Is the GSE's Appraisal Modernization Really Just Mass Appraisal?

[Mejappz]

The article confirms that AVMs used by the GSEs lack consistent regulations, quality control, and especially appraiser assistance, unlike Mass Appraisal methods. I agree with the article that TAF should not interfere with the existing standards for AVMs, which have been in place since 2003. TAF has no authority or expertise to impose its criteria on AVMs, which differ from traditional appraisals.

Perhaps the most concerning aspect of Value Acceptance is its potential to erode market integrity. By prioritizing expediency over accuracy, the process undermines the fundamental principles of transparency and accountability essential to a healthy housing market. In the absence of robust valuation practices, the risk of market distortions, speculative bubbles, and systemic vulnerabilities looms large, posing significant threats to economic stability and consumer welfare. Moreover, the adverse effects of regressive value models are disproportionately borne by marginalized communities and underserved regions. By perpetuating disparities in property valuation and financing accessibility, the process could exacerbate existing inequalities.

This also raises concerns regarding public safety. These are unlicensed individuals who are going into your home, taking detailed video scans, photos and notes. Where is that data stored? Is it on the phone of the data collectors? What recourse, if any, would a consumer have if they were harmed by a PDC, such as their property being damaged or their private information shared without their consent? In a display of caution, the U.S. Dept. of Veterans Affairs (VA) has cited the prioritization of veteran’s safety as a primary reason for refraining from adopting the Value Acceptance program.

Is the GSE's Appraisal Modernization Really Just Mass Appraisal?

Mass Appraisal models often demonstrate bias, over-assessing the value of inexpensive houses while undervaluing more expensive ones.

appraisersblogs.com

 

[Tiffany Gibbons]

The article confirms that AVMs used by the GSEs lack consistent regulations, quality control, and especially appraiser assistance, unlike Mass Appraisal methods. I agree with the article that TAF should not interfere with the existing standards for AVMs, which have been in place since 2003. TAF has no authority or expertise to impose its criteria on AVMs, which differ from traditional appraisals.

Perhaps the most concerning aspect of Value Acceptance is its potential to erode market integrity. By prioritizing expediency over accuracy, the process undermines the fundamental principles of transparency and accountability essential to a healthy housing market. In the absence of robust valuation practices, the risk of market distortions, speculative bubbles, and systemic vulnerabilities looms large, posing significant threats to economic stability and consumer welfare. Moreover, the adverse effects of regressive value models are disproportionately borne by marginalized communities and underserved regions. By perpetuating disparities in property valuation and financing accessibility, the process could exacerbate existing inequalities.

This also raises concerns regarding public safety. These are unlicensed individuals who are going into your home, taking detailed video scans, photos and notes. Where is that data stored? Is it on the phone of the data collectors? What recourse, if any, would a consumer have if they were harmed by a PDC, such as their property being damaged or their private information shared without their consent? In a display of caution, the U.S. Dept. of Veterans Affairs (VA) has cited the prioritization of veteran’s safety as a primary reason for refraining from adopting the Value Acceptance program.

Is the GSE's Appraisal Modernization Really Just Mass Appraisal?

Mass Appraisal models often demonstrate bias, over-assessing the value of inexpensive houses while undervaluing more expensive ones.

appraisersblogs.com

Yes, I like how the article called out Zillow using its own algorithm and losing a bunch of money on its flipping ventures. So did Redfin. As anyone who has actually ever worked in mass appraisal for assessment for as valorem tax purposes would know, lots of people appeal their "mass appraised" property appraisals. That value can be appealled every year, not just in reappraisal years. Won't that whole consequence be fun for the "Value Acceptance" and "Appraisal Modernization" folks at the GSEs? How about it is actually"biased" not to get an appraisal to make sure innocent borrowers do not pay too much? TAF has no clue, most of the folks meeting with them from IAAO about AVMs are elected politicians (assessors), and not appraisers who use AVMs. Assessor Appraisers are tasked with using arms length sales for their mass valuation models. They will have the same issues with this crap that fee appraisers have selecting comparables. It will eventually be tough on the economy when it is harder to determine outliers for models (unusually high or low sales with no appraisal for financing). Of course, the usual parties will get another bailout, and keep on making cash hand over fist in meantime until someone catches on. Only just now are we starting to see well written articles like this one. It is unbelievable, given the history.

 

[chad hampton]

I still laugh at the term data collectors. A completely made up job title used to skirt appraisal rules and regulations.

If you notice, this is how government operates. when they realize something isn’t working, instead of admitting their mistake, and correcting it, they do things like change the wording of something to make it sound more pleasant. George Carlin had a good bit about that years ago.

Waivers sounds like they’re doing something wrong, so some self proclaimed wizard in an office somewhere came up with the term value acceptance. Acceptance is such a nice word. I can only imagine the brainstorming and meetings and wasted man hours that occurred when they changed the term.

 

[djd09]

i just read recently, TAF whining about how CU should be open to all the avm's...but just not for appraisers...i will find the quote