Mejappz
Elite Member
- Joined
- Dec 16, 2005
- Professional Status
- Certified Residential Appraiser
- State
- Florida
*** FOR IMMEDIATE RELEASE ***
HUD INSPECTOR GENERAL OUSTED; COULDN’T HAVE COME SOON ENOUGH
VENTURA, Calif. (January 30, 2025) – Days after taking the oath of office, President Trump handed 17 inspectors general their walking papers. This included the U.S. Department of Housing and Urban Development’s lethargic Inspector General Rae Oliver Davis. Good riddance to this particular seat-warmer. One California real property appraiser, Ken Mullinix, whom HUD has reduced to a character from a Kafka novel, is skeptical that reform at the dysfunctional agency can ever truly occur.
Inspectors general at the Defense Department, State Department, Energy Department, Department of Veterans Affairs, Transportation Department and HUD were all shown the door.
At least Davis left peaceably. One entitled counterpart, Inspector General Phyllis Fong at the Agriculture Department, had to be removed from her office by security guards. The entrenched bureaucrat refused to comply with her firing, sources familiar with the matter told Reuters.
Mullinix now believes he is one of between 900 and 1,300 state-licensed real property appraisers targeted for lengthy and disjointed investigations by HUD for simply doing their jobs. Appraisers, engaged uniquely for their independence, must have the leeway to occasionally conclude an opinion of value that results in sending a buyer and seller back to the negotiating table.
Through its HUD Exchange web site, the agency signals to nonprofits and private attorneys to bring complaints against appraisers when the latter arrive at values that displease sellers or put commissions of real estate salespeople at risk. For more than two years, Mullinix has become a professional defendant in an unending investigation due to an opinion of value that failed to facilitate a borrower’s deal and drew a discrimination complaint to HUD.
The campaign to delegitimize and ultimately sideline appraisers from federally backed mortgages has been a big driver of the current housing inflation.
Appraisers targeted by HUD have reached out to Mullinix for advice. He has provided them with useful knowledge about the ways in which HUD has been relying on private “discrimination bounty hunters” who, unlike federal employees, escape Title V conflict-of-interest constraints. The freelancers identify themselves as HUD employees. They use HUD email addresses.
“I’ve helped fellow appraisers in the same boat. I share what I’ve uncovered about HUD’s investigation protocols, said Mullinix. “When they see how HUD’s contract investigators have been violating HUD’s own policies, they come to understand what’s happening to them and what’s happening to their civil rights.
“It was clear to me that my investigator, a former lawyer on contract with HUD, had not read the agency’s own investigative manual, which is designed to protect the rights of those being investigated. It also became clear to me that the investigator knew very little about real estate economics or appraisal practice.”
HUD’s harassment of the nation’s appraisers has been part of a wider campaign bankrolled by the housing lobby to eliminate appraisers as a key bulwark in federally backed mortgages. The stage-managed campaign includes the sending of unsigned robo-complaints to state licensing boards by mortgage giants Freddie Mac and Fannie Mae, the censorship of appraisal reports by Freddie Mac, efforts to keep appraisers from viewing the properties they appraise and a smear campaign via a series of well-funded harassment lawsuits that claim discrimination.
The chief architect of the campaign, former HUD Secretary Marcia Fudge, is now a lobbyist. While cabinet secretary, she stoked a malicious narrative that the nation’s state-licensed appraisers value homes based on the race of the property owner. This canard has been successfully used to limit the involvement of appraisers in federally backed mortgage lending.
Last year, Mullinix contacted the Office of the Inspector General for HUD through its hotline designed as a clearing house to report fraud, waste and abuse at the agency. He spoke to an individual who advised him to complete a form, which he did, and file it with the Office of the Inspector General. After four months of silence, he called the hotline again. The person on the other end advised him to file a U.S. Freedom of Information Act request for information on his case’s status. He received no reply to his FOIA request, which violates federal law.
Inspector General Davis may not have needed to be pried from her office like Inspector General Fong, since most HUD employees simply telework. HUD offers an unusually high number of no-show or limited-show jobs to its nearly 8,000 employees. HUD provides fully remote work for economists, HR specialists, contract professionals, auditors and cybersecurity workers. Last year, more than 80% of its employees had an approved telework agreement, according to a recent Federal Employee Viewpoints survey.
HUD has also been promoting the use of supposedly reformed white-collar criminals, perjurers and others to become so-called “fair-housing testers.” Under Fudge, the agency initiated a federal rulemaking in 2023 to allow convicted perjurers and white-collar criminals to receive federal grant money to set up dubious sting operations directed at real estate professionals and housing providers. You can see the rulemaking here.
The difference between the ousted HUD Inspector General Davis and Mullinix? Davis will wind up at a prestigious law firm, on K Street or back in government. Mullinix, who has been a professional full-time defendant for over two years, has had his livelihood and reputation ruined at the hands of HUD.
# # #
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.
