National Fair Housing Alliance NFHA and HUD Promote False Racist Narrative About Real Estate Appraisers, Lenders For Money by Mary Cummins

National Fair Housing Alliance NFHA Promotes False Racist Narrative about Real Estate Appraisers for MONEY, mary cummins, real estate appraiser, real estate appraisal, aei, hud, nfha, national fair housing alliance, race, discrimination, bias, settlements,

UPDATE: Appraisal Institute just posted about this issue here.

"Recently, a HUD-funded billboard campaign stated, “Home appraisals should be based on property, not people.”

We wholeheartedly agree. Bias in appraisals is not only unethical—it’s illegal. However, this campaign unfairly targets a profession built on independence, impartiality, and consumer protection. In a powerful response, Sandra K. Adomatis, SRA, President of the Appraisal Institute, clarifies the critical role of appraisers, addresses misconceptions, and highlights the need for meaningful policy change to support housing equity.

Read Sandra’s full letter and learn why appraisers are key advocates for fair and objective valuations 👉 https://bit.ly/490vHl6 "

11/16/2024 I was in the market and picked up Essence magazine because Serena is on the cover and I love her. It's a black women's lifestyle magazine. Inside was another targeted racist ad against appraisers. I then decided to look at the white women's lifestyle magazines. No racist ads in there. This was targeted to black women. 

10/16/2024 Just found the PSA and script for the new NFHA ads. This is disgraceful! HUD, NFHA is basically defaming all real estate appraisers calling them racist. This has to be unconstitutional for the government to spend money making, promoting these "ads" to spread racist falsehoods against nonblacks, nonLatinos. It's unconstitutional for the government to give preference or money to specific races. It must be unconstitutional to harm specific races. Research based on their own data proves this is false. AEI's research showed there is no racism in appraisal values. 

Radio spot script

"Robbed" (:60)

WOMAN V/O: My husband and I were ready to sell our home of 25 years,

so we got it appraised. We thought we knew what to expect, but when our

home appraisal came back, we felt…robbed. Compared to a similar home

right around the corner, our appraisal was $80,000 less. That’s a big

difference. It was the same type of home, in the same neighborhood, in

the same condition and age.

NARRATOR V/O: A recent study found that Latino and Black

homeowners are about twice as likely as white homeowners to get low

appraisals. For example, one Black homeowner received an appraisal

more than double the original, after removing family photos, Black art, and

books from her home.

If you believe your home has been unfairly appraised because of race or

national origin, that could violate the Fair Housing Act. Contact HUD at

HUD.gov/fairhousing – that’s HUD.gov/ fairhousing. Everyone has a right

to fair housing.

A public service message from HUD in partnership with the National Fair

Housing Alliance."

Radio spot 2 "Hide" (:60)

HUSBAND V/O: After getting my promotion, the time had come to sell our

home. So we got an appraisal.

WIFE V/O: But it was much lower than we expected. Before we had it

appraised again, a friend suggested we make some changes.

HUSBAND V/O: I put my framed vintage Negro League Baseball shirt,

our African art, and family photos into storage. And that second appraisal

came back much higher!

WIFE V/O: It’s a shame we had to hide who we are to get a fair home

appraisal.

NARRATOR V/O: A recent study found that Black and Latino

homeowners are about twice as likely as white homeowners to get low

appraisals. For example, one Black homeowner received an appraisal

more than double the original, after removing family photos, Black art, and

books from her home.

If you believe your home has been unfairly appraised because of race or

national origin, that could violate the Fair Housing Act. Contact HUD at

HUD.gov/fairhousing – that’s HUD.gov/fairhousing. Everyone has a right

to fair housing.

A public service message from HUD in partnership with the National Fair

Housing Alliance"

https://causewaypsa.com/EPK/65056_HUD_Radio_EN/HUD_EPK.pdf

HUD, NFHA is basically defaming all real estate appraisers calling them racist. This has to be unconstitutional for the government to spend money on these "ads" to spread racist falsehoods. Reseach based on their own data proves this is false. AEI's research showed there is no racism in appraisal values. 

ORIGINAL: The private nonprofit group National Fair Housing Alliance NFHA  promotes the false narrative about alleged racist, biased real estate appraisers, lenders, AMCs to get donations, grants and millions in legal settlements per year. They falsely promote fake debunked papers about race and home values. Currently they're running advertisements falsely stating that real estate appraisers lowball blacks and Latinos. Private NFHA brings in $30,000,000 a year in donations and has $23,000,000 in assets in 2021. They're probably bringing in double that today in 2024 because of a recent 2022 $53,000,000 settlement from Fannie Mae and 2022 $4,000,000 settlement from Redfin. EIN 52­1676364 Phone (202) 898 ­1661

Here is their main profile in Guidestar. https://www.guidestar.org/profile/52-1676364

Here is their most recent IRS form 990 for 2021. 
https://pdf.guidestar.org/PDF_Images/2022/521/676/2022-521676364-202322239349301757-9.pdf

2023 audit shows $28M assets.
https://projects.propublica.org/nonprofits/display_audit/2023-09-GSAFAC-0000045422

They became a nonprofit in 1990. Lisa Rice is the CEO. They're headquarters are in Washington, D.C. but they're not part of the government. HUD refers people to NFHA to do their work filing complaints but they aren't a contractor. HUD runs ad campaigns about fair housing with NFHA. HUD did award over $30,000,000 in Fair Housing grants in 2024 alone to NFHA type programs. In 2021 they got a huge increase in litigation settlements i.e. $17,000,000 with legal costs of about $500,000. I wonder if they get pro bono lawyers to help them for free so they make more profit. In 2022 they got $53,000,000 from Fannie Mae racial discrimination settlement. They are clearly motivated to shake down appraisers, lenders and AMCs for money. It's been a huge financial boon to sue people to get them to cough up a settlement to end litigation, harassment, defamation and bad press caused by NFHA and their national press releases, conferences and misleading articles and videos. NFHA gets donations and press just from the press releases about their frivolous meritless lawsuits. They include a donation link in the press releases.

Nonprofit doesn't mean there are no profits or they aren't motivated by money. The main employees and sometimes board members generally get generous salaries, bonuses and perks. They are motivated by the money, power and prestige. The nonprofit sometimes donates to other groups which are generally friends of the main employees. They sometimes hire friends of the CEO, husbands, wives, children. Many nonprofits are actually just for profit businesses in disguise who don't pay taxes. A prime example is Shedd aquarium vs Sea World. They're both aquarium business with sea animals doing tricks which bring in about a billion per year. Shedd is a nonprofit and Sea World is a business doing the exact same thing. Here's an article I wrote about that. 

Lisa Rice CEO makes almost $300,000 a year. Catherine Cloud the COO makes almost the same. They spend $3,000,000 in wages. They spend $500,000 on conferences and $250,000 just at the Hyatt Hotel. They receive grants from the government after paying $500,000 to lobby the government.

Have you seen these ads which NFHA, HUD run in major magazines, websites and on TV?  They are very deceptive. American Enterprise Institute AEI proved that appraisers don't lowball anyone let alone blacks and Latinos. First time buyers in lower income areas buying lower priced homes are more likely to be black and Latino because of the income gap. The real estate purchases are more likely to have concessions for repairs and closing costs in these areas. This is why some appraisal values are sometimes 3% lower than contract value. The contracts include the concessions for repairs and closing costs which pads the sales price by about 3%. Appraisers have to adjust for concessions which lowers appraisal value by the concession amount for repairs and such.

I just realized that NFHA has done advertisement campaigns in the past with HUD. I just saw a full ad with HUD disclaimer on the bottom of one ad.

https://www.hud.gov/sites/documents/NFHAHUDWHEELCHAIR_EN.PDF

https://www.hud.gov/sites/dfiles/FHEO/documents/HUD_NFHA_Discrimination_ENG_508.pdf

https://www.hud.gov/sites/documents/FATHER_SON_ENG.PDF

I couldn't read the fine print in the ad I originally posted above. HUD is working with NFHA on these misleading ads. The block of text after "Everyone has a right to fair housing" could say "A public service message from the U.S. Department of Housing and Urban Development in partnership with

the National Fair Housing Alliance. The federal Fair Housing Act prohibits discrimination because of race, color, religion, national origin, sex, familial status or disability. For more information, visit www.hud.gov/fairhousing." It still makes it seem that private NFHA is part of the government when it's not. 

Here is their income from settlements, shakedowns.

NFHA stated that appraisers lowball blacks and Latinos in the US. This is false. AEI proved with the government's own data that appraisers aren't lowballing anyone, see links below. The data NFHA used for this false statement was based on robot appraisals. No appraisers were involved. AEI debunked Andre Perry's false and misleading paper. It was not peer reviewed research. This is again correlation and not causation. Blacks, Latinos make less money than white people. If you make less money, you have less money and you will buy/own a lower priced home in a lower priced area. It's the income gap. Same thing happens to lower income whites, Asians ... everyone. Blacks, Latinos own lower priced cars for the same reason. Will they also blame that on real estate appraisers? If they really care about the issue, they should fix the income gap which has nothing to do with housing.

NFHA and HUD are lying to the public about appraisal bias.  FTR anyone can use the HUD logo. HUD clearly states this in their website. I could use the HUD logo in my website and falsely state all non Latino appraisers lowball Latinos so Latinos should only use me, a Latina, for their appraisal. I could probably make money lying like that but I'd never do that because it's dishonest and racist. NFHA makes money being dishonest. They know they are promoting a false racist narrative for their own agenda which is money. 

I just noticed that NFHA has different ads for different publications based on most likely race of viewer based on subscriber statistics. Some are Latinos, blacks, Asians and whites. Is this racist? Should they be sued for racism, targeted racism, colorism like they are suing lenders? They're doing the same exact thing they are accusing others for money. The ad in Sports Illustrated showed white people. The one in a mainly a black magazine showed black people. Who is the racist here?

Just found one of the ads blown up so I can see the text. It is from NFHA and HUD. Click to view larger to read the text. 

Great article by Jeremy Bagott on this same issue. He shows the bigger picture which is the use of the false narrative of the racist biased appraiser to get rid of appraisers to make lenders, AMCs more money. Lenders have lobbied the government to use AVMs, appraisal waivers, value acceptance, hybrid appraisals, desktop appraisals to get rid of appraisers in favor of free robots. These robots are more biased than any appraiser because they don't know or consider all factors in appraisal. Robots don't know condition, view, lot type, actual size, actual bed/bath count, permitted size, upgrades, amenities, specific location...which are main factors in valuation. https://mailchi.mp/c5f09f56ce7f/regulatory-capture-hud-and-a-crony-nonprofit-9382139

References

How Common is Appraiser Bias?
https://www.aei.org/wp-content/uploads/2022/06/How-Common-is-Appraiser-Racial-Bias-An-Update-May-2022-FINAL-corrected-1.pdf?x91208

Exploring Alternative Explanations for Appraisal Under-Valuation
https://www.aei.org/research-products/report/exploring-alternative-explanations-for-appraisal-under-valuation/

The Impact of Race and Socio-Economic Status on the Value of Homes by Neighborhood A Critique of the Brookings Institution’s “The Devaluation of Assets in Black Neighborhoods”
https://www.aei.org/wp-content/uploads/2021/08/Impact-of-Race-and-Socio-Economic-Status-on-the-Value-of-Homes-by-Neighborhood-Presentation-8.5.21-FINAL-v4.pdf?x85095

Racial Bias in Appraisals: New Research
https://www.aei.org/wp-content/uploads/2023/11/Racial-Bias-in-Appraisals-New-Research-FINAL_revised.pdf?x91208

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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HUD Bias Complaint Against Appraiser by Mary Cummins Real Estate Appraiser

UPDATE 12/05/2024: Rocket Mortgage just sued HUD in a new lawsuit 24-cv-03368. They claim they are not responsible for third party AMCs and appraisers. The DOJ provided the borrower named of Francesca Cheroutes. Rocket gave Francesca Cheroutes two chances to do a Reconsideration Of Value ROV or appraisal appeal. She declined. The address provided by DOJ is 749-751 Ash Street, Denver, Colorado. Owner lives in one unit and rents out the other. 

Rocket Mortgage's main argument is that Rocket did not have a duty to "correct" the appraisal. Appraisers, AMCs are independent third parties. The government is the one that mandated that appraisers, appraisals be independent. They don't want lenders pressuring appraisers. Legally Rocket is not allowed to "correct" an appraisal. They are not allowed to even try to influence an appraiser, appraisal per the law. They further argue that they told borrower they could send in an ROV to the AMC which gives it to the appraiser but borrower refused. Failure to mitigate a claim. Lender can't send in the ROV. I agree with Rocket Mortgage.

*Everything in this article is based on public records such a building records, public MLS/rent listings, the public filed lawsuit and the public DOJ report. 

Per DOJ, borrower and Zillow subject is two units, six beds, four baths, 3,550 sf and each unit is two floors. That's almost double the actual finished GLA and bed/bath count. The units are 2 beds, 1 bath 1,500 or so sf total with full basements which are not 100% finished. There is one floor and a basement level. Credit was given for the basement. Duplex comps with similar basements used. This is an area where properties would all have full basements. Zillow/Trulia value today December 2024 after three years of appreciation $826,000 based on 6+4 3,500 sf. Then I doubt it was worth $860,000 in January 20, 2020. RedFn says $797,000 with same wrong bed/bath. I obviously put no weight in Zillow, RedFn values. Clearly the borrower wanted the incorrect Zillow bed/bath count and value. Borrower claims she had a no inspection "valuation" March 2022 for $885,000. Sounds like an AVM or free broker CMA BPO for listing which would be higher than market value.

Multifamily properties are different than SFR. They generally include GBA Gross Building Area. That can include other areas if it's 100% finished. The most important thing is to compare apples to apples. In this area most duplexes, SFRs have full basements. Some are finished, some have "legal" beds/baths and some don't. The appraiser used similar comps and included basement adjustments. 

I did not do the original appraisal. I live in an area where basements and especially full basements are very uncommon in Los Angeles, California. They are never in GBA of 2-4 units. They are generally never 100% finished. At most they are crawl spaces or small utility basements. We have/had a high water table and basements would flood which is why we don't have them. Most of them have no windows or legal exits from all rooms. You need a legal sized window exit from bedrooms to legally be a bedroom. You don't want to get trapped in there in a flood or fire. 

It turns out the black female attorney was happy with a few previous refinances of the property. They still have their mortgage with Rocket including the servicing. They didn't go get another loan with a new lender. This appears to be another false claim of bias and discrimination. This woman filed complaints in a few places. Read the documents and come to your own conclusion.

Per DOJ January 2021 $640,000 appraisal value. Appraisal from previous year was allegedly $860,000. It appears the previous value was perhaps too high. Francesca lied to the DOJ about requesting a reconsideration of value. She didn't request one. She should have requested a ROV. Then the issue of GLA, GBA could have been clarified. Borrower stated she merely complained about racial discrimination and demanded a higher value. It would have taken her half an hour to submit a ROV. She should have done that. Failure to mitigate damages, if there were any damages. We also don't know if her credit score, debt ratio, income levels, job history, judgments, liens, payment history ... affected her credit rating. There are many reasons to be denied a loan. The appraisal value is just one of them. If you have great income, great credit, little debt, long time job history ... a lower appraisal value wouldn't matter as much especially as this is owner occupied. 

Here is the property per Zillow with size of 3 bed, 2 bath1,550 sf. That value is $557,000 today. It shows only one unit. The actual units are about 2 bed, 1 bath 700-800 sf GLA each with additional basement. One place even lists this as four units. I think they took the data from a rental offering of one unit. See how inaccurate Zillow can be.

https://www.zillow.com/homedetails/749-N-Ash-St-Denver-CO-80220/2067840283_zpid/?

Zillow value adding basement. It shows two units adding basements to first floor. Basement was given credit in the appraisal. There were no beds, baths in the basement per original appraisal. It's just laundry, exposed water heater, exposed furnace, electrical outlet on outside of wall, pipes on outside of ceiling. Maybe the owner has since updated the basement. It's listed as full basement but not 100% finished.

https://www.zillow.com/homedetails/749-751-Ash-St-Denver-CO-80220/2054732090_zpid/

Property data https://www.denvergov.org/property/realproperty/summary/0606314009000/

One unit was offered for rent for $3,000 October 2024. Looks like it had upgrades in 2022. It was previously listed for $3,500 then $3,400 then $3,200.  It states recent renovations. https://www.trulia.com/home/749-n-ash-st-denver-co-80220-2067840283

One unit was offered for rent for $2,800 November 2021. You can see the basement level. Photo from that listing. Half size windows so a lot less light. Legal basement egress windows must be at least 24 inches tall and 20 inches wide. I can't tell if that is 24 inches but maybe it isn't. The window must be minimum 5.7 sf area and no more than 44" off the floor. Again, it may not be big enough. As I look at interior, exterior photos I don't know if the windows meet those minimums. People need to be able to escape in a fire or flood. I don't see the current basement bedroom windows. These pics are recent after a remodel with new carpet, paint... I see exposed plumbing, electrical so not 100% finished. I see some wonkiness in an interior wall under the window which looks like water damage. Again, I'm not the appraiser and haven't seen the property.
https://www.zumperrentals.com/apartments-for-rent/12060314p/3-bedroom-hale-denver-co?gallery=#media-447399980

Here is the racial bias accusation. She had a Black Lives Matter BLM sign on the property and appraiser walked by it. Sounds like the woman just wanted the lender to give her a higher value so she could refinance her loan again. She may have tried to go to another lender with another appraisal and that appraisal was probably also low so she didn't refinance. Perhaps she was able to pressure the previous appraiser. It sounds like she was trying to pressure the appraiser in this case. 

 https://www.prnewswire.com/news-releases/rocket-mortgage-sues-united-states-department-of-housing-and-urban-development-302323839.html

Link to the complaint.

https://drive.google.com/file/d/1YY7L-lJ-8nQBsBEJA9H7U-K0Y1i3deWP/view?usp=sharing

Below is the court docket for the current case.

U.S. District Court - District of Colorado

District of Colorado (Denver)

CIVIL DOCKET FOR CASE #: 1:24-cv-03368-REB

Rocket Mortgage, LLC v. United States Department of Housing and Urban Development

Assigned to: Judge Robert E. Blackburn

Cause: 05:0706 - Judicial Review of Agency Action

Date Filed: 12/04/2024

Jury Demand: None

Nature of Suit: 899 APA Review/Appeal

Jurisdiction: U.S. Government Defendant

Plaintiff

Rocket Mortgage, LLC represented by Angelica Rankins

Goodwin Procter LLP

1900 N Street NW

Washington, DC 20036

202-346-4000

Email: 

ATTORNEY TO BE NOTICED

Brooks R. Brown

Goodwin Procter LLP

100 Northern Avenue

Boston, MA 02210

617-570-1000

Email: 

ATTORNEY TO BE NOTICED

Keith Eric Levenberg

Goodwin Procter LLP

1900 N Street NW

Washington, DC 20036

202-346-4000

Email: 

ATTORNEY TO BE NOTICED

Jeffrey Brian Morganroth

Morganroth & Morganroth, PLLC

344 North Old Woodward Avenue

Suite 200

Birmingham, MI 48009

248-864-4000

Fax: 248-864-4001

Email: 

ATTORNEY TO BE NOTICED

V.

Defendant

United States Department of Housing and Urban Development

Date Filed # Docket Text

12/04/2024 1 COMPLAINT against United States Department of Housing and Urban Development (Filing fee $ 405,Receipt Number BCODC-10018454)Attorney Jeffrey Brian Morganroth added to party Rocket Mortgage, LLC(pty:pla), filed by Rocket Mortgage, LLC. (Attachments: # 1 Civil Cover Sheet, # 2 Summons, # 3 Summons, # 4 Summons)(Morganroth, Jeffrey) (Entered: 12/04/2024)

12/04/2024 2 CORPORATE DISCLOSURE STATEMENT identifying Corporate Parent Rocket Companies, Inc., Corporate Parent Rocket, LLC for Rocket Mortgage, LLC. (Morganroth, Jeffrey) (Entered: 12/04/2024)

12/04/2024 3 NOTICE of Related Cases by Plaintiff Rocket Mortgage, LLC (Morganroth, Jeffrey) (Entered: 12/04/2024)

12/04/2024 4 NOTICE of Entry of Appearance by Brooks R. Brown on behalf of Rocket Mortgage, LLCAttorney Brooks R. Brown added to party Rocket Mortgage, LLC(pty:pla) (Brown, Brooks) (Entered: 12/04/2024)

12/04/2024 5 NOTICE of Entry of Appearance by Keith Eric Levenberg on behalf of Rocket Mortgage, LLCAttorney Keith Eric Levenberg added to party Rocket Mortgage, LLC(pty:pla) (Levenberg, Keith) (Entered: 12/04/2024)

12/04/2024 6 NOTICE of Entry of Appearance by Angelica Rankins on behalf of Rocket Mortgage, LLCAttorney Angelica Rankins added to party Rocket Mortgage, LLC(pty:pla) (Rankins, Angelica) (Entered: 12/04/2024)

12/05/2024 7 Case assigned to Judge Robert E. Blackburn. Text Only Entry. (agryan) (Entered: 12/05/2024)

12/05/2024 8 SUMMONS issued by Clerk. (Attachments: # 1 Summons, # 2 Summons, # 3 Magistrate Judge Consent Form) (agryan) (Entered: 12/05/2024)

DOJ case which lists name of owner and address. We now have address, values and dates.

https://www.justice.gov/opa/media/1374081/dl?inline

Below is heading of DOJ v Rocket case 24-cv-02915 Denver, Colorado. Francesca is listed as a Plaintiff intervenor with attorney andy@newman-mcnulty.com So far the case was reassigned a few times then Rocket filed the Motion to Dismiss 12/04/2024. Below is Francesca's complaint. Francesca publicly shared her identity and home address. She shares misinformation and articles about the false narrative of the alleged "racist white appraiser" in her complaint. October 2024 USA Today, NY Times mentioned her in their articles about the case. Here is one article with a photo of Francesca. She shared this information publicly so she is legally liable for defamation. There is no litigation privilege when you share false information publicly. This is why the Maryland appraiser sued the property owners. https://www.nytimes.com/2024/12/06/realestate/rocket-mortgage-lawsuit-appraisals.html

https://drive.google.com/file/d/1REwJ4TECl1g_1JzcVytpBAMK3i6k2hTw/view?usp=sharing

U.S. District Court - District of Colorado

District of Colorado (Denver)

CIVIL DOCKET FOR CASE #: 1:24-cv-02915-GPG-TPO

USA v. Rocket Mortgage, LLC et al

Assigned to: District Judge Gordon P Gallagher

Referred to: Magistrate Judge Timothy P O'Hara

Cause: 42:3612 - Civil Rights in Housing -- Enforcement by Secretary

Date Filed: 10/21/2024

Jury Demand: Plaintiff

Nature of Suit: 440 Civil Rights: Other

Jurisdiction: U.S. Government Plaintiff

Plaintiff

As I read the DOJ complaint the borrower believed maintenance items were improvements. They also did the craziest "appraisal" math using cost per bedroom of final value to give value to basement areas. They used average price per square foot of Denver area, average appreciation...many things an appraiser would not use. They mention the 10, 15, 25% guideline adjustments. Those are not mandatory. The issue was she could not refi her apx $550K loan with a value under $860K. Borrower does mention GLA, GBA issue. She complained about racial discrimination but did not file a ROV even when offered twice. She should have filed a ROV to deal with her issues. 

ORIGINAL 07/16/2024: "HUD Charges Appraiser, Appraisal Management Company, and Lender with Race Discrimination WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) announced today that it has charged multiple entities with housing discrimination for issuing a biased appraisal and then denying a refinance loan application in Denver, Colorado. HUD’s Charge against the appraiser, M* M*; appraisal company, M* Appraisal Group; appraisal management company, Solidifi U.S. Inc.; and lender, Rocket Mortgage, LLC, alleges that the appraiser issued a discriminatory appraisal that undervalued a Black homeowner’s property on the basis of her race. The Charge further alleges that, when the homeowner complained to Rocket Mortgage, Rocket Mortgage would only proceed with her refinance loan application based on the appraised value that she alleged was discriminatory."

This is the first complaint HUD has investigated in years. The lack of finished investigations is probably one reason why Marcia Fudge was shown the door. As usual there is no property address or borrower/owner name so we can't ascertain if the appraisal values were accurate or not. Of course there are no appraisals just values and dates. When we know the name or address we appraisers have been able to tell if the appraisal values were accurate or not. This is intentional so the public will never know and we must just believe the HUD press release. 

This case sounds a lot like the Oakland case. Sounds like an area going through revitalization. Some homes are fully renovated and some are not. Values vary greatly based on specific location and condition per the data we have. HUD again brings up race of area. Appraisers never look at census records or race data. Race of area is from census records. Census has to do with who lives there and not who owns the property. There is the race income wealth correlation which means areas with more white occupants are probably worth more because they are probably fully renovated and in slightly better locations. This is an assumption based on research which shows white areas are worth more than black or Latino areas. I really wish they'd include the address so we wouldn't have to just guess and speculate. We will probably never know but based on my experience the higher ones are generally wrong. Lower ones are generally correct.

I predict the lender, AMC will settle for a slap on the wrist without admitting or denying guilt. They'll release a press release saying that have always been and always will be committed to fair housing. The appraiser will sadly settle without paying money because he can't afford to litigate. He will be forced to watch the mockumentary Lowballed strapped to a chair and attend a bias class by a private fair housing organization who was a friend of ex HUD chief Marcia Fudge. HUD will release news of the settlement stating they are helping POC obtain fair housing and loans. No one will ever know which appraisals were correct and which were not. No problems are solved. No one is helped. Things haven't changed. The PAVE task force was just a lot of talk and more administrative paperwork for lenders and appraisers.

https://www.hud.gov/press/press_releases_media_advisories/HUD_No_24_181

The charge 

https://www.hud.gov/sites/dfiles/FHEO/documents/Charge_08-21-3530-8.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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

References

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

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

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

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

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

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

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

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

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

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

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

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

Mary Cummins 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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Sample AMC appraisal guidelines to help real estate agents understand requirements of reports - Mary Cummins

Mary Cummins, Cummins Real Estate Services

 

This article is a response to an article in "Valuation Review." The article is titled  "Survey: Realtors report contracts still impacted by low appraisals. 'Realtors reported that a percentage of contracts are being canceled, delayed or renegotiated due to low valuations, blaming the process, inappropriate comparables, lender demands and AMC requirements for the issues that still plague the marketplace.'" 

 

 

Below is a sample of an Appraisal Management Company's (AMC) instructions to real estate appraisers. I took out all identifying information of the AMC and replaced it with “---.” People need to realize that we must follow all of these instructions. In the current market it is sometimes difficult if not impossible to find comparables that are similar to the subject and conform to these guidelines. In the past if we could not find comparables that met the guidelines, we could deviate and use other comparables as long as we explained things in detail. These guidelines are especially difficult with custom or luxury homes which don’t conform to the average home or with comparables that are short sales or foreclosures.

 

As you can see from these guidelines, appraisers now must do three times as much work than in previous years. Appraisers are now being paid less than half of the appraisal fee. The rest of the fee goes to the AMC. If we don’t follow these guidelines, we don’t get paid anything. If the client cancels the purchase or refinance contract, we also don’t get paid. If we are late, we don’t get paid. On top of this AMCs are making all orders rush orders. We have to complete all of this in two days from when the order was placed online, not from when we see the order or when we inspect the property. It sometimes takes a couple of calls to get an appointment to view, measure, inspect and photograph the subject property. Nowadays every appraisal is like a race. With condos it’s even more difficult as we must get information from the HOA or management company. 

 

I’m writing this just so people understand everything that’s involved in an appraisal for a conventional loan for purchase or refinance with a regular bank. 

 

----------------------------------------------------------------

 

“By accepting this assignment, the appraiser is acknowledging geographic familiarity and competence to complete and provide a supported opinion of value in compliance with USPAP and adherence to Fannie Mae, Freddie Mac and all other agency guidelines. The appraiser must act and dress professionally while inspecting the subject property. The appraisal will be relied on to make a lending decision, the reader of the report must be able to understand how the appraiser arrived at their conclusion.

 

================================================= 

DO NOT PROCEED if the following conditions apply...

================================================= 

 

• IF THE SUBJECT’S PRODUCT TYPE DIFFERS FROM THE ENGAGEMENT LETTER – STOP AND CALL --- 
• * If the subject is a refinance but is currently listed or has been listed for sale in the prior 180 days.
• You are not the appraiser specifically named on this order for this property as you may NOT BE PAID for the report. 
• * Subject property is a manufactured and or mobile home. Manufactured home is defined as “any dwelling unit built on a permanent chassis, including those attached to a permanent foundation system.” 
• * Subject property is under construction or in the process of remodel 
• * If the Subject property is rated less than average (C5 or C6) please stop and call ---. At inspection, please take a photo of any/all factors effecting condition. You will be asked to either write a brief addendum about the condition or will be advised to complete the report "subject to repair". 
• * If the subject has significant mold issues that need to be remediated. 
• * If the subject is an SFR but also is income producing (i.e. working farms, beauty shop, dog kennels, dental or accounting office’s).

If you encounter ANY of the above situations, please contact your --- Order Specialist immediately for further instructions. If appraisal is completed without notifying ---, appraiser may not be paid.

 

==================== SPECIAL REQUIREMENTS ====================

 

 *** Our client requires that you attempt to contact the borrower/access provider within 24 hours of receiving this order. Please contact us immediately if you have any problems gaining access to the property. ***

 

• COST APPROACH section must be filled out. The source of the cost figures must be included in the report. In addition, the appraiser must document the depreciation method. The appraiser should not back into the estimated land value. Where possible, vacant land sales should be referenced. 
• If the land to value ratio for the subject exceeds 30%, a detailed explanation is required; if the land to value ratio for the subject exceeds 80%, call --- for further direction.
• If your subject is located in a market where marketing times exceed 6 months, then your report must include support and detailed explanation for marketing times exceeding 6 months and its impact on value. Also, the majority of your comps should show "days on market" greater than 180 days. 
• If the subject property has security bars, you must mention if the bars have safety release latches, and if they are in compliance with local fire/safety codes.
• If the subject is a purchase transaction, the SALES CONTRACT AND ALL ADDENDA MUST BE REVIEWED AND the impact of financing and sales concessions, if any and their effect on value should be properly analyzed. Note: The sales contract is considered a relevant piece of market data. In cases where the estimate of value falls below the contract, please provide a complete reconciliation providing the reasoning that supports the value conclusion.
• If the subject is a refinance and vacant, please check to see that utilities are working. Please add this information to the report.

 

---------------------- LICENSING REQUIREMENTS ---------------------- 

 

• Only a State Certified or State Licensed appraiser may complete the assignment. 
• If the subject property is valued over $1 million, a Certified Residential Appraiser or higher is required to complete the report.

------------------- REPORT REQUIREMENTS -------------------

 

 For Single Family Residence and Site Condo in condo projects that consist solely of detached dwellings use form 1004. 

• Itemized Cost to Cure is required ONLY when repairs are needed. (List cost for each individual repair item and a total cost to cure). All repair items require a photograph. If Health and safety issues are noted, please complete the report "Subject to" Health and safety items only. All other repair items should be considered in a cost to cure. Photographs are required. 
• ACREAGE – Client requires the total site area to be included in the appraisal value (i.e. if the public record indicated a site of 64 acres, then all 64 acres are to be valued in the report.) 
• WELL/SEPTIC - If the subject is on well and/or Septic, you must comment if this is typical for the area and if there is any impact on value. 
• Sales and/or Listings should bracket the subject's gross living area (GLA). If this is not possible, please provide a detailed explanation.
• If the subject's final value conclusion is above the predominate value for the area, a detailed explanation is required to explain why it is.
• You must have two data sources for all sales in your report. One can be public records or a public records data provider but the other data source should be MLS, or builder, or broker, or agent or seller or buyer etc. It is not acceptable for the second data source to be "exterior inspection".
• Comment on any external factors stating what type of structures or land uses are present, if they affect marketability (positive or negative) or are considered an external obsolescence (in which the box on page 1 of the URAR should be marked YES for site conditions/external factors). Address whether or not the comparables shares similar influences.
• For RURAL: If dated or distant comps are used in your report it is mandatory that a complete and detailed discussion be made in the report about what lengths you went to find more recent and closer comps and a detailed reconciliation on which comp(s) get most weight in your appraisal.

----------------------- COMPARABLE REQUIREMENTS -----------------------

 

• 3 Closed Comparable Sales. All comparables must be within 1 mile from subject and sold within the last 6 months. NOTE: If comparable sales exceed proximity/sale criteria, detailed explanation is required. 
• Provide 1 Comparable listing, if available. (TWO listings are required in a "declining" market.) Listings must support the value estimate. 
• Please provide days on market (DOM) for each listing or pending comparable property used in the report. This would include total days on market not just the days on market since the last price reduction. 
• If the subject property is valued over $1 million, a total of five comparables are required, the required 3 sales above, and any two additional comparables, either active pending or sold. Any other sales considered relevant, however not comparable, should be narrated within the supplemental addendum. 
• You must make list price to sales price ratio adjustments to any listing or pending comps used in your report, or provide commentary to explain that no list price to sales price adjustment is warranted when not made. 
• The appraiser must provide a reconciliation of the sales comparison approach. Specifically, why each of the comps used in the report were chosen and which comp(s) are given most weight in the appraisal and why. This is in addition to the reconciliation of the 3 approaches to value. 
• Market and Time Adjustments – Time adjustments must be explained and supported with market data.
• Across the grid adjustments – All positive or negative adjustments made to all comparables require explanation and market support. These are specific adjustments for condition, construction quality, view and location. (Example: If first 3 comparable sales are in inferior condition, it is necessary to provide a 4th comparable sale in similar condition even if it is dated or a distant sale.) 
• A wide unadjusted range with only less conforming comparables available (causing line, net, and gross adjustments to exceed typical guidelines) requires detailed support for individual adjustments and adequate commentary is critical for underwriting purposes. Lastly, with the challenging comp data resulting in a report with higher adjustments or a wider adjusted range, the reconciliation commentary on the report needs to be very specific as to the weighting of the comparables and why as to arriving at the final estimate of value. 
• An explanation is required on the adjustments to the comparable sales whenever the gross adjustment exceed 25% and net adjustments exceed 15%. Please be certain that the gross living area adjustments per square foot for the comparables are consistent. *An explanation is required when using comparables with a GLA variance greater than 20% * When use of dated or distant comps is necessary, justification for their use must be included. A thorough explanation of the available market data and the expanded search parameters utilized is expected.

------------------ PHOTO REQUIREMENTS ------------------ 

• Front, rear and street scene of the subject property. 
• Interior photographs, which must, at a minimum, include: – the kitchen; – all bathrooms; – main living area; – examples of physical deterioration, if present; and – examples of recent updates, such as restoration, remodeling, and renovation, if present. 
• Photos of pools, outbuildings, views (if applicable). 
• Photos of any deferred maintenance that would affect property value.
• Original front photos of each comparables used. If MLS photos are used, a current photo taken by the appraiser is still required. Clients will only accept MLS photo if comp is in an inaccessible community. Appraiser then must provide photo of obstacle as well and a detailed explanation.

NOTE: Please DO NOT include pictures of people on any of the images in the report.

 

---------------- REQUIRED EXHIBITS ---------------- 

• Location map with subject and comparables used. 
• Subject building sketch – Sketches must include all outside dimensions, calculations, labels for all rooms and out buildings. 
• 1004MC form 
• A copy of the appraiser's license is required in the report.

--- and --- requirements and advisements Advisement on Private Streets 

Private Street properties only

1. Report to provide details on whether a written private street agreement exists. 
2. Identification of the comparables being located on private or public streets is required.
3. Commentary on market reaction to private versus public street location is to be included.

Advisement on Adverse or Functional issues 

• Make sure the appraiser has fully described the functional issue. 
• Make sure the appraiser has fully analyzed the functional issue. 
• Provide photographs
• Make sure the appraiser has fully assessed and proven the impact on value and marketability on any adverse condition.
• Atypical Properties 
• Common mistake: insufficient information; make sure there is detail about what makes the subject atypical and unique. 
• Please make sure the appraiser discusses if the subject would compete with other homes in the market 
• Describe the type of buyer that would be interested in this kind of home in this market and discuss if it is a limited buyer pool.
• When possible, provide homes with similar impairment or similar functional issues

Requirement on Non Permitted Additions: This is a condition of assignment

Non-permitted or non-verifiable as permitted living areas should be analyzed for their potential impact on value and adjusted. This could result in either positive or negative adjustments. Simply ignoring non-permitted areas is not acceptable. You must provide your source used to determine the additions were not permitted.

 

Non-permitted additions may be common and typical in some areas, having both market acceptance and a positive market reaction related to their perceived value.

 

In situations of non-permitted additions, please answer the list of questions below and complete the report being sure to address each issue within the addendum. The report addendum should summarize the itemized points listed below and should contain at least 1 comparable with a similar unpermitted feature to demonstrate it as being common and typical for the area and to support market acceptance. 

1. Completed in a workmanlike manner? 
2. Common and typical for the area? 
3. Provides contributory value? 
4. Are comparables with similar non-permitted improvements available and can be utilized in the report? 
5. Affect on marketability is positive?
6. Conforms to zoning? 
7. Property could transfer without obtaining the lacking permits? 
8. Property could transfer without demolition of the addition? 
9. If destroyed, could all of the existing improvements be rebuilt?

 

If the quality of the added improvement is consistent with the existing dwelling, market acceptance and positive reaction exists, and there can be a reasonable expectation of its permanency, the client will recognize the non-permitted area as acceptable collateral for loan purposes. In most cases the additional living area will be reflected in the GLA; however an acceptable alternative is to account for it as a separate line item adjustment. The later may be more appropriate if the justifiable rate of adjustment for the non-permitted area is different than the GLA rate, and necessary if the non-permitted area is detached from the main dwelling as would be the case in the examples of a pool house or an in-law cottage.

 

If the non-permitted addition or modification has resulted in creating any health & safety issues that must be remedied, then the report needs to be made SUBJECT TO only the necessary repairs or alterations to remedy the H&S concerns.

 

**In California - --- does not require the appraiser to determine if Co2 detectors are present and the report should not be made "subject to" simply based on the lack of the co2 detectors.

 

All appraisal reports are subject to appraisal review. You may be contacted to provide responses to questions resulting from a review of the appraisal report. Additional research, analysis/and or supplemental appraisal information may be requested.

 

SUBMITTING THE REPORT 

 

For *** **

 

*** DO NOT submit invoice with completed report. Invoices are paid 30 days upon completion of the order. Please be reminded that the order will ONLY be considered complete once our client accepted the appraisal report. In the meantime, you must

be available to make ANY corrections/revisions, if necessary.

 

It is important that all instructions and requirements mentioned above have been fulfilled before submitting the report to prevent any delays. Failure to comply with all the requirements will result in non-payment of the order.

Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the California Department of Fish and Game and the USDA. Mary Cummins is also a licensed real estate appraiser in Los Angeles, California.

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