Freddie Mac vs Appraiser Bias

[djd09]

AI Showed this Video and Anger Ensued​

Appraisal Institute Shows A Canadian “Racial Bias” Sting Video And The Audience Almost Came To Blows →

by Jonathan Miller · Published November 7, 2022 · Up

At a recent meeting, the Appraisal Institute showed this video and anger ensued. The audience was deeply divided, and the conversations almost came to blows. My guess from past actions of AI CEO to remove the diversity committee would assume the FOJs want to continue to hope that this issue goes away and will continue to do little as an organization. And without Rodman’s leadership on his personal passion point and Super Duper’s dear in headlights compassionate pleas on how awful this is but does nothing because it’s completely up to Jim even though technically it absolutely isn’t (gasp for air), these stories and situations expand to daylight without the industry trying to solve it. At this point, it’s probably better they do nothing and suffer their fate. The issue is not going away.


So the New York Times story: Widespread Racial Bias Found in Home Appraisals, Bloomberg: New Federal Data Shows the Home Appraisal Gap Is Getting Worse, Inman: Those claims of appraisal bias? Another study backs them up, NPR: How home appraisal methods can end up perpetuating racial inequality and The Real Deal: Appraisal gap worsened as racial disparity persists shows that is too late to provide credible input. The cowardice of Appraisal Institute and Appraisal Foundation leadership on this topic is forever etched in stone. Congratulations. Were all those first-class airplane tickets to boondoggles really worth it?

The Appraisal Institute Showed this Video and Anger Ensued

The Appraisal Institute showed this video & anger ensued. The audience was deeply divided & the conversations almost came to blows.

appraisersblogs.com

 

[OSU Beavers]

AI Showed this Video and Anger Ensued​

Appraisal Institute Shows A Canadian “Racial Bias” Sting Video And The Audience Almost Came To Blows →

by Jonathan Miller · Published November 7, 2022 · Up

At a recent meeting, the Appraisal Institute showed this video and anger ensued. The audience was deeply divided, and the conversations almost came to blows. My guess from past actions of AI CEO to remove the diversity committee would assume the FOJs want to continue to hope that this issue goes away and will continue to do little as an organization. And without Rodman’s leadership on his personal passion point and Super Duper’s dear in headlights compassionate pleas on how awful this is but does nothing because it’s completely up to Jim even though technically it absolutely isn’t (gasp for air), these stories and situations expand to daylight without the industry trying to solve it. At this point, it’s probably better they do nothing and suffer their fate. The issue is not going away.


So the New York Times story: Widespread Racial Bias Found in Home Appraisals, Bloomberg: New Federal Data Shows the Home Appraisal Gap Is Getting Worse, Inman: Those claims of appraisal bias? Another study backs them up, NPR: How home appraisal methods can end up perpetuating racial inequality and The Real Deal: Appraisal gap worsened as racial disparity persists shows that is too late to provide credible input. The cowardice of Appraisal Institute and Appraisal Foundation leadership on this topic is forever etched in stone. Congratulations. Were all those first-class airplane tickets to boondoggles really worth it?

The Appraisal Institute Showed this Video and Anger Ensued

The Appraisal Institute showed this video & anger ensued. The audience was deeply divided & the conversations almost came to blows.

appraisersblogs.com

No interior inspections were allowed = varying opinions of value.

BTW the Black homeowner got the highest value.

 

[djd09]

No interior inspections were allowed = varying opinions of value.

BTW the Black homeowner got the highest value.

AI has probably developed a class to inform the independent appraiser of their ignorance and they will teach you all about it for a small fee.

anyways, the war is meant to be continious

 

[Zoe]

Okay, on rural and very heterogeneous areas where comparables have to cover differences in location, I can see where an algorithm might be able to show a difference in property values on competing properties based on race. I don't think AI or NAIFA or any appraisal organizations or GSE's have that data on things like race or other prohibited basis on discrimination. I could be wrong. There are many more prohibited discrimination bases other than race on lending and many businesses cannot discriminate on a prohibited basis.

HUD collects that data. I don't know who they share it with. I am sure they share it with a lender if they think lender is redlining or being discriminatory.

 

[djd09]

The prior and current misconduct at these lending institutions, including Fannie and Freddie, literally brought the general economy to it's knees.

so trust them

 

[Terrel L. Shields]

NAIFA

I am certain they don't since they no longer exist as such.

Yes, publishing each and every appraisal in their file is a great idea.

The problem is solvable with money...money no bank wants to spend. So what could we do? We could, very easily produce data on every sale within 5 miles. Using all those sales in the grid. We could then identify all sales in the past 3 years in the defined market area - which we would require that defined market area to be provided by the lender. Then we would, in that same area, identify all houses that are within 20% of the same age, 20% of the same size, and basically just ID and analyze ever sale in a given market area from the previous 3 years. Then we might have 83 sales - or only 15.... in any event, we crunch them all mechanically (like the AVM does) and use a F/F provided multi-linear Regression and out the end product of that analysis - pops up the exact number to the dollar. That's your appraisal. Fee? Hmmm, prolly about $10k per house.

 

[Terrel L. Shields]

Even the National Parks are racists... and farmers are racist because they don't have any black tractors

 

[Terrel L. Shields]

Classical music is racist

 

[TerryRohrer]

Even the National Parks are racists... and farmers are racist because they don't have any black tractors
View attachment 69737

The problem definition is the problem. There are essentially no barriers to entry to employment by national parks. Therefore, there is an explanation that has absolutely nothing to do with race.

 

[djd09]

3. Can the appraiser or trainee of the appraiser make a personal inspection of the subject property to obtain photos and a floor plan and still complete the desktop appraisal?

No. Freddie Mac defines a desktop appraisal as an appraisal assignment for which the scope of work does not include field work by the appraiser. If the appraisal’s scope of work includes a personal inspection of the subject property, the appraisal assignment no longer meets the definition of a desktop appraisal.


they got solutions