afford. It's economics 101. They also clearly don't understand the meaning of the word "gentrification." I wrote another article here about gentrification ( https://mary--cummins.blogspot.com/2017/04/real-estate-cycles-mary-cummins-real.html ). Gentrification is actually just the real estate cycle of revitalization which is GOOD for communities. People are pushed out of, displaced from more expensive areas because of high costs caused by the housing crisis. They go to nearby areas which cost less. This causes those areas to improve and property values and rents rise. Owners who live there or sell their properties are happy about this! A few lower income tenants aren't happy because their rent rises. Most tenants would move to another low income area, rent a smaller place, share a place with friends, try to make more money... Most would not end up homeless. The people who move out of those cheap rent areas are generally POC because of the income race correlation and not because of race. Poor whites have to move too. Housing is not the main cause of homelessness. There are many factors including mainly steady income, savings, physical/mental health, family situations, having children, legal issues... 

I'm amazed they didn't specifically mention rent control in this item though it's part of preserving older low income units. We have rent control in many cities, counties and the state of California. Rent control actually causes rents to rise overall. I wrote an article which explains this ( https://mary--cummins.blogspot.com/2024/04/rent-control-causes-rent-increases-loss.html ). It also costs cities, counties, states and individuals billions of dollars in lost income every year. That money paid to the government could have been used to help the housing crisis. Rent control doesn't even help low income people. While some are lower income most are not. They could easily afford market rent but stay put for many years and save or spend that money on other things. The private landlord is subsidizing their tenants. Some are paying $350/month for a $3,500 unit. I've seen some tenants buy a house with the rent savings all at the expense of the landlord.

In conclusion the ChanZuckerberg article states "With continued support for innovative housing solutions like the ones shared above, we can improve housing affordability and access so people from all backgrounds and income levels can live, work, and thrive."

Most of their suggestions not only don't help solve the problem but make it worse. They need some real estate experts with experience to help them. Many think landlords, developers, people in real estate are "evil," "greedy" "scum." They're not. It's a profession just like being a secretary or doctor. They're actually trying to solve the housing crisis and just end the scapegoat, whipping boy. This is probably why no real estate people were involved in ChanZuckerberg's project or article which is a shame. Maybe they could have come up with effective solutions if they had.

Some Real Solutions to the Housing Crisis

Now for some solutions which will actually help the housing crisis in California. BUILD MORE HOUSING! Reduce development red tape and construction times for new construction, conversions and additions. Zoning, Planning, Cities, Counties and the state must allow more housing and more dense housing in some areas. We could use more legal micro-units, communal units with less mandatory parking if near public transportation. I'm not talking about building a 20 unit building on a smaller home site with only single family homes in the area. I'm talking building 2-4 units (or 2-3 ADUs behind a house) on some single family sites in some areas and build 2-8 units in areas that already have duplexes, fourplexes and are zoned for multifamily R2+ zoning. 

Pass the Adaptive Reuse bill to more easily convert office buildings into residential units. Planning and Zoning needs to quickly modify zones and uses to allow more legal uses especially mixed use zones. Building and Safety must modify some residential requirements to make these projects feasible while still maintaining health and safety. Many more office buildings could be reused this way instead of demolishing them, wasting materials and contributing to climate change. Right now an older office building must be brought up to residential code. If it's older, it's cheaper to demolish or gut to the shell and rebuild which is a waste and horrible for the environment. This can't be done with historic buildings or buildings in HPOZ so they can't be considered.

Most importantly don't allow NIMBYs to stop projects if they meet all regulations. NIMBYs have been extorting developers and cities for years with demands and many were mainly for the benefit of the specific local NIMBYs alone. The approval process takes years because of NIMBY involvement. Their goal is to cause it to become so expensive that developers abandon the project which they do frequently. Just because a NIMBY has a place to live doesn't give them the right to not allow, take away housing from others who don't.

A last related issue is helping people make more money to keep up with housing costs. You need two people making minimum wage in Los Angeles to afford a cheap median one bedroom $2,100. A single person can't afford a one bedroom on minimum wage which is actually high compared to the rest of the nation. This is another reason we need cheaper microunits, communical living units with shared kitchens, living rooms and more studios, singles.

In conclusion we need more than just inspiring words and pie in the sky ideas to solve the housing crisis. Some of ChanZuckerberg's ideas would actually make things worse. The housing crisis has existed for over 50 years because there hasn't been enough residential development. There hasn't been enough development because of government red tape and NIMBYs. We need to work with developers, builders to construct the housing that we desperately need. JUST BUILD MORE HOUSING!

**UPDATE: I just asked chatgpt to write an article stating how to solve the housing crisis in California. It wrote a very, very, very similar article to ChanZuckerberg Affordable Housing Solutions article. The same word salad, similar major ideas, same two bad ideas, sound bytes, woke language and wishful thinking. The only difference is item one was increase housing supply which included sub ideas I suggested. Chatgpt article made much more sense than ChanZuckerberg article and it was free.

Who wrote ChanZuckerberg's article? A lazy employee using chatgpt? Is this some stunt by Zuckerberg? Did they hire people for a task force and pay them thousands per month for a few months to come up with this article? If so, I could see how so much money gets wasted on trying to fix the housing crisis and homeless situation with no actual results. 

#housingcrisis #housing #affordablehousing #marycummins #realestateappraiser #california #adaptiveresuse #officebuildings #losangeles #realestateappraisal 

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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 40 years of experience.


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

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Friday, May 24, 2024

False Bias Claims Against Appraisers - Six Main Cases in the Media by Mary Cummins Real Estate Appraiser

mary cummins, real estate appraiser, real estate appraisal, los angeles, california, bias, discrimination,race, racial, white, black, latino, andre perry, hud, george floyd, lowball, lowball, 

Below are five of the main falsely alleged racial bias cases against real estate appraisers. When I heard about the first case I assumed the appraiser maybe was racist or was incompetent. Who would make such a hurtful false claim if it weren't true? I would have been the first to take the appraiser out behind the proverbial woodshed for a talking to.  

After fully researching the properties and values, I realized the claims were false. I continue to research new cases and have not found one yet where the lower appraiser was in the wrong. I definitely found no biased or racist behavior on the part of the lower appraisals. I have found that the second or higher appraiser has been in the wrong either through bias or incompetence. If I knew who they were and had a copy of the report, I would report them.

In these cases the borrowers truly believed that they had been discriminated against. I understand after a lifetime of discrimination one could assume anything they don't like is the result of discrimination. Sometimes though there is a perfectly good explanation for something we don't like that has nothing to do with race, color, gender... 

I did notice four similar things with all of these cases. One, the homes all have complex physical issues. Two, the homes are all located on the edge of neighborhoods nearer to higher valued areas. Three, property values were rising quickly. Four, some of the homes had external factors which greatly affected value. These four factors make for a complex appraisal assignment. If the correct comps are not chosen, evaluated, adjusted properly, values could vary by a large amount. The end result could be incompetence in the form of a higher appraisal.

The first issue has to do with complex physical characteristics of the subject property. Something that I noticed with all of these cases is that they're not newer homogeneous tract homes. All of these homes are complex. The homes are complex because some are much older, in C4-C6 (fair) condition, have unpermitted additions, illegal bedrooms/bathrooms, are on severe slopes, were built to Q5-Q6 quality (low), built on reclaimed swamp land, have varying views... The difference in value could be attributed to differences in actual legal size, real bed/bath count, view, condition or upgrades compared to other homes which sold for more. 

The second issue has to do with the homes being located nearer to the boundary of two dissimilar neighborhoods. This caused the second higher appraiser to choose non-comparable comps in a totally different neighborhood than the subject. The Marin case is a prime example of this. There were few larger recent sales in the same area because most homes are smaller and there were few sales overall. The higher appraiser chose comps in Mill Valley which has more larger homes which sell for twice as much as Marin. They are not comparable areas to say the least. It's like comparing homes in South Los Angeles to Beverly Hills.

The third issue is quickly appreciating values. All of these cases happened when homes were appreciating over 15% per year. If you appraise a $100,000 home January 1 for $100,000 then appraise it again 12/31 of same year, the value would be $115,000. That doesn't mean the first appraiser low-balled $15,000. Both appraisals are correct. Sometimes the area was also revitalizing (some call it gentrification) so values went up 25-30% per year. Revitalizing happens when people are pushed out of more expensive areas into nearby less expensive areas causing the area to improve and property values to rise. 

The fourth issue is external factors which greatly affect value such as location on a busy highway (Maryland case). Homes located on busy highways are worth less than homes located on cul-de-sacs, private lanes, small residential streets and streets with no through traffic. Another example is homes built on reclaimed swamp land on unbuildable sloped inclines (Marin case). Yet another example is homes a mile from the ocean near the freeway being compared to homes on the ocean with a full ocean view and  a boat dock (Florida case). 

There is another issue which contributed greatly to these false complaints which is not related to the actual appraisals or homes. It is Andre Perry's false, fabricated, misleading paper and book titled "Know Your Price." Andre Perry falsely stated that racist real estate appraisers lowball black people's homes by $46,000 per home just because appraisers are all "white male racists." Appraisers weren't even involved in the data used by Perry. The truth is people who make more money have more money and buy more expensive homes in more expensive areas. They also buy more expensive cars, clothes, jewelry... Whites make more than blacks and Latinos. Most of that racial wealth gap is actually reflected in higher earners. No homes were low-balled in Perry's data. People read articles about the paper and assumed it was true. Politicians even used the faked paper to campaign to black people for votes and campaign donations. 

In all of these huge false appraisal bias cases in the media we had a borrower who automatically assumed racism, a home with intrinsic, extrinsic negative value issues located in a revitalizing appreciating area near a neighborhood which is worth much more. All of these factors combined contributed to a huge explosion of misdirected hate against appraisers especially after George Floyd's murder and Andre Perry's fake paper. It will take years to deal with the false narrative of the alleged "racist old white male" appraiser.  The media is directly complicit for wanting to sell advertising to make money by inciting racial divide and hatred with their misleading stories. I didn't see one article where they had an appraiser review the appraisals or give their opinion of the cases. I contacted the writers and no reply. Shame on the media for promoting false hateful racist stories.


Marin, California

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

Indiana

https://mary--cummins.blogspot.com/2021/05/homeowner-claims-discrimination-in-home.html

Florida

https://mary--cummins.blogspot.com/2020/08/black-homeowner-claims-discrimination.html

Oakland, California

https://mary--cummins.blogspot.com/2021/07/racial-discrimination-alleged-by-cora.html

Allendale, Oakland, California

https://mary--cummins.blogspot.com/2024/06/details-about-alleged-racial-bias-case.html

Maryland

https://mary--cummins.blogspot.com/2023/01/maryland-lawsuit-alleged-racial.html


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.


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