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

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California
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Showing posts with label condition. Show all posts
Showing posts with label condition. Show all posts

Monday, May 20, 2024

Privacy, Security in Real Estate Appraisals by Mary Cummins Real Estate Appraiser

I was asked to comment about Fannie and Freddie allegedly testing AI image scanning by a foreign business. A previous article stated "Fannie Mae and Freddie Mac’s plan to implement photo recognition AI to analyze appraisal photos. This technology can scan a single photo and extract over 100 data points related to quality, condition, and repairs. For example, it can identify flooring types, appliance models, and even assess light levels in a room." I was told recently "Mortgage giants Fannie Mae and Freddie Mac are reportedly “bench-testing” an arrangement with a foreign AI firm in which the offshore firm will data-mine millions of images showing the personal spaces of U.S. homeowners and tenants." The article is linked below.

https://appraisersblogs.com/fannie-n-freddies-offshore-gambit-imperils-privacy-of-millions/

My comment is at the end here.

“Interior photos show the location of valuables, safes, guns, security systems, security cameras, power main, children’s rooms, entrances and exits,” said Mary Cummins, a Los Angeles-based real estate appraiser and expert witness. “Appraisers blur out people, photos of people and similar items. Property inspectors do not.

“You could end up having someone in another country looking at photos of your baby in a crib,” said Cummins. “The layout of the home is included in the [report]. Sometimes there is even a 3D photo layout which shows the exact location of the baby’s room and valuables in relation to entrances and exits. This data could end up in the wrong hands directly or through security breaches and pose a threat to the people living in the home.”

A few years ago a couple of AMCs stated that appraisers were not allowed to use appraisal assistants or report writers in foreign countries. The purpose was security of the appraisal data. I have not used any assistants in over 20 years so no worries here. Currently many people allegedly from India offer to write entire reports for appraisers for a couple of bucks. They email all appraisers. I agree that I wouldn't want someone being paid $1 an hour looking at the private personal property and family members of clients. I could see that data being sold directly or shared via a security breach and used for nefarious purpose such as robberies. 

I've appraised homes of celebrities. My photos, diagram, layout show the location of the bedrooms. Most people keep valuables such as jewelry, money, guns, drugs in the main bedroom closet. I've taken photos of safes, jewelry cases, guns, babies sleeping in homes. I would never want those photos shared.

Our reports include information about the security system, video surveillance cameras, security gates, fences, main power box. A criminal could use that data to disable the power, over ride the security system and enter the home. That information should never be shared.

I keep my reports extra secure. I also digitally shred and get rid of them the second I am legally allowed. I don't want to possess any of the reports but I legally must maintain them for a set number of years. This is another reason why I have no paper files. 

If Freddie and Fannie ultimately do this, I think we should be concerned. You'd think a US AI company could probably do this work and add to the US job market. There would at least be some culpability, liability, notification if a US company had a data breach. Generally the real estate appraiser is the one who states there are granite counter tops, marble floors, Saltillo patio tiles and their overall condition. The bank's loan underwriter can clearly see these items and their condition in the photos. They make the ultimate decision. An external identifier is really not needed in order to make the loan. Not only that but you can't tell if granite, marble, tile or wood is fake by a photo. You have to see it up close at an angle and sometimes feel it in person to determine fake from real.

The main value of a home is its location, size, bed/bath count and overall condition. The report doesn't even ask us the C1-C6 condition of individual elements. It doesn't ask us for the model, age of all the appliances. We are only asked for the overall condition of the home rated C1 for new never lived in; C2 virtually new/no repairs or grades needed; C3 normal wear and tear, no deferred maintenance; C4 minor deferred maintenance, some upgrades needed; C5 significant deferred maintenance and C6 severe deferred maintenance. If the property is C5, C6, they are probably not getting a conventional or any loan anyway.

When, if Freddie and Fannie implement such a program, I'll be sure to update the article. In the meantime I feel they should review all appraisals in the US with properly licensed people with full background checks such as real estate appraisers and lenders.

Article by Jeremy Bagott - Certified General Real Estate Appraiser at Bender Rosenthal Inc

Jeremy Bagott is a real estate appraiser and former newspaperman. His most recent book, “The Ichthyologist’s Guide to the Subprime Meltdown,” is a concise almanac that distills the cataclysmic financial crisis of 2007-2008 to its essence. This pithy guide to the upheaval includes essays, chronologies, roundups and key lists, weaving together the stories of the politics-infused Freddie and Fannie; the doomed Wall Street investment banks Lehman and Bear Stearns; the dereliction of duty by the Big Three credit-rating services; the mayhem caused by the shadowy nonbank lenders; and the massive government bailouts. It provides a rapid-fire succession of “ah-hah” moments as it lays out the meltdown, convulsion by convulsion.


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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