A Black couple ‘erased themselves’ from their home to see if the appraised value would go up. It did - by nearly $500,000

[Elliott]

Here's a simulation of what two investigators at the CA state board will be required to do do if The Box is check on a value complaint:

Assembly Bill No. 948
"This bill, among other things, would require the bureau to place on an existing complaint form a check box asking if the complainant believes that the opinion of the value of the real estate is below market value. The bill would also require the bureau to collect specified demographic information, voluntarily provided, regarding sellers, those seeking to refinance, buyers, or an authorized representative in real estate transactions making a complaint. The bill would require the bureau to compile the collected demographic information and report that information to the Legislature on or before July 1, 2024."

 

[CGinMN]

None of these accusatory 'experiments' ever account for the fact that it's a different appraiser the second time.

This is HUD/Fair Housing folks talking about the Marin City case on September 15, months before the case was publicly announced.

Sometimes you may have used you may have heard the term used - whitewash. They whitewashed their house. And their friend, their White friend came in and put up her personal pictures. They changed the paintings. They changed the art in the home. And then the second appraisal was ordered and performed, and that second appraisal came back at almost $500,000 more. So that's an example of what I mean when I say complainant-based testing. It was the same subject property. They didn't change the subject property. They just changed out the folks who were in the property. And they used the complainants' original experience as one of the test parts. Hopefully that makes sense.

Now in this instance, the second follow up test part may need not be conducted by the original appraiser. It doesn't need to happen.

That's part of the overall strategy. No need to use the same appraiser to demonstrate discrimination. Anyone who does litigation work knows, there's always a high and a low appraisal by 2 different appraisers, otherwise, there wouldn't be a case.

As anyone who has spent time around appraisers knows, if you put 10 appraisers in a room, you will get 12 opinions.

A $500k gap between 2 appraisers doesn’t speak very well to our collective credibility. I think there is a public perception that appraisers “decide” value, and our opinions don’t need to be supported. And, there are appraisers making unsupported opinions, so who can blame them for thinking this?

Fomenting these lawsuits, would be my take.

I think that mostly falls on HUD. The one thing these lawsuits have in common is that a fair housing org is attached as a plaintiff. They’re the ones putting out the press releases and creating the attention, which presumably brings in more aggrieved folks and has people believing discrimination is systemic. The Marin City case makes a great headline because it’s $500k - so even if it is summarily dismissed, they get "good" press. Each of the fair housing orgs throughout the country gets hundreds of thousands in funding from HUD (through FHIP, and the PEI grants) to investigate fair housing violations and appraisal discrimination. As the link in post 42 show, HUD is giving them lots of support and direction.

MS. HILL [01:30:59]: Great. Thank you. And then an additional question that comes from someone who runs a private fair housing organization. What she's asking is that in talking with some of her colleagues, she's wondering whether there's a cohesive investigative plan being used across HUD regions for handling appraisal and lending investigations, which is important in case there are lenders or appraisers being investigated who are working across regions. So the question is, is HUD doing anything to ensure consistency in investigations between and across the regions?

MR. MELTESEN - HUD Regional Director [01:31:44]: Yeah. So the regions are working very closely with our headquarters staff to coordinate the investigation of these investigations.

Best way to avoid lawsuits is to inflate above market value in appraisals for refis.

I understand the sentiment but I don’t agree. IMO the best way to avoid a lawsuit is to do good work, support your opinion, know your markets, understand the history, especially the local history, and treat borrowers with dignity and respect. Be aware of the language you use, and your biases toward areas and people, so that they don’t creep into your analysis and reporting.

This is from the civil rights lawyer, which I was happy to read:

MS. HILL [01:41:41]: I hope you're ready to go. We have a question about disparate impact when it comes to discriminatory appraisals. And the question is who is the liable party for a disparate or an appraisal that may have a disparate impact? Would it be the appraiser? An appraisal management company? Anyone else? Or all of the above. Sort of what is the who’s liable in a case where an appraisal or the policies of an appraiser may have a disparate impact?

MR. DANE [01:42:14]: Yes. I would say that the most likely the one with the highest exposure, let me put it that way is whatever company or division, or agency adapted the policy, itself. It could also extend some exposure to anyone who implements the policy. There are plenty of cases out there indicating that implementers of discriminatory policies could be held liable even if they did not know that the policy had a disparate impact. The one actor in this process who probably has the least exposure - I'm not going to say zero - but the least exposure would be the frontline appraiser, who's just following the rules. You know, if there is a policy or practice that the appraiser's boss or employer or lender is saying you must conduct the appraisal this way. And then it turns out that that way or that policy has a disparate impact. Without intent. Frankly, I would probably not try to sue that appraiser. Because the appraiser has no power to change the policy. Has no authority to have influence on what the policy is and so forth. I would want to go after and I think the law would probably tag exposure to liability on the entity or individuals who actually created the policy and insisted that it be followed

 

[djd09]

Prince George’s Realtors Association responds to WUSA 9 investigation; declines to release results of survey into appraisal bias allegations​

Despite the allegations of appraisal bias, PGCAR said home values in Prince George’s County have increased 6% and that appreciation rates have outpaced neighboring Montgomery County and Northern Virginia. County homeowners, on the other hand, have grown increasingly alarmed by the allegations and their individual experiences. A group of homeowners, real estate agents, brokers and community members formed a group called the Fair and Unbiased Appraisal advocates. The group’s goal is to educate other homeowners about the home appraisal process and to fight back against alleged bias.

Prince George’s Realtors Association responds to WUSA 9 investigation; declines to release results of survey into appraisal bias allegations

In a Saturday statement, the organization declined to release the results of its survey after telling WUSA 9 such results would be made available by October.

www.wusa9.com

yes, the biased parties want to know why the appraiser did not hit their number(s)

 

[RCA]

This is HUD/Fair Housing folks talking about the Marin City case on September 15, months before the case was publicly announced.

Sometimes you may have used you may have heard the term used - whitewash. They whitewashed their house. And their friend, their White friend came in and put up her personal pictures. They changed the paintings. They changed the art in the home. And then the second appraisal was ordered and performed, and that second appraisal came back at almost $500,000 more. So that's an example of what I mean when I say complainant-based testing. It was the same subject property. They didn't change the subject property. They just changed out the folks who were in the property. And they used the complainants' original experience as one of the test parts. Hopefully that makes sense.

Now in this instance, the second follow up test part may need not be conducted by the original appraiser. It doesn't need to happen.

That's part of the overall strategy. No need to use the same appraiser to demonstrate discrimination. Anyone who does litigation work knows, there's always a high and a low appraisal by 2 different appraisers, otherwise, there wouldn't be a case.


A $500k gap between 2 appraisers doesn’t speak very well to our collective credibility. I think there is a public perception that appraisers “decide” value, and our opinions don’t need to be supported. And, there are appraisers making unsupported opinions, so who can blame them for thinking this?


I think that mostly falls on HUD. The one thing these lawsuits have in common is that a fair housing org is attached as a plaintiff. They’re the ones putting out the press releases and creating the attention, which presumably brings in more aggrieved folks and has people believing discrimination is systemic. The Marin City case makes a great headline because it’s $500k - so even if it is summarily dismissed, they get "good" press. Each of the fair housing orgs throughout the country gets hundreds of thousands in funding from HUD (through FHIP, and the PEI grants) to investigate fair housing violations and appraisal discrimination. As the link in post 42 show, HUD is giving them lots of support and direction.

MS. HILL [01:30:59]: Great. Thank you. And then an additional question that comes from someone who runs a private fair housing organization. What she's asking is that in talking with some of her colleagues, she's wondering whether there's a cohesive investigative plan being used across HUD regions for handling appraisal and lending investigations, which is important in case there are lenders or appraisers being investigated who are working across regions. So the question is, is HUD doing anything to ensure consistency in investigations between and across the regions?

MR. MELTESEN - HUD Regional Director [01:31:44]: Yeah. So the regions are working very closely with our headquarters staff to coordinate the investigation of these investigations.


I understand the sentiment but I don’t agree. IMO the best way to avoid a lawsuit is to do good work, support your opinion, know your markets, understand the history, especially the local history, and treat borrowers with dignity and respect. Be aware of the language you use, and your biases toward areas and people, so that they don’t creep into your analysis and reporting.

This is from the civil rights lawyer, which I was happy to read:

MS. HILL [01:41:41]: I hope you're ready to go. We have a question about disparate impact when it comes to discriminatory appraisals. And the question is who is the liable party for a disparate or an appraisal that may have a disparate impact? Would it be the appraiser? An appraisal management company? Anyone else? Or all of the above. Sort of what is the who’s liable in a case where an appraisal or the policies of an appraiser may have a disparate impact?

MR. DANE [01:42:14]: Yes. I would say that the most likely the one with the highest exposure, let me put it that way is whatever company or division, or agency adapted the policy, itself. It could also extend some exposure to anyone who implements the policy. There are plenty of cases out there indicating that implementers of discriminatory policies could be held liable even if they did not know that the policy had a disparate impact. The one actor in this process who probably has the least exposure - I'm not going to say zero - but the least exposure would be the frontline appraiser, who's just following the rules. You know, if there is a policy or practice that the appraiser's boss or employer or lender is saying you must conduct the appraisal this way. And then it turns out that that way or that policy has a disparate impact. Without intent. Frankly, I would probably not try to sue that appraiser. Because the appraiser has no power to change the policy. Has no authority to have influence on what the policy is and so forth. I would want to go after and I think the law would probably tag exposure to liability on the entity or individuals who actually created the policy and insisted that it be followed

That last paragraph: Yes and no. Yes the appraiser has been given methods of appraisal that are extremely flawed. The greatest flaw is the lack of constraints or methods to measure intangible (or if you prefer "not capable of being directly and accurately measured") features such as quality, condition, view, functional utility, and design. The appraisal establishment lets appraisers pull adjustments for these things out of thin air without constraint. They have rubber-stamped garbage methods.

And I would say "No" because I know that even if you give appraisers sound methods, appraisals are still difficult and if appraisers do not have the stamina to work on an appraisal until every important part is kosher, they will likely fail to provide a replicable value. It is not easy work. It takes intelligence and stamina.

So, we need better protocols and we need to better job of selecting competent appraisers and educating them. BOTH are required.

 

[Elliott]

Since Biden's poll numbers are in the toilet, does it follow that his 'made up' racist appraisals idea is also a failure? While the usual agencies and groups have obediently lined up to say, "See, here's our sketchy proof" isn't it more likely that is just another redistribution scheme which will end in failure similar to the scams associated with TARP?

 

[George Hatch]

At issue in this lawsuit is the appraiser's performance within the context of the current expectations, not some hypothetical set of expectations which aren't commonly held by appraisers and the users of appraisals.

Where we might think appraisal technology should go forward in the future is completely irrelevant to the lawsuit at hand.

 

[Elliott]

From Trulia (remember them?), on 635 Drake. I would appreciate being able to read the lawsuit. I thought at some point this couple at one point had a $1.5 report and that is there basis for discrimination. Its a case which seems froth with mixed appraisals for different purposes.

 

[RCA]

At issue in this lawsuit is the appraiser's performance within the context of the current expectations, not some hypothetical set of expectations which aren't commonly held by appraisers and the users of appraisals.

Where we might think appraisal technology should go forward in the future is completely irrelevant to the lawsuit at hand.

I don't thinks so at all. I love the term "current expectations". What kind of "expectations" are you talking about? Something specific, objective and firm or something nebulous and wishy-washy? Or in other words, describe those expectations as best you can, and I will shoot holes through them.

The methods I use are objective. Another appraiser who follows the same method should come up with the same result in terms of final value. There would be no difference. For example, I am just finishing an appraisal of beach front homes, where the distance to the beach measured in feet is one of the primary driving factors of price. There are 600+ homes in the PUD that come into consideration. I have to measure distance from the beach for all them. Stamina. I also measure visual obstructions, - approximately. Oh yes, there is the golf course, we need a column for Golf with an indication for which homes are on the edge of the golf course. Work. I use R/earth for accurate regression. The residual is the accurate measure of all intangible features. I study the comps for differences between themselves their ranked RS score and the subject, then assign an estimated RS score to the subject. I let my software system grind and out pops something like $3M +/-. You can change the random seed to the regression -- and you will pretty much get the same value. You can change the other parameters that do impact output - but the value that pops out is pretty stable. I have a protocol, I publish it, and another appraiser who follows it should get the same result pretty much. But, ..., you also need a protocol for determining whether the results make sense. Sometimes there are bugs in the software or data that need to be ironed out, or something you missed. If you stick with it, you should have a workable model in the end --- and different appraisers should come up with about the same value.

 

[RCA]

From Trulia (remember them?), on 635 Drake. I would appreciate being able to read the lawsuit. I thought at some point this couple at one point had a $1.5 report and that is there basis for discrimination. Its a case which seems froth with mixed appraisals for different purposes.

View attachment 57127

This is so ridiculous, you don't even have a satisfactory method of appraisal. You are washed up before you even begin.

 

[J Grant]

Since Biden's poll numbers are in the toilet, does it follow that his 'made up' racist appraisals idea is also a failure? While the usual agencies and groups have obediently lined up to say, "See, here's our sketchy proof" isn't it more likely that is just another redistribution scheme which will end in failure similar to the scams associated with TARP?

Surprise, you found a way to work in your anti Biden narrative. The last thing Biden is concerned with is appraisals right now, but regardless, you and a few others here keep intruding your personal hatred of this admin into appraisal topics. Nearly every thread and post you make about racial bias in appraisal has an ugly undertone behind it, and damages appraiser credibility. Regulators do have access to read this bb fwiw.

Keep your bigoted politics in the water cooler.