*** FOR IMMEDIATE RELEASE ***
OUT-OF-CONTROL NONPROFIT MAY MERIT LOSS OF TAX-EXEMPT STATUS
VENTURA, Calif. (May 9, 2025) – An organization that influences valuations for federally sponsored mortgages is in turmoil.
Earlier in the year, the group’s former director of education and publications, Alissa Akins, 42,
alleged in a lawsuit she had been fired after she and her staff discovered that the answers to tests used to certify hundreds of appraisal applicants in Florida and Georgia had been falsified. Some of those applicants were told they had passed state accreditation exams when they had failed to meet state requirements. Those students are now working as certified appraisers.
Meanwhile, the group’s vice president has been accused of sexual harassment by 12 current and former employees of the organization. An article
published yesterday by The New York Times described the allegations against Craig Steinley, who is also a former president of the organization. The accusations from multiple women range from lewd comments to groping. The organization reportedly paid one woman $412,000 to settle a sexual harassment claim and fielded similar complaints from at least seven other women over the last decade, according to the New York Times.
But most troubling were allegations made in a lawsuit by its former CEO, who alleges self-dealing and infiltration by a lobbying group at cross-purposes to the organization’s stated mission. She explains the aim of her lawsuit in a video here. Last year, she told financial reporter Sasha Jones of the real estate publication Bisnow of the infiltration.
The organization is known as the Appraisal Institute. It is little-known to the public but has had an outsized effect on America’s government-backed mortgage system.
If allegations prove correct, the organization is at odds with its stated mission, the mission it reports to the Internal Revenue Service in filings used to justify its tax-exempt status.
For the past five years, by many accounts, it has been working to subvert a primary bulwark in America’s government-backed home mortgage system – its corps of appraisers. The resultant stifling of appraisers has emboldened and allowed the further politicization of mortgage giants Freddie Mac, Fannie Mae and the FHA. The marginalization of appraisers has also stimulated historic housing inflation as fewer buyers and sellers are sent back to renegotiate unsupported sale prices. It has also created great hidden risks to individuals and institutions holding U.S. mortgage-backed securities.
According to accounts by ousted Appraisal Institute chief executive Cindy Chance, it works in ways that are at loggerheads with its stated mission.
“Nonprofits live or die by their ability to achieve tax-exempt status at the federal and state level,” said appraiser and author Jeremy Bagott. “The IRS Form 990 is the document in which the nonprofit tells the public of its purpose, chronicles its good deeds and reports its financials.”
Revocation of tax-exempt status is considered a death sentence for many such organizations. It would require the organization to pay income taxes on revenue, including donations.
“When you have people in roles for long periods of time, who are friends for years, and they work in the regulatory space and then in the nonprofit advocacy space, and then in the for-profit space, and all of these interests get entangled, it is a situation that is ripe for corruption and self-dealing,” Chance, the recently cashiered CEO of the 16,000-member Appraisal Institute,
wrote in a recent email to reporter Sasha Jones of the real estate publication Bisnow. Chance, an ethicist and Ph.D. who was once the managing director of Georgetown University’s Kennedy Institute of Ethics, was brought in as an outsider. She was on the job only 13 months.
Special interests that reap an inherent benefit from limiting – or outright eliminating – appraisals in government-backed mortgages and shifting risks to taxpayers are the nonbank lenders, banks, homebuilders, Realtors and fintechs. Recent additions to the group are appraisal management companies, known in the industry as AMCs. They are intermediaries that have come to broker appraisals between banks and borrowers at considerable mark-ups. They, too, attempt to steer federal mortgage policy, although their aims differ.
The day after Chance’s damning email to Bisnow, the Appraisal Institute’s president, Sandra Adomatis,
issued an extremely narrow denial. “Let me be very clear: No board members own or operate an AMC.”
The Chicago-based Appraisal Institute
provides the following required mission statement in its 2022 Form 990 to the Internal Revenue Service: “Our mission is to empower valuation professionals through community, credentialing, education, body of knowledge and ethical standards.”
If a cabal on the organization’s board or among its staff is acting on behalf of special interests to promote the waiving of appraisals or eliminate the use of appraisals or discredit the appraisal profession, its filings would be fraudulent.
“If the allegations are true, the organization is in violation of its advocacy mission as stated in its IRS filings,” said appraiser and author Jeremy Bagott. In the interest of full disclosure, Bagott is a member of the Appraisal Institute.
Anyone wishing to report a nonprofit for engaging in program activities that directly conflict with those it reports for tax-exempt status can turn to the Tax Exempt and Government Entities Division of the Internal Revenue Service. Letters may be sent to TEGE Referrals Group, 1100 Commerce Street, MC 4910 DAL, Dallas, TX 75242, or emailed to
eoclass@irs.gov. Feel free to simply email this press release and request an investigation.
If you prefer forms, you may use Form 13909, Tax-Exempt Organization Complaint
Form 13909. But the Tax-Exempt Division will accept a simple letter of complaint.
After a referral is made, the IRS will mail an acknowledgment letter, unless the complaint was made anonymously. The complainant must provide a name and return address to receive an acknowledgment letter. The IRS doesn’t send acknowledgement letters by email. The IRS says it will keep your identity confidential when you make a referral, but you won’t receive a status or progress update whether or not they choose to investigate.
In addition, tax-exempt organizations are subject to oversight by state tax agencies. You may want to send a copy of your letter (or this press release) to your state tax agency. In California, for example, if a nonprofit's state tax exemption is revoked, it will be subject to California income tax and California’s annual franchise tax, which is imposed even if a corporation has no income.
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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.
www.bisnow.com
