'Just because you're paranoid doesn't mean they aren't after you' Joseph Heller Catch-22.

[Elliott]

Jeremy Bagott's warning (11/8/24):

"MIRED IN FEDERAL PROBE, APPRAISER GLUM OVER ELECTION RESET

VENTURA, Calif. (Nov. 8, 2024) – Ken Mullinix could be lifted from the pages of a Kafka novel. He has been investigated by the U.S. Department of Housing and Urban Development for more than two years. He’s collateral damage in a campaign by a ponderous federal bureaucracy that pits the might of nearly 10,000 federal employees with $214 billion in budgetary resources against a handful of state-licensed appraisers.

The cause? The appraisers rendered unpopular opinions of real estate value and drew bogus discrimination complaints and investigations that HUD has stretched out for years. The harassment by HUD is meant to send a signal to all appraisers – If they wish to avoid trouble, they should go along with the contract price in a sale or the price required to make a refinance pencil.

But surprisingly, he is not all that upbeat about the recent election reset and the promise of a new head of Housing and Urban Development.

“Even if the frivolous investigations against appraisers stop,” said Mullinix, “too much grant money has already been funneled to crony nonprofits and politically aligned law firms, allowing them to continue to harass appraisers through specious lawsuits for years to come.”

Mullinix believes money from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act has gone directly and indirectly to making these grants.

He believes these investigations are simply designed to intimidate independent state-licensed appraisers, who, he contends, are caught in a supercharged political atmosphere and being blamed for simply doing their jobs, which occasionally involves delivering an opinion of value that costs a broker a commission or upsets a borrower. He believes delegitimizing and marginalizing appraisers is the point."

 

[Elliott]

And,

“For now, the investigation itself is the punishment,” he said. “The goal is to make a relatively small number of appraisers into full-time, professional defendants. They hope the word will spread among all appraisers and intimidate them into rubber-stamping reports. HUD is letting the appraisal industry know what’s in store for honest appraisers. It’s a scorched-earth campaign.”

In the yearslong process, Mullinix, who has been a real property appraiser in Southern California for 35 years, has learned that the agency is violating its own policies in the way it is carrying out its investigation of him. He believes about 300 appraisers, but as many as 1,000, may be ensnared in similar HUD probes based on frivolous complaints by questionable complainants using nonprofits as surrogates and contract investigators not subject to Title 5 conflict-of-interest constraints. These constraints otherwise apply to all federal employees.

The contractors have HUD email addresses and are indistinguishable from federal employees, said Mullinix.

Many of the complaints against appraisers, he said, seem to come in cases where value opinions don’t rise to levels that make transactions work. There are also complaints, like the one against him, that appear to be stage-managed by outside actors.

Mullinix has become a student of the “Title VIII Complaint Intake, Investigation, and Conciliation Handbook (8024.1).” The handbook is designed to protect citizens from overzealous federal workers. He found section after section had been violated in his own investigation by the HUD contractor.

“For example, the handbook requires the HUD investigator to explain the entire procedure to the respondent at the outset of any investigation,” he said. “This never occurred in my case.”

His advice to appraisers: If anything is out of the ordinary when you inspect a property, don’t file an appraisal report. Keep the possibility of a set-up always in the back of your mind.

“I should never have given [HUD] any information,” he laments. “I should have made them subpoena me. I should never have cooperated with the investigator. It prolonged the harassment. The investigator seemed to know very little about real estate valuation.”

He believes the investigator was operating out of spite and treating the investigation, and likely others, as a make-work program.

He takes inspiration from Shane Lanham, the Maryland appraiser who is taking the fight to a pair of professors at Johns Hopkins University who, along with their lawyer, have caused his name to be tarnished on a national scale for alleged discrimination – only because his opinion of value did not rise to the professors’ expectation of what their home was worth. Lanham is both defending himself from these baseless allegations and prosecuting a defamation case against the professors, one of whom has passed away since filing the complaint. You can contribute to his GoFundMe page here.

“I take great pride in my work and adhere strictly to the highest standards of professionalism and ethics,” said Mullinix.

Last year, HUD posted notice in the Federal Register that it wished to allow convicted felons – white-collar criminals, perjurers and others – to become “discrimination testers.” You can read the rulemaking here. Even the novelist Franz Kafka could not have made this up."

# # #

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.

 

[Terrel L. Shields]

I'm copying that

 

[J Grant]

There are times when somebody's bad acts deserve to be investigated - impossible to know, of course, with his individual case - I have a friend in Cali who has been an appraiser for 25 years and recently retired and has never been investigated. Same here - and most of us have never been investigated - it is quite rare in appraisal -(not talking about a board complaint but a two year investigation)

 

[sputnam]

There are times when somebody's bad acts deserve to be investigated - impossible to know, of course, with his individual case - I have a friend in Cali who has been an appraiser for 25 years and recently retired and has never been investigated. Same here - and most of us have never been investigated - it is quite rare in appraisal -(not talking about a board complaint but a two year investigation)

Right. But, only the bad guys make the news.

 

[Tom D]

I always told my friends, you never want to be investigated, or reviewed, about anything. They don't have to prove that you are guilty. They just bankrupt you with what it cost to defend yourself.
Race baiting is a good paying career.