HUD Files Against Appraiser & Rocket Mortgage

[Joe Flacco]

Using comps in all directions from the subject property is not very high on my priority list when selecting comps.

You first define the neighborhood. If your subject property is at the western end of the neighborhood then your comps are most likely going to all be located to the east unless there is a reason you have to leave the neighborhood.

 

[George Hatch]

They're alleging that the appraiser did differently in that same neighborhood for white owners. In terms of looking for conduct and consistency that's our matched pair right there. The neighborhood is the same but the property owners are different (even if the other properties were SFRs rather than 2-unit properties). Even if someone is going to be wrong about how the location plays out, if they're consistently wrong about it that at least demonstrates equal treatment. As opposed to different treatment.

"Location" is just about the easiest adjustment factor to develop. Not just by direct comparison in the sale prices from these different areas but also when the properties have rents and your assignment includes a rental survey. If the rents in Neighborhood#1 are more similar to the local rents than those in Neighborhood#2 thats a simple observation to make and a valid reason for considering the one location to be more similar than the other.

This complaint is different from the others because it looks like they didn't just get a 2nd or 3rd "whitewashed" appraisal after complaining about the 1st one, and then just jump straight to the conclusion that the only possible reason was racial bias, exclusive of any other factor involving competency. They apparently looked at a bunch of other appraisals and how those appraisers treated comp selection and location, and they apparently looked at this appraiser's prior conduct in that same neighborhood. If what they're alleging about that different treatment is factually accurate then this appraiser did themself in by their own hand.

 

[djd09]

Using comps in all directions from the subject property is not very high on my priority list when selecting comps.

You first define the neighborhood. If your subject property is at the western end of the neighborhood then your comps are most likely going to all be located to the east unless there is a reason you have to leave the neighborhood.

the property probably is on the border of the city...like fudges house

 

[George Hatch]

Using comps in all directions from the subject property is not very high on my priority list when selecting comps.

You first define the neighborhood. If your subject property is at the western end of the neighborhood then your comps are most likely going to all be located to the east unless there is a reason you have to leave the neighborhood.

Exactly. This is where building your theme early in your report comes in handy, starting with the neighborhood analysis AND continuing into the rental survey and SC before you get to commenting on any of the comps.

 

[djd09]

the only theme i see is the lack of transparency...you would think TAF would be up in arms about it for the sake of public trust

 

[djd09]

really, if i was conducting an appraisal and i didn't like some party (like the unethical AMC stakeholders) i would just not do an appraisal for them probably like every other appraiser would do...but nope they want to continue with the conspiracy theory that the lenders and appraisers are in cahoots to devalue certain neighborhoods

 

[Ariba]

In today's appraising world, accusations of racial bias can be expected. However, it's essential to consider that the appraisal may have been poor due to reasons unrelated to race. The appraiser focused on areas with a higher concentration of Black residents, but what does "relatively" mean in this context? Additionally, other factors, such as the owner's refinancing history and financial behavior, should be considered. It seems the borrower might be seeking attention as an activist. The bottom line is that we do not have all the facts and are just speculating.

 

[djd09]

Multiple Appraisals of the Subject Property​

If the lender obtains more than one appraisal for a loan due to applicable law, regulation, lender policy, or otherwise, the lender must

• adhere to a policy of selecting the most reliable appraisal rather than the appraisal that states the highest value,
• document the reasons for relying on the appraisal, and
• submit the appraisal selected by the lender through the UCDP prior to delivery.

These requirements also apply if the lender considers an appraisal to be deficient (see B4-1.3-12, Appraisal Quality Matters).

they should of got a second appraisal...

 

[George Hatch]

If they can prove the facts of the appraisers' conduct then it doesn't matter if the complaint was made by someone with ulterior motives. They're not the ones with the professional obligation. Nobody expects a complainant to be unbiased or impartial to their own situation.

It appears (TO ME) that HUD approached this complaint in a manner that we should want to see for all such complaints. They apparently looked to see what other multiple appraisers had previously done with this property going back some years and they looked to see what this appraiser's own prior conduct had been in that neighborhood. In other words, they didn't just start with the outcome and then back into a predetermined conclusion as has been the case with all or almost all of the other complaints being made in the media.

One question I would ask you all is "What else could HUD have added to their process that would improve the fairness aspect?" Offhand, I can't think of anything else they could have done in order to improve the fairness factor.

 

[djd09]

HUD is filled with woke jokes...ask crooked coumo