Mary Cummins, Real Estate Appraiser, Real Estate Appraisal, Los Angeles, California, Mary Cummins.

Mary Cummins is a real estate appraiser in Los Angeles, California with 38+ years of experience. Cummins provides real estate appraisals for banks, lenders, mortgage brokers, Appraisal Management Companies (AMCs), lawyers, Courts, factors and private parties for lending, lawsuits, probate, estate planning, divorce and all types of litigation. Cummins provides 1004, 1073, 1025 and other form reports, narrative reports and historical appraisals besides real estate research and appraisal advice.

Showing posts with label freddie mac. 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.

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

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Mary Cummins

Mary Cummins of Cummins Real Estate Services has been in real estate since 1983, over 35 years. She is licensed by the Bureau of Real Estate Appraisers. Mary Cummins was an agent and broker licensed with the California Department of Real Estate selling residential income, commercial buildings, raw land and homes for Merrill Lynch Realty in Beverly Hills and Westside Properties in Los Angeles before concentrating on appraisals. Mary Cummins currently provides real estate appraisals, expert witness testimony, historical research, legal real estate research for mortgage brokers, banks, lawyers, factors, insurance companies, financial consultants and private individuals. Mary Cummins was born and raised in Southern California. Cummins attended Beverly Hills Good Shepherd Catholic School and Beverly Hills High School. Besides being on the Dean's list, Mary Cummins was a top ten national swimmer and competed on the men's water polo team. Mary Cummins began college at the age of 15 attending the University of Southern California on scholarship, majoring in Psychology/Sociology. http://www.animaladvocates.us http://www.facebook.com/AnimalAdvocatesUSA

Sunday, June 25, 2023

Quality Control Standards for Automated Valuation Models, AVMs, Comment by Mary Cummins

RIN-2590-AA62, fannie mae, freddie mac,mary cummins,real estate appraiser, appraisal,avm, automated valuation method, dodd frank act,1125,los angeles,california

Type:Notice of Proposed Rulemaking

Number:RIN-2590-AA62

Group:Fannie Mae; Freddie Mac

Comment: Quality Control Standards for Automated Valuation Models

Comment: Quality Control Standards for Automated Valuation Models RIN-2590-AA62

This is a comment letter about the proposed change in the Dodd Frank Act section 1125.

I'm a certified and licensed real estate appraiser with over 40 years of experience. Automated Valuation Models (AVMs) should NOT be used by mortgage originators and secondary market issuers in determining the collateral worth of a mortgage secured by a consumer’s principal residence or any real property. The main reasons are because they are not reliable indicators of market value, the data can be manipulated and there are conflicts of interest.

AVMs are not accurate because the AVM never sees the actual property and doesn't know all its attributes. The actual size, effective age, condition, amenities, view, lot type, specific location in a neighborhood ... are not known or considered. These factors can affect the value by up to 100%. There is no quality control that can account for vital missing data which can only be known by a live licensed appraiser. AVMs are GIGO, i.e., Garbage In Garbage Out. In this case there just isn't enough data going into the valuation to make it accurate.

Dodd-Frank Act added section 1125 to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA); that section requires that AVMs meet quality control standards designed to: (1) ensure a high level of confidence in the estimates produced by automated valuation models; (2) protect against the manipulation of data; (3) seek to avoid conflicts of interest; (4) require random sample testing and reviews; and (5) account for any other such factor that the agencies determine to be appropriate. This letter is a comment on the change in section 1125.

AVMs don't ensure a high level of confidence in the home value estimates produced. They don't protect against the manipulation of data. There is a conflict of interest. AVMs currently can only consider address, tax size, tax bed/bath count, original tax age, pool/no pool and site size at most. Sometimes not all of this information is available. AVMs don't know if the property still exists or was burned down and demolished last year. AVMs don't know if it's in original 100 year condition with deferred maintenance or if the property was fully renovated, upgraded and expanded. AVMs don't know if the property is next to a water tower, power line, dump site or major freeway.

AVMs are even less accurate if the property is older, over/under improved, fair C5 or very good C1 condition, has a view or no view, is in an area with few recent sales or varies from the average home. Even the AVMs owners such as CoreLogic, Zillow,... state the AVMs are flawed and no substitute for a real estate appraisal by a licensed appraiser. Below is the disclaimer of Zillow.

"The Zestimate® home valuation model is Zillow’s estimate of a home’s market value. A Zestimate incorporates public, MLS and user-submitted data into Zillow’s proprietary formula, also taking into account home facts, location and market trends. It is not an appraisal and can’t be used in place of an appraisal."

As a real estate appraiser with over 40 years of experience I look at the different AVM values after I have finished an appraisal just for comparison. I can definitely state that AVMs are not a reliable indicator of value. I've seen AVMs state $2,000,000 value when the home just sold for $35,000,000 and appraised at $34,500,000. I've also seen AVMs state $1,500,000 value when the home just appraised at $500,000. The only time I've seen AVMs be close to accurate is when they are for average newer tract homes in average condition near median neighborhood values in an area with a sufficient number of recent sales. Even then they don't match actual market value.

Here is but one example. There are two identical homes on the same block in a development built in 1950. One is in original condition with deferred maintenance and no view. The other has been fully renovated, upgraded with an addition and has an ocean view. The difference in value would easily be 50% using an experienced appraiser. For a good measurement system, the accuracy error should be within 5%. AVMs are not accurate. There is no confidence in their valuations.

The data used in the AVMs can be easily manipulated. Zillow and other AVMs allow the homeowner, anyone, disgruntled ex tenant to edit the data for a property. If you edit the size, condition or other characteristics of the home, you can drastically change the value. The data can also be manipulated by Multiple Listing Service (MLS) data. Some AVMs consider MLS size, bed/bath count, view... As a real estate appraiser and past broker I can definitely state that MLS data is not accurate. Agents want to sell homes so they make them appear larger and newer. They Photoshop out power lines, water towers, freeways from the photos. They digitally stage them with pools, new lawns, new kitchens...which don't exist.

The AVM doesn't see the home or view so it values them the same if they are the same size in the same area. The person who owns the home in original condition will be happy because it will appraise over market value. The person who owns the upgraded home with the ocean view will not be happy because now they have to apply for a different loan with a full appraisal in order to get a higher loan or lower rate. I've been in this exact situation many times. The owner ends up paying two "appraisal" fees even though the first was just an AVM. They also waste time.

The ability to manipulate the data creates huge conflicts of interest. Sellers, agents want to sell home for the highest price. AMCs, Lenders want the highest value so they can easily make the loan to make money. Zillow is both an AVM and seller, agent. CoreLogic sells AVM data to Lenders and others. They want to make the deal to make money. The independent real estate appraiser only cares about actual market value. They don't make money on the transaction besides a small appraisal fee which is paid if they hit the value desired by the borrower or not.

Have we learned nothing from the Zillow fiasco? "The evidence is there for anyone wishing to look. In a disastrous bet made by Zillow – one in which the company staked its future on investing in residential real estate based on its own algorithms – the company lost $32 billion in market capitalization from February to November 2021. What did Zillow learn about its “Zestimates” when its own money was at stake?" (https://appraisersblogs.com/dazzled-by-wizardry-federal-mortgage-regulators-ignore-zillow-debacle )

I've studied AVMs in depth as have others. There is a lot of research already done on the inaccuracy of AVMs. Here's an article I wrote about AVMs which cites some of that research. https://mary--cummins.blogspot.com/2022/03/what-is-avm-automated-valuation-method.html

The Dodd Frank Act is the result of the 2008 Great Recession and Financial Crisis. The purpose was to protect consumers, banking and our economy so that would never happen again. The public will lose trust in the real estate industry, mortgage market and mortgage backed investments. This will negatively affect the real estate industry, banking industry, stock market and our economy. Please, do not use AVMs to value property which will be collateralized by loans.

Sincerely,

Mary Cummins
California Certified Real Estate Appraiser

My letter finally showed up in the comments

https://www.mortgagetranslations.gov/sites/default/files/rulemaking_comments/Attachments/16263/Mary%20Cummins%20letter%20AVM%20Comment%2006252023.pdf

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Monday, August 22, 2022

Resources for Appraisers to Legally Complete Appraisal Assignments, Mary Cummins Real Estate Appraiser

hud, fannie mae, freddie mac, uspap, appraisal foundation, gse, fha, mary cummins, real estate appraiser, real estate appraisal, los angeles, california

Below are links to resources to help appraisers legally complete appraisal assignments. They are statutes, rules, regulations and the law related to appraisal practice from HUD/FHA, GSE's Fannie Mae and Freddie Mac and other resources.

The Appraisal Foundation – Appraisal Standards Board (ASB), USPAP, Valuation Advisory Statements.

Appraiser Resource Pages

Guides and Handbooks

Fannie Mae Selling Guide – Part B4-1
Freddie Mac Seller/Servicer Guide – Topic 5600
HUD Housing Handbooks – HUD Handbook 4000.1
HUD Appraisal Report and Data Delivery Guide

Appraisal and Property FAQ

Uniform Appraisal Dataset (UAD) – Appendix D and other resources

Unacceptable Appraisal Practices and Fair Housing

Fannie Mae Unacceptable Appraisal Practices
Freddie Mac Unacceptable Appraisal Practices
HUD Mortgagee Letter 2021-27 – Fair Housing and General Appraisal, reference to I.B.1.d.i, II.A.3.a.v, II.D.2.

House Price Indices

Internal Revenue Service

*Links and linked data are subject to change. This article is as of the date of posting.

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Tuesday, March 29, 2022

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

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

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

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

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

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

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

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

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

Pledger Bishop, The Appraisal Institute, AI

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

Video 3 hours 31 minutes starts at 4 min 30 seconds

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

Mary Cummins

Sunday, March 27, 2022

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

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

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

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

Full report linked below.

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

Executive Summary:

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

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

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

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

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

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

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

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

Mary Cummins

Saturday, March 26, 2022

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

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

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

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

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

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

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

Other interesting findings from their report.

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

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

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

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

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

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

Commentary on PAVE’s conclusion:

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

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

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

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

Read the rest here.

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

Mary Cummins

Thursday, February 3, 2022

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

Thursday, October 7, 2021

Free Real Estate Appraisal Forms, URAR 1004, 1025, 1073, 1004MC, 1007, 216, Fannie Mae, Freddie Mac by Mary Cummins real estate appraiser

FREE real estate appraisal forms, 1004, 1072, 1025, 1004D, CDAIR, 1004MC, 216, 1007, Uniform Residential Appraisal Report URAR, Mary Cummins, real estate appraiser, Los Angeles, California, Uniform Appraisal Data Set Definitions, Exterior Only Residential Appraisal Report, Individual Condominium Unit Appraisal Report, Market Conditions Addendum to the Appraisal Report , Appraisal Update Completion Report, Freddie Mac, Fannie Mae, UAD, Small Residential Income Property Appraisal Report , One Unit Residential Appraisal Field Review Report, Operating Income Statement, Single Family Comparable Rent Schedule

Free real estate appraisal forms. These forms are blank in pdf and jpg format. I'm posting them so people can see the basic real estate appraisal forms used today. These are the most common real estate appraisal forms used in the United States. They are in alphabetical order. I'll be posting samples of each form filled out and completed next. I will also be posting a three part series about how to do a residential appraisal from pulling comparables to the inspection and the completion of the report. We don't just take photos and pull a value out of our hat. There is a lot of work that people don't see.

If you are an appraiser and want to buy the software with these forms to fill out, check out Alamode, Clickforms, ACIweb, Homeputer to name but a few. If you're thinking of forging an appraisal with these forms, good luck. These are just standard pdf copies that have a tiny watermark not visible in regular view. These are also not full appraisal reports with subject photos, comparable photos, plat map, sketch with measurements, subject detail page, subject map, comparable location map, copy of appraisal license, copy of appraiser's E&O Insurance...

Appraisal Update and or Completion Report Fannie Mae form 1004D Freddie Mac 442 March 2005 Mary Cummins real estate appraiser.PDF

Mary Cummins, real estate appraiser, Los Angeles, California, Appraisal Update and or Completion Report, form

Mary Cummins, real estate appraiser, Los Angeles, California, Appraisal Update and or Completion Report, 1004D form

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Appraisal%20Update%20and%20or%20Completion%20Report%20Fannie%20Mae%20form%201004D%20Freddie%20Mac%20442%20March%202005%20Mary%20Cummins%20real%20estate%20appraiser.PDF

Catastrophic Disaster Area Inspection Report CDAIR form Mary Cummins Real Estate Appraisal.PDF

Catastrophic Disaster Area Inspection Report CDAIR form Mary Cummins Real Estate Appraiser, Los Angeles, California

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Catastrophic%20Disaster%20Area%20Inspection%20Report%20CDAIR%20form%20Mary%20Cummins%20Real%20Estate%20Appraisal.PDF

Exterior Only Residential Appraisal Report Fannie Mae Freddie Mac form 2055 March 2005 Mary Cummins Real Estate Appraiser.PDF

Exterior Only Residential Appraisal Report Fannie Mae Freddie Mac form 2055 March 2005 Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Exterior%20Only%20Residential%20Appraisal%20Report%20Fannie%20Mae%20Freddie%20Mac%20form%202055%20March%202005%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

Individual Condominium Unit Appraisal Report Fannie Mae form 1073 Freddie Mac form 465 March 2005 UAD Mary Cummins Real Estate Appraiser.PDF

Individual Condominium Unit Appraisal Report Fannie Mae form 1073 Freddie Mac form 465 March 2005 UAD Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Individual%20Condominium%20Unit%20Appraisal%20Report%20Fannie%20Mae%20form%201073%20Freddie%20Mac%20form%20465%20March%202005%20UAD%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

Market Conditions Addendum to the Appraisal Report Fannie Mae form 1004MC Freddie Mac form 71 March 2009 Mary Cummins Real Estate Appraiser.PDF

Market Conditions Addendum to the Appraisal Report Fannie Mae form 1004MC Freddie Mac form 71 March 2009 Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Market%20Conditions%20Addendum%20to%20the%20Appraisal%20Report%20Fannie%20Mae%20form%201004MC%20Freddie%20Mac%20form%2071%20March%202009%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

One Unit Residential Appraisal Field Review Report Fannie Mae 2000 Freddie Mac 1032 March 2005 Mary Cummins Real Estate Appraiser.PDF

One Unit Residential Appraisal Field Review Report Fannie Mae 2000 Freddie Mac 1032 March 2005 Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/One%20Unit%20Residential%20Appraisal%20Field%20Review%20Report%20Fannie%20Mae%202000%20Freddie%20Mac%201032%20March%202005%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

Operating Income Statement Fannie Mae form 216 Freddie Mac form 998 August 1988 Mary Cummins Real Estate Appraiser.PDF

Operating Income Statement Fannie Mae form 216 Freddie Mac form 998 August 1988 Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Operating%20Income%20Statement%20Fannie%20Mae%20form%20216%20Freddie%20Mac%20form%20998%20August%201988%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

Single Family Comparable Rent Schedule Fannie Mae form 1007 Freddie Mac form 1000 August 1988 Mary Cummins Real Estate Appraiser.PDF

Single Family Comparable Rent Schedule Fannie Mae form 1007 Freddie Mac form 1000 August 1988 Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Single%20Family%20Comparable%20Rent%20Schedule%20Fannie%20Mae%20form%201007%20Freddie%20Mac%20form%201000%20August%201988%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

Small Residential Income Property Appraisal Report Fannie Mae form 1025 Freddie Mac form 72 March 2005 Mary Cummins Real Estate Appraiser.PDF

Small Residential Income Property Appraisal Report Fannie Mae form 1025 Freddie Mac form 72 March 2005 Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Small%20Residential%20Income%20Property%20Appraisal%20Report%20Fannie%20Mae%20form%201025%20Freddie%20Mac%20form%2072%20March%202005%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

Uniform Appraisal Dataset UAD Definitions Addendum Fannie Mae form Mary Cummins real estate appraiser.PDF

Uniform Appraisal Dataset UAD Definitions Addendum Fannie Mae form Mary Cummins real estate appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Uniform%20Appraisal%20Dataset%20UAD%20Definitions%20Addendum%20Fannie%20Mae%20form%20Mary%20Cummins%20real%20estate%20appraiser.PDF

Uniform Residential Appraisal Report URAR UAD Fannie Mae form 1004 Freddie Mac form 70 March 2005 Mary Cummins Real Estate Appraiser.PDF

Uniform Residential Appraisal Report URAR UAD Fannie Mae form 1004 Freddie Mac form 70 March 2005 Mary Cummins Real Estate Appraiser

http://www.marycummins.com/real_estate_appraisal_forms_mary_cummins_appraiser/Uniform%20Residential%20Appraisal%20Report%20URAR%20UAD%20Fannie%20Mae%20form%201004%20Freddie%20Mac%20form%2070%20March%202005%20Mary%20Cummins%20Real%20Estate%20Appraiser.PDF

Mary Cummins

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

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