Shane Lanham's court case re: a black couple suing him for bias, and him fighting back.

[Mike Ault]

Apparently, there is no shortage of Institute designated members willing to slander the entire profession for personal gain.

 

[George Hatch]

"race was a way that appraisers were taught in their texts to assign value, so bias is built into the appraisal process."

Even if the pre-Civil Rights Era texts did make such a reference, nobody in the business today was taught out of those old texts.

The certs for every 1004 (and every other GSE appraisal form) going back to before I started appraising have included the following or extremely similar in the certifications.

17. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or opinion of market value in this appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties
in the vicinity of the subject property or on any other basis prohibited by law.

This is a screengrab of the GSE certs from 1993.

Her implication that appraisers in 2024 are somehow unaware of the prohibitions against personal bias in their work is the biggest lie being told in this saga.

 

[shrubberyvaluation]

I wouldn't make the assumption that nobody at Fannie/Freddie looked. Not just at the two appraisals in question but probably every single appraisal that has ever been performed on that property and in that neighborhood. Possibly going back to the beginning of their database. If I were over there and studying the racist appraisers allegation that's what I would have done.

Per the testimony in that hearing a while back they've been analyzing the data on the national level in some detail for the racist appraiser allegation. It would be illogical to assume they never looked at any of the individual appraisals involved. They clearly want to know what the truth is even if only for their own internal usage.

Perhaps I missed it, but I don't recall them ever publicly commenting on any of the appraisals in any of these specific incidents. Let us not forget that the GSEs are not appraisal entities and advocating for appraisers isn't among their responsibilities. The people who work at these businesses are employees so they're probably not at liberty to disclose the particulars of their internal operations or issue public comments outside of those directed by the CEO types.

The Appraisal Institute and AEI and AARC and others are in the business of appraiser advocacy. They have the freedom to PR for the appraisers in a manner that HUD and the GSEs cannot. And evidently will not.

I imagine they looked at it, if they could spin something in favor of attacking the appraiser they would use it, and if not ignore it.

 

[George Hatch]

Management over there might have an interest in attempting to actively avoid get dragged into a class action lawsuit over an appraiser-related issue. I don't see BofA or Wells volunteering to act as a character witness for appraisers, either.

 

[RCA]

Ladies and gents, another news story about our industry. And I learned something, per an appraiser interviewed "race was a way that appraisers were taught in their texts to assign value, so bias is built into the appraisal process." Never mind she has something to sell (the report plugs her business), the big problem is she's getting the call and air time, not the Dr. Chance's of the world. Anyway, Shane is fighting the false narrative being pushed by those with something to sell:

1. Of course, just because she paid $373K for the house does not mean that was the Market Value at the time of purchase or more recently on refinance. The appraiser is estimating Market Value - the probable price for which the property can sell for. And MV can change with time. The price could have gone down, even if $373K were the correct Market Value at the time of the appraisal. She doesn't say it appraised at $373K when she bought the home, only that is what she paid for it. It could have appraised for less if here there were concessions.

2. She could have paid more than what the house was worth when she bought it - that happens because appraisers are known to appraise to contract price. You know that, I know that. But I bump into old sales transactions that sold for more and less than the likely market value at the time of sale. All the time.

So, what is going on? How come appraiser's aren't smart enough to defend themselves? Why aren't the State Appraiser Boards investigating the cases?

Appriasal organizations aren't doing a good job of teaching appraisers what they need to know to survive in their profession.

 

[J Grant]

I wouldn't make the assumption that nobody at Fannie/Freddie looked. Not just at the two appraisals in question but probably every single appraisal that has ever been performed on that property and in that neighborhood. Possibly going back to the beginning of their database. If I were over there and studying the racist appraisers allegation that's what I would have done.

Per the testimony in that hearing a while back they've been analyzing the data on the national level in some detail for the racist appraiser allegation. It would be illogical to assume they never looked at any of the individual appraisals involved. They clearly want to know what the truth is even if only for their own internal usage.

Perhaps I missed it, but I don't recall them ever publicly commenting on any of the appraisals in any of these specific incidents. Let us not forget that the GSEs are not appraisal entities and advocating for appraisers isn't among their responsibilities. The people who work at these businesses are employees so they're probably not at liberty to disclose the particulars of their internal operations or issue public comments outside of those directed by the CEO types.

The Appraisal Institute and AEI and AARC and others are in the business of appraiser advocacy. They have the freedom to PR for the appraisers in a manner that HUD and the GSEs cannot. And evidently will not.

That is the problem - they did not publicly comment on any of the appraisals in these specific incidents, which left the default idea that the outcome was a low-biased appraisal and a high-correct appraisal. I recall you yourself looked over teh sales in the second appraisal in Cali and concluded the high value was not supported


It is not about appraiser advocacy - it is about stating what is correct and what is not, so that the public, and the PAVE commitee are not misled about a low and high appraisal and which was more credible and why. Even if they did not want to get involved in speaking out agobut thiese cases they could have spoken out about market value which uses the sales comparison wether in an appraisal or an AVM - and the method of sales comparoin will sometimes see homes in one subdivion sell for more than another subdiviosn regardless of race or ethni makeup

AI and the rest are niche organaionts that have little power or clout, and their speaking up or PR has little influence -Fannie and Freddie went with the assumption that bias is an problem based on a study they ran showing a small percent of appraisals had a "gap" between purchase price and value opoin in certain zip codes - which is an vlawed extrapolaiton to that means there is an actual wides spread problem on any scale =

 

[J Grant]

Management over there might have an interest in attempting to actively avoid get dragged into a class action lawsuit over an appraiser-related issue. I don't see BofA or Wells volunteering to act as a character witness for appraisers, either.

They are for private lenders/banks, and Fannie and Freddie are government-backed entities. I doubt they would be dragged into a class action lawsuit for speaking out about what market value is and how it is the benchmark for appraisals and other valuations, and it would have helped public perception as well as educate the PAVE committee about which appraisal was more credible and why in the court cases.

It wasn't about a character witness, it was about allowing a misleading and false idea to take root in the minds of the public, and for the PAVE committee to rely on.-

 

[shrubberyvaluation]

1. Of course, just because she paid $373K for the house does not mean that was the Market Value at the time of purchase or more recently on refinance. The appraiser is estimating Market Value - the probable price for which the property can sell for. And MV can change with time. The price could have gone down, even if $373K were the correct Market Value at the time of the appraisal. She doesn't say it appraised at $373K when she bought the home, only that is what she paid for it. It could have appraised for less if here there were concessions.

2. She could have paid more than what the house was worth when she bought it - that happens because appraisers are known to appraise to contract price. You know that, I know that. But I bump into old sales transactions that sold for more and less than the likely market value at the time of sale. All the time.

So, what is going on? How come appraiser's aren't smart enough to defend themselves? Why aren't the State Appraiser Boards investigating the cases?

Appriasal organizations aren't doing a good job of teaching appraisers what they need to know to survive in their profession.

Appraisers are not lawyers and its framed in a way to pretend its not about value, but rather that they can read the mind of the appraiser that they are racist, and for some reason the onus is on the defense.

 

[RCA]

Appraisers are not lawyers and its framed in a way to pretend its not about value, but rather that they can read the mind of the appraiser that they are racist, and for some reason the onus is on the defense.

This isn’t saying much at all. Of course juries themselves can be so biased, that it is essentially impossible to get a fair trial. The judge, jury, attorneys and their supporting infrastructures can all be heavily biased and lack intelligence and competence. In fact one could also maintain that there is a general lack of confidence in appraisers by all - even the appraisers themselves.

So the so-called onus is on superficial evidence and name calling - because the best evidence appraisers can come up with may not be understandable by the jury or any one else.

The “onus” is on this so-called “appraisal system” we have to work with - that is an extremely shoddy product: USAP, GSE Regs, other Fed and State laws, and above all the shoddy methods taught by appraisal institutions - their so-called peer based protocols, such as the SCA.

It’s a logjam - such a gigantic mess - you don’t know where to start to fix it - and you are immediately put into such a state of disillusion you want to give up before you start.

 

[George Hatch]

That is the problem - they did not publicly comment on any of the appraisals in these specific incidents, which left the default idea that the outcome was a low-biased appraisal and a high-correct appraisal. I recall you yourself looked over teh sales in the second appraisal in Cali and concluded the high value was not supported

A little late in response, but I overlooked the point being made at the time. Yes, I have looked at all of these examples from the outside/distant perspective and have run my mouth quite liberally about my opinions on them. But the reason I can do that and TAF can't is because their role is limited to standards and qualifications. Not endorsement for the conduct of any individual or any group of appraisers - THAT individual advocacy is arguably the role of professional orgs.