The New USPAP: MARS Required

[Dublin ohio]

No person is allowed to influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or any other manner, including, but not limited to:

here is a quasi law...but it doesn't support your delusions

How is wanting appraisers to be more intelligent in their use of words fit in to any of the above.

 

[djd09]

its the law...

 

[RCA]

So typical for this profession. It’s our job to give them an accurate picture without using words and terms that would give them an accurate picture.

Some might say that’s misleading

Sometimes, the underwriter just wants a list that shows where the adjustments came from. As in my case, I often have multiple feature adjustments that I aggregate under a group heading. So, for example GLA or Building Area adjustments. There are some areas, such as the Fairmont area in Pacific, that have several different kinds of areas, and they all have different price models, e.g.

1. Approved above grade living area.
2. Approved below-grade living area.
3. Unapproved above grade living area.
4. Unapproved below-grade living area.
5. Storage area convertible to living area.
6. Storage area.
7. ...

These were subdivisions built mostly in the 1950s and 1960s, rectangular 2-story houses, where originally the living area was on the second floor and the first floor was a two-door garage with varying sizes of storage area, which some owners over the years converted into a living area with and without permits. And, there were times, e.g., in the 1980's where the unpermitted living areas were grandfathered in as permitted. And some homes have room for further exterior expansion due to the surrounding flat landscape. Some are backed up against some landslide area, with a first floor only large enough to allow for the mandatory two-car garage.

Anyway, there is no room for detailed adjustments provided by MARS on the Fannie Mae form, so I aggregate the adjustments and put the details in the Addenda. If I don't do that, I get a call. Not that the underwriter really understands MARS. - If so, apparently that doesn't bother them. They just want a statement to explain that the numbers weren't pulled out of thin air.

So, with some of these Fairmont homes, you can effectively have a pretty large home with additions. With others, there is absolutely no expansion possible. And if you can get all the data for Fairmont and do MARS regression on it, you will discover the price differences. Many owners have purchased homes thinking they could "of course" expand, only to find out years later, when the time came to expand, there was nothing they could do. Some people can look at a house and see that it can't be expanded, and that it is a problem. Others are not that smart.

 

[djd09]

AI Overview



Apps that address word bias in appraisals typically scan reports for subjective or prohibited terminology and can flag potential issues for lenders, appraisers, and homeowners
. Examples include Valligent's BiasCHECK, which uses a Bias Word Scan, and Freddie Mac's Loan Collateral Advisor, which will alert users to potentially biased words. Other tools, like C3 AI Property Appraisal and Black Knight's CA Risk Profiler Plus, use AI to identify potential bias in the appraisal process beyond just word choice.

now it makes sense...his boy dwfreddie is part of the word police

 

[RCA]

ChatGPT just created for me a 20-module, interactive training program starting with linear regression, purposely without any reference to the appraisal process, until I have a working knowledge of regression, then multivariate, then . . . I probably will explode, or implode! {Although I promise myself repeatedly to STFU, it's impossible to do so. Consequently, I also remember an Accounting Course at UCRiverside a long long time ago. Having just finished the course, the prof called me into his office to tell me that he was aware that the course wasn't impt to me--not knowing that I had busted my axx for two months but just didn't get the 2 column concept that couldn't be easier to understand. Nevertheless, he advised me that he would give me a passing grade in the course....only if I promised never to enroll in another Accounting course in the UC system!!!!! Best offer anybody ever made me. Hell yea I accepted!!!!

Yes, you can learn a lot about virtually anything using Grok, Claude or ChatGPT. E.g., ask it what Dark Matter is. Then ask it about the expansion of the universe. Suggest that there could be external universes pulling on our universe to create the expansion. It will disagree. And soon, you will be in a cosmological discussion. See how long you can keep it going by asking questions. Interesting stuff.

 

[djd09]

AI is so good...that it took them 8 years to come out with uad 3.6

 

[djd09]

Tobias Peter

Why Home-Appraiser Bias Claims Are Falling Apart​

Courts are now rightly demanding proof of intent.

In 2022, numerous mainstream media outlets seized on the experience of married Johns Hopkins professors Nathan Connolly and Shani Mott as clear evidence of systemic racism in the home-appraisal industry. The episode gained national traction after the New York Times published a story in August headlined: “Home Appraised With a Black Owner: $472,000. With a White Owner: $750,000.” ABC and NPR soon amplified the narrative that racial bias in appraisals is real and widespread, locking black Americans out of building home equity and long-term wealth.

What began with great media fanfare, however, ended in silence. When a lawsuit—for which I served as an expert witness for the defense—finally reached judgment last month, a federal court dismissed the discrimination claims. The same outlets that had trumpeted the allegations early on or framed the plaintiffs’ 2024 settlement with the lender as implicit validation of their claims, never returned to cover the case’s conclusion. Their silence leaves the public with a distorted impression of widespread appraiser bias.

The Connolly–Mott case was presented as proof of systemic racism. Yet to date, no appraiser has been convicted of racial bias. While some cases have been settled under reputational pressure for lenders, others have ended with appraisers clearing their names. Inaccurate appraisals occur, as in any profession, but courts are now rightly demanding proof of intent—not statistical shortcuts or headline-grabbing anecdotes.

Why Home-Appraiser Bias Claims Are Falling Apart

Courts are now rightly demanding proof of intent.

www.city-journal.org

hey dublin...not one appraiser has been convicted

 

[RCA]

That's nonsense. I use MLS IDs for most counties, if I can get them (since some counties don't have them, though other options exist). There are in fact, usually adjustments for these different areas. But, of course, your comps should preferably come from the same MLS area, in which case there wouldn't be an adjustment. But it often happens that you have to extend your comparable area further out to get a decent set of comps. In my hometown of Pacifica, you have distinctly different areas. South Pacifica is much sunnier and warmer than North Pacifica; you have inland areas without an ocean view, and the more coastal areas with magnificent views. North Pacifica is a quicker commute to work, and so on.

If you don't use MARS, if you have NEVER used MARS, then you don't know the difference. You live at a certain level of ignorance. I have seen the appraisals of so-called Expert Witnesses. Flying by the seat of their pants. I have worked in some respected offices and seen many other reports. Don't you think I know? I do, exactemant.

As to your statement "locational factors relating to social factors," here's the problem: there is almost ALWAYS some correlation between location and racial characteristics. And the law and regulations say absolutely NOTHING about correlation levels. So, when you say "relating," we can take that to mean there are no adjustments to be made among locational factors. That is nonsense. 12% of blacks live in district A, and 14% of blacks live in district B, so B has more blacks than A. This kind of relationship exists everywhere. So, that first statement above is nonsense. Even if you succeed in stating more precisely what you really mean (I would assert you perhaps don't really know what you are talking about), - you will run into other problems.

So, in conclusion, there is almost always a relationship between locational and social factors. Per USPAP, such relationships, based on social factors involving protected characteristics, are to be avoided in appraisals. And yet, appraisals must be adjusted to market conditions. And, in practice, "market characteristic" should avoid protected characteristics, per anti-discriminations laws (FHAct, ECOA, Civil Rights Act, 1866, etc.)

The primary factor that trips up appraisers is the additional avoidance of "proxies" as replacements for protected characteristics. A somewhat grey area that can lead to contradictory requirements for the appraiser, which must be resolved through case law and other jurisdictional proceedings.

I see this was written too late at night - or too fast. My explanation was not sufficiently clear. My point of view is that most appraisers lack the toolset (MARS) to accurately capture locational differences. They would observe what they considered distinct differences between neighborhoods and take liberties in describing their rationale for adjustments, which, unfortunately, in the minds of attorneys, judges, and juries, could amplify bias on the part of lenders and others. That is to say, since they had nothing else in their tool set, they often resorted to "social factors" to explain their adjustments. ----> So, a number of lawsuits ensued, alleging discrimination, resulting in large compensatory awards that cost lenders and appraisers time and money. The only thing that could really be done to improve the situation, given that appraisers are such poor appraisers, in general, was to focus on ethics. Nonetheless, USPAP requires adjustments for location, if indeed appraisers are required to account for market conditions. One could argue that, in most cases, at this point and after a period of thorough brainwashing, "social factors" are no longer adjusted for by most appraisers.

BUT definitely, location is adjusted for, especially if you are using MARS, which may very well dictate significant adjustments in a totally objective way for differences in location.

 

[Tom D]

AI is so good...that it took them 8 years to come out with uad 3.6

Yea. Why didn't AI with it's quantum computers develop a new uad in 1 hour. Instead, we got non appraiser idiot savants wizards of oz to do it more better. Hahahaha. F u appraisers seems to be the current lending theme.

 

[ZZGAMAZZ]

Possibly the wrong thread, but one thing I know for sure: After working with ACI technical support and the Development team, for more than one month, I turned to ChatGPT that patiently walkled me through a 72-hour Windows 11 Repair Install....that seems to have resolved the ACI "file location/file management/etc" problems !!!!! There's no way for me to express my appreciation, especially because I literally had no friggin idea what I was doing, but the ChatGPT even "talked me down" when it sensed that I was ready to implode because of frustration. I'm a faithful follower...but now I am learning about Nano Banana, or LDD Learning, etc., etc. WTF.....

I'm wondering whether the AI concept is perceived as a universal game-changer????? All new to me....