Maryland Commission versus Appraiser Bias

[Joe Flacco]

Why do you seem to be automatically concluding that it IS bias? If we ever see proof from independent investigators that an appraiser is being biased, there are ways of dealing with that person short of flushing the entire industry down the drain.

I think that with two appraisals being very far apart, it would be pretty easy to come up with some conclusions if both reports were in front of any panel that INCLUDED actual local appraisers. I have looked at a couple of these reports where bias is alleged, and the subsequent reports that 'fixed' it. Comps on the 'fixed' report are invariably further away. If I were a betting man, I would put my $ on the homeowners/subsequent appraiser being closer to wrong-doing than the original appraiser in MANY, if not most, of these instances.

But that's not the real issue. The real issue is the automatic presumption of guilt pronounced by media outlets, who are salivating at any possible left-leaning story. They have become ambulance chasers, and even worse, are causing some of the accidents needing the ambulance to begin with.

I said many times right in this thread that I don't think the issue racial bias.

I think a lot of you guys way too emotional about this issue.

 

[Terrel L. Shields]

I think a lot of you guys way too emotional about this issue.

I think that is the result of the accumulation of 30 years of regulation where, from day one, appraisers have been accused of biases, from being set in our ways, using "the book", discriminating against some minority, "not understanding value", and having a number of lies told about us. We get a little defensive. If this racial bias thing is real, then why for most of those 30 years, we heard nary a peep about it except to be counseled time and again in CE, meetings, etc. to NOT descriminate on the basis of race, creed, color, or religion. We rub out religious plaques on walls, people's picture and woe to you if you get the family dog or cat in the picture...my lord! It's a Siamese! Suddenly after 30 years, we are the new KKK of Real Estate...nonsense.

 

[shrubberyvaluation]

Pounding the table that appraisers are not racist isn't going to work.

There are a lot of people that are not happy with appraisers and appraisals. We have to hear them out and come up with some answers.

People are not happy when their loans don't go through. I imagine it has always been this way.

 

[djd09]

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see, there is a simple solution for the independent appraiser. call Al.

 

[Joe Flacco]

I think that is the result of the accumulation of 30 years of regulation where, from day one, appraisers have been accused of biases, from being set in our ways, using "the book", discriminating against some minority, "not understanding value", and having a number of lies told about us. We get a little defensive. If this racial bias thing is real, then why for most of those 30 years, we heard nary a peep about it except to be counseled time and again in CE, meetings, etc. to NOT descriminate on the basis of race, creed, color, or religion. We rub out religious plaques on walls, people's picture and woe to you if you get the family dog or cat in the picture...my lord! It's a Siamese! Suddenly after 30 years, we are the new KKK of Real Estate...nonsense.

See. I do not care about the 30 year behind you. I care about the 30 years in front of me and others around my age.

With all due respect, I think the best thing you guys can do is sit down and shut the **** up. You guys have no answers to the questions being asked of the profession and all you guys are doing is crying that you are not racist.

That is not an acceptable response.

 

[TerryRohrer]

the 30 years in front of me and others around my age.

Careful what you wish for. There are a lot of young, stupid people in this country asking for a lot for nothing. Odds seem in their favor for getting it. What those folks don't understand is that much of the wealth and knowledge and experience in this country is controlled by those stupid old bastards they wish would sit down and shut up. Take those assets off the table and see what you have. Nor do those smart, young knowitallswithoutaclue understand that those stupid old bastards they whish would sit down and shut up will get what is left in the public healthcare and social security and other "safety net" programs, leaving nothing in their wake, as it will not be politically expedient to cut them off and let them die in the streets (though I expect your ilk will certainly argue that avenue!).

 

[Elliott]

AK,
So with all due respect, what is your solution? So you get an order to do an appraisal in a neighborhood, do you find comparables in that neighborhood that are similar or do you use comparables in the better neighborhoods near by?

 

[George Hatch]

The lawsuit story has made CBS. It's basically gone viral in terms of mainstream media exposure. This story and the questions and reactions it is eliciting from people is not going away. This will be a hotbutton social issue for the next several years at the very least. AK is right, "just say no" isn't going to work. Nor SHOULD it work. Whatever our problems are IRL it is in our own best interest to defend ourselves as best we can, starting with bomb-hardening our own workproduct.
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IMO just going into more detail about the neighborhood composition and analyzing the sales history going back a few years (at least 3) and commenting on the trends the sales are demonstrating would make it a lot harder for a critic to criticize the use of properties located within the neighborhood.

Just as one example, if the median size of detached homes in one neighborhood is 1100sf and the median size in another adjacent neighborhood is 1700sf then a 1500sf home in the one *could* have a different value than a 1500sf home in the other. Even if everything else about the two properties besides the location - including the racial demographics - is similar. Appraisers understand the principle in action here, whereas laypersons will not.

If we don't specifically analyze the neighborhood for its trends that leaves the door open for critics to cite regional or city-wide trends which may not mesh with what any specific neighborhood is doing. And the edge on that blade cuts both ways because the idea that the same trend applies equally during this time frame to every neighborhood also gets applied to other neighborhoods which, individually, may be outpacing the average. And then we get to the perceived difference in appraiser performance in appraisals from these different neighborhoods.

That means we need to do this with all our work, not just on the assignments we think might involve more risk. Remember, a really cynical critic could argue that the higher outcome in the 2nd appraisal is attributable to that appraiser having a personal pro-white bias. After all, the allegation is that appraisers are treating these borrowers differently by race. So hypothetically speaking, even if an appraiser is a flaming racist IRL then just walking into a house that they might believe looks white wouldn't actually be a low risk assignment for them.

 

[George Hatch]

Lets go back to the neighborhood that is the subject of this complaint. If an appraiser cited the sales history of the neighborhood going back 5 years and did the same for the Sausalito neighborhood to the s/e and the unincorporated area south of the city of Mill-Valley to the n/w it would have illustrated that significant location adjustments were necessary when using these outside sales, and that the rate of adjustment for the unincorporated Mill Valley properties would be a fair bit lower than for the Sausalito properties.

If that was in a report it would make it hard for a critic to say that the the appraiser should not have made location adjustments to the sale prices of these outside properties, which as I read it, is one of the themes of the lawsuit. Now it may be that the original appraiser did perform that analysis and did have a good idea of what a reasonable adjustment factor is, but without taking the extra step of illustrating those differences in their report it isn't obvious to a reader that they did perform that analysis. A reader can only "see" what the report contains, not what the appraiser actually did/didn't do.

 

[Carnivore]

Strangely, I am getting a lot of Request in areas that are predominately Minorities. Based on my annual Volume which is so low many appraiser do this amount in a month. This troubles me, because it smacks of denial of service or just simply avoidance. None the less I am completing them.

It is taking me longer than usual because I am being very careful and going to extraordinary efforts to include as much of the analysis in the reports that normally one would have it only in their work file. I am even including a few Interior Pix of each comparable within the report.

I can't say anymore because we are a public form. This owner works in a governmental organization that helps minorities gain access to Governmental Services.