Appraisal Subcommittee Hearing on Appraisal Bias January 24, 2023, notes by Mary Cummins

Appraisal Subcommittee Public Hearing on Appraisal Bias, January 24, 2023, marcia fudge, mary cummins, asc, hud, real estate appraiser, pave taskforce, cfwb, jim park, race, racial bias, discrimination, black, brown, white, value, neighborhood, appraisal, valuation

https://www.consumerfinance.gov/about-us/events/appraisal-subcommittee-hearing-on-appraisal-bias/

https://www.youtube.com/watch?v=QW8ADw9vOSc

Appraisal Subcommittee Hearing Meeting about Appraisal Bias in Residential Real Estate Market ASC notes, comments by Mary Cummins. Part of the meeting was on C-SPAN 2.

Time: 2:10:35

“Streamed live on Jan 24, 2023. Join the Federal Financial Institutions Examination Council’s Appraisal Subcommittee (ASC) for a hearing about appraisal bias. Invited witnesses representing key stakeholder groups will share their views with the ASC during the hearing.”

Official information and files.

The Federal Financial Institutions Examination Council’s Appraisal Subcommittee (ASC) held a hearing about appraisal bias.

"This first-ever ASC hearing was led by Deputy Director Martinez and ASC Executive Director Jim Park. HUD Secretary Marcia L. Fudge, CFPB Director Rohit Chopra, and FHFA Director Sandra Thompson also participated in the hearing. Panel witnesses included:

Dr. Junia Howell, Visiting Assistant Professor of Sociology at the University of Illinois Chicago; Witness Testimony. It'd be better to read her testimony because she was extremely nervous, waving her arms around wildly, misspeaking and acting agitated. Most upsetting and more importantly she stated some totally false and ignorant things. She said the sales comparison approach was developed in the 1930s by whites in the US government to intentionally value white owned property higher than POC owned property. She doesn't even realize that most living in areas which were, are primarily POC especially back then were, are renters and not owners. There are also poor white areas in the US. How does she explain that? The sales comparison approach to value is the main method used to value all assets all over the world since the beginning of time. She said the government should basically give more money to her to do more deeply flawed "research." It appears that all speakers had to swear to the host of the meeting that they will only agree with the government's incorrect and preconceived ideas on the issue of the alleged "appraisal" and wealth gap. She's so ignorant she doesn't realize it's caused by the income gap and not appraisals. Lots of independent research out there to prove this. People buy homes they can afford. People who make less money but less expensive homes.

https://files.consumerfinance.gov/f/documents/cfpb_appraisal-hearing_junia-howell-testimony_2023-01-24.pdf

Paul Austin and Tenisha Tate-Austin, homeowners from Marin, California; Witness Testimony 

https://files.consumerfinance.gov/f/documents/cfpb_appraisal-hearing_paul-austin-and-tenisha-tate-austin-testimony_2023-01-24.pdf

Michael Fratantoni, Senior Vice President of Research and Technology and Chief Economist, the Mortgage Bankers Association; Witness Testimony 

https://files.consumerfinance.gov/f/documents/cfpb_appraisal-hearing_michael-fratantoni-testimony_2023-01-24_Tw7XwtE.pdf

Craig Steinley, President, the Appraisal Institute; Witness Testimony 

https://files.consumerfinance.gov/f/documents/cfpb_appraisal-hearing_craig-steinley-testimony_2023-01-24.pdf

More information about the Appraisal Subcommittee can be found here" 

MEETING START

Time: 6:29 Introduction by Zixta Martinez Chair of Board of ASC and CFPB. Jim Park will talk about ASC. We’ll hear from a panel of witnesses, a home owner, lender, appraiser and academic. She introduced Marcia Fudge head of HUD.

Time: 9:28 Honorable Marcia L Fudge of HUD and PAVE. I'm only going almost word for word what Fudge said because it's so important. Fudge makes her own personal bias very clear in what she said and the falsehoods she stated.

Fudge said “good morning” and got a mild response. She basically responded she didn’t like the mild response and again said “GOOD MORNING!” and everyone then responded with “GOOD MORNING!” It set the tone.

Since day one the Biden Harris administration has worked to root out bias in the appraisal system. The work is critical to advance racial equity. It’s important to me as secretary of HUD and as a black woman. I know first hand what it’s like to be told that your home is worth less than the house down the street because of the color of your skin. It’s heartbreaking to hear the stories of black and brown families who feel forced to remove family mementos and photos in hopes of receiving a fair and accurate valuation. I do not intend to do that!

Fair Housing Act of 1968 was to end housing segregation. Owning a home should provide a path to the American dream. Instead this country does not see us as equitable. June 1, 2021 100 years after Tulsa Race massacre Biden and Harris established PAVE task force a first of its kind initiative to root out racial discrimination in the home buying process so families of all backgrounds and neighborhoods can have a better chance at building generational wealth. Less than a year after PAVE was established we delivered an action plan which constitutes set of reforms to advance racial equity in the home appraisal process. We want to cultivate a well trained and diverse work force, to make sure technology doesn’t perpetuate bias. HUD made $28M available to fund testing, education, and outreach to communities on appraisal bias. Next week we will start a three part webinar on training for appraisers and housing professionals on how to identify bias and protect homes. We, (pointing to herself), know how to identify it as we see it every day. We are giving an avenue for FHA loan seekers, if they believe their appraisal was skewed by racial bias. You can make comments on our drafting table platform. Please, make comments. 

I’m going to say things not in my script because I live this every day. I live in a black community by choice, BY CHOICE! I want kids in my neighborhood to get same schools as properties next to me. You do that by property tax even though I think it’s unconstitutional, that we fund schools by property tax. I want same police, fire protection but you can’t do it if my house is valued at $50,000 less than the house next to me. Two doors from me there is a neighborhood that is all white. My house is bigger, my lot is bigger, my house is nicer (laughter). That (other) house is valued more than mine. This is not the America that we should be living in, in the year 2023. It is a travesty, outrageous and we must change it. I’m hopeful the ASC will do what is right for the American people.15:44.

Mary Cummins comments. Homes are not valued differently because of the color of the skin of the owner, borrower or occupants. It's a mathematical formula based on most recent similar sales in the same neighborhood. Appraisers don't know the color of skin of homeowners, borrowers, tenants, buyers, sellers. We don't see the borrower, buyer and definitely don't know who owns properties in the area we use as comparable sales. We don't look at census tracts. We don't know race or color. It's possible all the owners of the homes we used as comp sales for a property owned by a black person were white. That would mean Fudge's false narrative holds no water. 

Fudge states she wants home values and their property taxes to increase. Many poor people would be forced to sell their property and move if property taxes were increased to the level of newer more luxury expensive neighboring properties.They wouldn't even be able to sell their property for the higher non market value. That would be beyond unfair and cruel.

All real estate agents tell all home owners of every color to remove personal articles such as photos, collectibles and other items from their home.It shows the home bigger and better. Buyers don't want to see any homeowner in the home. They want to envision themselves in a blank slate of a home. It's not about race.

HUDs PAVE report was late. It was due in six months. Fudge acts like she finished it early in less than a year. Nope. Late. 

Appraisal appeal, reconsideration of values have ALWAYS been available to borrowers forever. They can appeal based on any reason. They have done this. This is not about bias. Research by AEI based on government loan documents proved there is no effect of race on home value. They used the government's own data to show this. AEI presented this to the government in the meeting about the PAVE task force. 

AVMs Automatic Valuation Methods do not consider race or color of homeowner or borrower. It's a math formula, technology computed by robots. No human is involved. The math formula is not based on race or color. It's based on location, size, age. It does not know condition, view, upgrades, amenities, true size, additions, lot type, location in neighborhood... AVMs value homes in poor condition higher than market. It values upgraded homes with views lower than market. AVMs aren't accurate. They are BIASED against everyone.

Fudge brought up her home value previously. She said her home is worth less BECAUSE SHE IS BLACK. I included it in a past article with address and attributes. I included a valuation of her home and of the NEW, LUXURY homes up, across the street from her. It's a private development of new luxury homes tucked away off the main street. I have no idea if the homeowners are all white. I doubt Fudge does either. Has she visited all of them personally? They're new so they're not in the census report. There is a reason why those homes are worth more. They're new, luxury, in a new development, with a clubhouse, off the main street... Not all homes of the same size in the same county are worth the same. An old run down home in South LA is worth less than a new one of the same size in Beverly Hills. If Fudge doesn't know this, she must resign because she's unqualified. I know she knows this and is just lying for effect. She's a politician working for politicians selling lies for votes, money and promotions.

The real reason why homes owned by whites are worth more than homes owned by black, brown people is the income gap. People who make more money have more money, more generational wealth and can buy and own more expensive homes. THIS IS THE REAL ISSUE! The government needs to fix the income gap then the wealth gap would solve itself. Men also make more than women. Blaming appraisers will never fix the real issue. The government can't fix the problem (if there even is one) until they admit the real cause of the problem. The first step Scientific Method to solving problems is to determine the actual problem.They clearly don't want to fix the real problem. That means the government doesn't really care about POC or the poor. They need to stop pretending like they do care when they clearly don't. You can yell at appraisers all the live long day and that won't solve the problem. 

I'll post notes from rest of the meeting letter. I will also be sending in a comment. I see some of the speakers are the Austins from California. I have covered their case since the beginning. In their linked statement they said they wanted the appraiser to use comps from the "white area" instead of their immediate neighborhood which they said is a "black area." Who are the racists here? 

There were five witnesses who basically read word for word their submitted statements linked above except AI Craig Steinley. He omitted a large portion of his written statement. I think he omitted it because he didn't want questions and to get under five minutes. While other speakers said we need to get rid of the "racist" government mandated sales comparison approach AI's statement said they are adamantly opposed to that. Their statement says the approach is based on valid and accurate economic principles which it is. That is how all assets in the world have been valued forever because it is based on supply and demand between buyer and seller. I'll do a short summary in a few minutes anyway. 

After that ASC members were allowed to ask ten minutes worth of questions each.

Email after the meeting

“Yesterday the Appraisal Subcommittee held its first ever Hearing on Appraisal Bias, hosted at Consumer Financial Protection Bureau headquarters in Washington D.C. 

The event opened with remarks by U.S. Department of Housing and Urban Development Secretary Marcia L. Fudge. ASC’s Executive Director James Park spoke on the agency’s role in the appraisal regulatory landscape. 

Attendees, both in person and on the livestream, heard testimony from Dr. Junia Howell, University of Illinois-Chicago, homeowners Paul Austin and Tenisha-Tate Austin, Michael Fratantoni, Chief Economist, Senior Vice President, Research and Industry Technology, Mortgage Bankers Association, and Craig Steinley, President of the Appraisal Institute.

Now ASC wants to hear from you! You are encouraged to provide a comment on your perspective on or experience with appraisal bias; comments can be submitted to AppraisalBiasHearing@asc.gov until February 8, 2023.”

Four of the five witness speakers, Appraisal Subcommittee Public Hearing on Appraisal Bias, January 24, 2023, marcia fudge, mary cummins, asc, hud, real estate appraiser, pave taskforce, cfwb, jim park, race, racial bias, discrimination, black, brown, white, value, neighborhood, appraisal, valuation

Witness Dr Junia Howell, Appraisal Subcommittee Public Hearing on Appraisal Bias, January 24, 2023, marcia fudge, mary cummins, asc, hud, real estate appraiser, pave taskforce, cfwb, jim park, race, racial bias, discrimination, black, brown, white, value, neighborhood, appraisal, valuation

Tenisha Tate Austin, Paul Austin, Appraisal Subcommittee Public Hearing on Appraisal Bias, January 24, 2023, marcia fudge, mary cummins, asc, hud, real estate appraiser, pave taskforce, cfwb, jim park, race, racial bias, discrimination, black, brown, white, value, neighborhood, appraisal, valuation

ASC members, Appraisal Subcommittee Public Hearing on Appraisal Bias, January 24, 2023, marcia fudge, mary cummins, asc, hud, real estate appraiser, pave taskforce, cfwb, jim park, race, racial bias, discrimination, black, brown, white, value, neighborhood, appraisal, valuation

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 LinkedIn
• Mary Cummins Meet up
• Cummins Real Estate on Facebook
• Mary Cummins Real Estate blog
• Cummins Real Estate on Google maps
• Mary Cummins of Animal Advocates
• Mary Cummins biography resume short
• Mary Cummins Real Estate Services
• Animal Advocates fan page at Facebook.com
• Mary Cummins
• Mary Cummins Animal Advocates on Flickr photos
• Mary Cummins Animal Advocates on Twitter.com
• Mary Cummins on MySpace.com
• Mary Cummins on YouTube.com videos
• Mary Cummins of Animal Advocates on Classmates
• Mary Cummins on VK

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

"Appraisers the Convenient Scapegoats," comment by Mary Cummins Real Estate Appraiser

appraisersblogs, appraisers the convenient scapegoats,appraisersblogs, mary cummins, real estate appraiser, real estate appraisal,los angeles,california,aei, american enterprise institute, hud,racial discrimination,poc,andre perry 

Great article, "Appraisers the Convenient Scapegoats." It's happening yet again as home prices decrease. American Enterprise Institute (AEI) just warned the public in a December 2022 report "Government lending policies are encouraging lower-wealth, cash-constrained homeowners to give up their valuable current low-rate mortgages and use cash-out refinances to meet other financial obligations. This use of “the house as an ATM” particularly during this rising mortgage rate environment can pose inherent risks for borrowers."

And who will be blamed when these people refinance then can't afford the new payment because of the recessionary economy? Appraisers...again! We were blamed for the Great Recession aka Great Financial Crisis. Today they say that was actually because of "racial discrimination by appraisers."

These people are intentionally misinterpreting statistics. Yes, POC are more likely to lose their homes in foreclosure but it's not the fault of appraisers. It's a fact POC make less income than whites. People with less money buy less expensive homes. Politicians should fix the income inequality if they really care about POC. They won't because that's too hard and it's easier to blame appraisers. Because of income inequality POC have less wealth, fewer assets, higher debt and no generational wealth. They generally put a low down payment with the help of government loans. They were also encouraged by the government to get student loans to "get an education to increase income and wealth" which hasn't worked. They just ended up more in debt. The government is actually the one making these people more poor by causing them to lose what little money they have.

When these people refinance, they take out and spend all their home equity while increasing their monthly payment sometimes above their ability to easily repay it. The government even tells them it's a great way to get rid of expensive credit card debt which encourages more credit card debt. Values go down and they owe more than the home is worth. When you have no emergency savings, other assets, home equity and have an emergency, you will lose your home in foreclosure.

It's not the fault of appraisers! Politicians, other say these lies to win votes and support from POC and low income people. They created this non existent racial problem just so they can say "I alone can fix it." They hire like minded people to run HUD and other government programs. These people encourage and spread the false "government backed" narrative. They promote Andre Perry's fake "paper" about racial disparity in home ownership. Years back we were just "deal killers." Now we're all allegedly "racists." 

The "racist old white male real estate appraiser" is a false narrative. The public doesn't seem to realize the real correlation between race and home valuation is race = income = wealth = value of home you can afford to buy and own. It's not race = home value made by racist old white male appraiser. The causation of the value of black, brown owned homes is INCOME and not RACE as proven by independent research by AEI and others. Same goes with cars. More white people own expensive cars than black, brown for same reason. Maybe they should blame Kelly Blue Book for the difference in values between a mint 2022 Rolls Royce and a 1985 Ford Escort in poor condition with 300,000 miles. Maybe Kelly Blue Book should be called a RACIST instead of a software program. The data people cite in this case didn't even come from old white male appraisers. It's a software program that doesn't know race or color. People just prefer to believe their house is worth less only because of a racist old white male appraiser. If people want to fix the problem, fix the income gap between white and black, brown. Attacking appraisers doesn't solve the problem. #realestateappraiser #falsenarrative #homevalue #homevaluation #realestateappraisal #race #income #wealth #generationalwealth 

Cummins Real Estate Services, American Enterprise Institute, #appraisersblogs #marycummins #realestateappraiser #realestateappraisal #AEI #HUD #appraisers #discrimination

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 LinkedIn
• Mary Cummins Meet up
• Cummins Real Estate on Facebook
• Mary Cummins Real Estate blog
• Cummins Real Estate on Google maps
• Mary Cummins of Animal Advocates
• Mary Cummins biography resume short
• Mary Cummins Real Estate Services
• Animal Advocates fan page at Facebook.com
• Mary Cummins
• Mary Cummins Animal Advocates on Flickr photos
• Mary Cummins Animal Advocates on Twitter.com
• Mary Cummins on MySpace.com
• Mary Cummins on YouTube.com videos
• Mary Cummins of Animal Advocates on Classmates
• Mary Cummins on VK

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Background

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

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

AEI replied to Freddie Mac's study.

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

2. Appraisers: Industry Diversity and Alternative Methodologies

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

3. Appraisals: Evidence of Racial Home Devaluation

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

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

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

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

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

4. Industry Regulation

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

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

5. Administrative Action

A. PAVE Task Force Report

The PAVE Task Force Report was just released. 

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

B. ASC report

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

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

C. DOJ Statement of Interest in case Austin v Miller

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

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

6. Legislative Proposal

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

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

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

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

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

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

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

Link to actual proposed new Bill.

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

Video of the meeting for new bill

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

Proposed testimony for the meeting

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

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

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

Mary Cummins 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 LinkedIn
• Mary Cummins Meet up
• Cummins Real Estate on Facebook
• Mary Cummins Real Estate blog
• Cummins Real Estate on Google maps
• Mary Cummins of Animal Advocates
• Mary Cummins biography resume short
• Mary Cummins Real Estate Services
• Animal Advocates fan page at Facebook.com
• Mary Cummins
• Mary Cummins Animal Advocates on Flickr photos
• Mary Cummins Animal Advocates on Twitter.com
• Mary Cummins on MySpace.com
• Mary Cummins on YouTube.com videos
• Mary Cummins of Animal Advocates on Classmates
• Mary Cummins on VK

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

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,

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. 

UPDATE: This blog article has been removed from Google search. I assume it's because of the below. The article was greatly shared because it proves that Marcia Fudge is incompetent and should not be head of HUD. If she's not incompetent and knows home values, then she's a liar and a racist. We really don't need a racist to fight racism by being racist to others. 

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 assume this was her father's home. I think he died and left it to her as generational wealth because she was the only surviving child. 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? Here is Zillow's Zestimate 

Below is Marcia Fudge's home on the main highway.

Below is the gated community across the street.It's off the main road in a private dead end development.

"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!"

Below is a map with values, home sales on it. You see the private development across the street. Homes there sell for $260K to $330K. Smaller vacant land in the development sells for $125K.

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 LinkedIn
• Mary Cummins Meet up
• Cummins Real Estate on Facebook
• Mary Cummins Real Estate blog
• Cummins Real Estate on Google maps
• Mary Cummins of Animal Advocates
• Mary Cummins biography resume short
• Mary Cummins Real Estate Services
• Animal Advocates fan page at Facebook.com
• Mary Cummins
• Mary Cummins Animal Advocates on Flickr photos
• Mary Cummins Animal Advocates on Twitter.com
• Mary Cummins on MySpace.com
• Mary Cummins on YouTube.com videos
• Mary Cummins of Animal Advocates on Classmates
• Mary Cummins on VK

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

Interview President Appraisal Institute Jody Bishop by Mary Cummins Real Estate Appraiser

https://www.youtube.com/watch?v=HaFfhOo1Edk&t=1830s

"Today’s (February 2, 2022) Buzzcast interview is with Jody Bishop, the new President of The Appraisal Institute. We sat down with Jody and Joan Trice, Founder of Allterra Group, LLC to discuss what the outlook for the Appraisal Institute is for 2022 and what appraisers can expect from their initiatives."

You can go to the video, click the three dots bottom right then view the transcript. Joan Trice JT asked the questions and Jody Bishop JB replied. Below are my notes.

JB: The AI Board couldn't get together until May for a few reasons I won't mention. We used a consultant to handle the meeting to be neutral. We have five top priorities: modernizing education and production, new technology and social media, develop plan to recruit and retain professionals, implement PAREA and develop diversity equity and inclusion action plan. It's time to work to meet our goals. We need a cultural shift to refuse other ideas so we can finish the top 2, 3 or 5 goals. Then we'll be successful.

JT: What about the diversity program?

JB: We already have some effort with the appraisal diversity initiative ADI. Someone gave $3M to the program for the next three years. The National Urban League held symposium to recruit women and POC. We gave grants for initial licensed education, textbook. We started a women's initiative committee a while back. Hope to have a plan by Q3. 

JT: Will AI be matching candidates with supervisors? 

They will take an AI class. We're working on PAREA. AI was given/gave? $500K to write a program on producing PAREA. We will have students do a robust case study. It will take them through an appraisal of a house. We will have mentors going through the program. They should be highly trained after process. (They will do only one home appraisal? Maybe they need to at least do one home, one condo, one 2-4 units?)

Commercial by AI. Become a member today! :-D Their membership has gone from 25,000 to 17,000 today. They've lost almost 30% of their members while their salaries, expenses and travel expenses have increased.

JT: What is your personal agenda, strategic plan?

JB: I have to give board information they need to make decisions. I have to make sure they don't get distracted with other items. We're working through a cultural shift. Other goals are better communication and messaging. 

JT: There is the clear report, appraisal subcommittee report, review of USPAP, Fannie Mae just launched their study on racial bias, PAVE report coming any minute. Any thoughts where PAVE will come down?

JB. We met with PAVE folks. We arranged for drive-by appraisal ride-along. They watched appraiser measure property. It was helpful for them. We're trying to educate these folks about what appraisers really do. They're discovering there's more to it than just the appraiser running amok out there. All these reports of appraisals but we don't have enough information to see what is really going on. We have a team that has studied various reports, Andre Perry's, Freddie Mac, AIE report. We're looking at Fannie Mae report. We looked at appraisal gap in Freddie Mac report. (He summarized their report per FM). FM looked at refinances.They compared appraisals to avm values. It really wasn't undervaluation going on. Maybe there was renovation work in white areas? They're going to look more. 

We're trying to educate about history of diversity, redlining, restrictive covenants... It's helpful to learn what happened in the past to understand the concerns today. 

PAVE will come out in a week or so. Clear study, ASC, looking at Appraisal Foundation as well. The most glaring thing is wanting to allow appraiser to be liable to the borrower. It makes me nervous too.

Commercial.  LiDar measurement. Remote evaluations. incenteram.com

JT: Should the borrower be intended user of report?

JB: It's concerning. You can be sued no matter what disclaimer is in the report (who is the intended user). It gives borrower power to go after appraiser. If we start adding onerous new regulations, liability, it could dissuade new appraisers. 

JT: You can't serve two masters. We don't give them cover to tell the truth. If the appraiser says property in bad condition, lender would put pressure on appraiser not to be honest. The borrower would be angry if appraiser is honest. If it's a hoarder house and appraiser states that, borrower would be insulted.

JB: We should not have flag words (such as hoarder). That's why codes Q, C are better. C4 is not hoarder. Your camera can take 1000 pics. Photos can save you the heartache. 

JT: I'm a fan of transparency but would be better for borrower to get a summary of report but not the report with the UAD codes which they don't understand. 

JB: Hybrids. The appraiser would not be influenced by anyone at the house. Appraisers don't see the borrower at purchase appraisal but may at refinance appraisal inspection. With hybrid there is no connection between appraiser and borrower. The gold standard for appraisal is full inspection, drive the neighborhood, see the comps themselves. That is the argument against AVMs. There is a push to AVM but want to enhance it somehow. The best thing to happen to appraisers is the Zillow news that AVMs are not accurate. The Zillow (failure) was great timing for the PAVE report, Joe Biden team weighing in. 

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 LinkedIn
• Mary Cummins Meet up
• Cummins Real Estate on Facebook
• Mary Cummins Real Estate blog
• Cummins Real Estate on Google maps
• Mary Cummins of Animal Advocates
• Mary Cummins biography resume short
• Mary Cummins Real Estate Services
• Animal Advocates fan page at Facebook.com
• Mary Cummins
• Mary Cummins Animal Advocates on Flickr photos
• Mary Cummins Animal Advocates on Twitter.com
• Mary Cummins on MySpace.com
• Mary Cummins on YouTube.com videos
• Mary Cummins of Animal Advocates on Classmates
• Mary Cummins on VK

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

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

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

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

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

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

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

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

Mary Cummins 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 LinkedIn
• Mary Cummins Meet up
• Cummins Real Estate on Facebook
• Mary Cummins Real Estate blog
• Cummins Real Estate on Google maps
• Mary Cummins of Animal Advocates
• Mary Cummins biography resume short
• Mary Cummins Real Estate Services
• Animal Advocates fan page at Facebook.com
• Mary Cummins
• Mary Cummins Animal Advocates on Flickr photos
• Mary Cummins Animal Advocates on Twitter.com
• Mary Cummins on MySpace.com
• Mary Cummins on YouTube.com videos
• Mary Cummins of Animal Advocates on Classmates
• Mary Cummins on VK

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