Appraisal Bias

[Paul Isolda]

I just received an email from one of my best lending clients that listed 77 words that will cause an appraisal to be sent back for revision if found in the report. A lot of them make sense but included in the list are:
Illegal
Good
Average
Fair
Poor
Homogenous
House of Worship (if you can't say church, mosque, temple, synagogue or house of worship, what are you supposed to say when the subject abuts one?)
Young
Mature
Old
High
Low
Strong
Weak
Rapid
Slow
Fast
Diverse
Context is VERY important. IMHO, outright banning these words is completely ridiculous. If you looked at every appraisal I've written in the last 35 years I would guess you would find one or more of these words in 99% of them but not used in a way that indicates bias. I don't want to lose the client but we're going to have a problem if they send back every report that has any of these words used in a context that has nothing to do with bias.

 

[glenn walker]

Yeah there

I just received an email from one of my best lending clients that listed 77 words that will cause an appraisal to be sent back for revision if found in the report. A lot of them make sense but included in the list are:
Illegal
Good
Average
Fair
Poor
Homogenous
House of Worship (if you can't say church, mosque, temple, synagogue or house of worship, what are you supposed to say when the subject abuts one?)
Young
Mature
Old
High
Low
Strong
Weak
Rapid
Slow
Fast
Diverse
Context is VERY important. IMHO, outright banning these words is completely ridiculous. If you looked at every appraisal I've written in the last 35 years I would guess you would find one or more of these words in 99% of them but not used in a way that indicates bias. I don't want to lose the client but we're going to have a problem if they send back every report that has any of these words used in a context that has nothing to do with bias.

Yeah there are already a few post on this subject that AMCs had sent out to appraisers . All you can do is your best and not worry about it.

 

[Paul Isolda]

Surprisingly enough, this did not come from an AMC.

 

[glenn walker]

Surprisingly enough, this did not come from an AMC.

HUD has a Similar List and so do Banks

 

[shrubberyvaluation]

HUD has a Similar List and so do Banks

Some of those are on FNMA forms, is FHA not allowing FNMA forms now? Illegal, Age, Rapid...

 

[J Grant]

Actually, the way it is addressed on the Fannie website as I recall is you can use comparative words like low, but there has to have a reference of what it is lower than ( as an example)

That said, the discouraging or banning inclusion of simple comparative words such as low or high is ludicrous, since the sales COMPARISON approach is by its very nature a comparative approach.

 

[glenn walker]

Some of those are on FNNo MA forms, is FHA not allowing FNMA forms now? Illegal, Age, Rapid...

No FHA always has used Fannie Forms for many years. The HUD list has been out for many years but keeps growing . I guess words on the forms are not the same as words appraisers use

 

[glenn walker]

Actually, the way it is addressed on the Fannie website as I recall is you can use comparative words like low, but there has to have a reference of what it is lower than ( as an example)

That said, the discouraging or banning inclusion of simple comparative words such as low or high is ludicrous, since the sales COMPARISON approach is by its very nature a comparative approach.

Lower or higher not Low or High

 

[glenn walker]

Folks we have now entered the Twilight Zone

 

[TerryRohrer]

I think everyone should copy and paste the full text of FNMA's Quality and Condition ratings descriptions in a text addendum so that all the scanners will get a crack at them. A partial list of their subjective terms includes: usually, unique, typically, exceptionally, refinements, highly, high or very high, above-standard, significant, well, acceptable standards, stock, adequate, some, may, economy, basic, main, plain, readily, minimal, limited, minimum, inexpensive, lower, may, often, simple, unskilled, minimal, substandard, non-conforming, recently, rehabilitated, remanufactured, like-new, significant, extended, little, virtually, recently, refinished, outdated, updated, current, almost, similar, well, renovated, limited, normal, some, not every, short-lived, estimated, majority, need, useable, exceeded.