Update from Shane Lanham

[Elliott]

From Jeremy Bagott's newsletter 9/19/25:

"Lanham, a state-licensed real property appraiser based in Parkville, Maryland, had the misfortune of being assigned to appraise the Hopkins professors’ home on behalf of nonbank lender LoanDepot. The lender was also named as a defendant in the professors’ lawsuit, but LoanDepot quietly extricated itself from the lawsuit by paying off the plaintiff what one attorney familiar with the case believes was approximately $400,000. Lanham’s success in getting the case dismissed in summary judgment casts a spotlight on the cowardice of LoanDepot’s settlement with the plaintiff. It left Lanham to defend himself alone.

Mullinix believes about 300 appraisers have been 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.

In the yearslong process, Mullinix, who has been a real property appraiser for 35 years, learned that the agency had been violating its own policies in the way it was carrying out its investigation of him.

He believes these investigations are simply designed to intimidate independent state-licensed appraisers, who, he contends, have been caught in a supercharged political atmosphere and are being blamed for simply doing their jobs, which occasionally involves delivering an opinion of value that costs a broker his commission or upsets a borrower. He believes delegitimizing and marginalizing appraisers has been HUD’s aim all along.

Last year, HUD posted notice in the Federal Register it wished to allow convicted felons – white-collar criminals and perjurers – to become “discrimination testers.” You can read the rulemaking here.

Many of the complaints against appraisers, Mullinix 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."

 

[Fernando]

From Jeremy Bagott's newsletter 9/19/25:

"Lanham, a state-licensed real property appraiser based in Parkville, Maryland, had the misfortune of being assigned to appraise the Hopkins professors’ home on behalf of nonbank lender LoanDepot. The lender was also named as a defendant in the professors’ lawsuit, but LoanDepot quietly extricated itself from the lawsuit by paying off the plaintiff what one attorney familiar with the case believes was approximately $400,000. Lanham’s success in getting the case dismissed in summary judgment casts a spotlight on the cowardice of LoanDepot’s settlement with the plaintiff. It left Lanham to defend himself alone.

It could be a business decision for LoanDepot. If their insurance willing to pay $400,000 then it makes sense for them to settle and avoid additional cost and continual bad publicity.

Mullinix believes about 300 appraisers have been 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.

In the yearslong process, Mullinix, who has been a real property appraiser for 35 years, learned that the agency had been violating its own policies in the way it was carrying out its investigation of him.

He believes these investigations are simply designed to intimidate independent state-licensed appraisers, who, he contends, have been caught in a supercharged political atmosphere and are being blamed for simply doing their jobs, which occasionally involves delivering an opinion of value that costs a broker his commission or upsets a borrower. He believes delegitimizing and marginalizing appraisers has been HUD’s aim all along.

Last year, HUD posted notice in the Federal Register it wished to allow convicted felons – white-collar criminals and perjurers – to become “discrimination testers.” You can read the rulemaking here.

Many of the complaints against appraisers, Mullinix 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."

It's a fault of our legal system. Our society is very litigious. See how Trump files frivolous lawsuits and CA would countersue (over 100 lawsuits). Waste tax payers money and stress the legal system.
If the losing party pays for the winning party attorney fees, maybe less lawsuits. Then again less settlements or settlements to split attorney fees.

 

[Elliott]

I thought I'd drop in the Appraisal Institute with AI. Not going well:

"The main factors contributing to the Appraisal Institute’s financial challenges over the past decade include declining membership and dues revenue, reduced demand for educational programs, rising operating expenses, governance turmoil, and decreased market relevance due to industry changes.
Membership Decline
• Membership numbers have steadily dropped as fewer appraisers enter or remain in the profession, leading directly to reduced dues revenue—historically AI’s primary source of operating funds.
Lower Education Revenue
• Fewer members and changing professional development needs have led to declining enrollments in Appraisal Institute education offerings, workshops, and seminars, causing a substantial drop in non-dues income.
Operating Cost Increases
• Fixed costs for staff, headquarters, governance operations, technology, and insurance have risen faster than revenue, contributing to persistent budget deficits.
Governance and Leadership Turmoil
• Internal conflict has resulted in frequent executive turnover (CEO, CFO, board changes), costly litigation, and distracted focus from core mission, raising administrative expenses and hindering reform efforts.
Industry Shifts and Market Pressure
• The broader real estate valuation industry faces technological disruption, fee pressure, and competition, eroding the perceived value of membership and leading to further attrition and shrinking influence.
In combination, these factors have strained finances and contributed to repeated multi-year operating deficits despite organizational cost controls and restructuring efforts."

 

[djd09]

Are there individual appraisers who are racially biased? Sure. Are there individual appraisers who allow their bias to influence their opinion of value? Probably. Is appraiser bias a systemic problem. Very unlikely.

what they call bias...i call whitewashing

 

[Non Sequitur]

I thought I'd drop in the Appraisal Institute with AI. Not going well:

"The main factors contributing to the Appraisal Institute’s financial challenges over the past decade include declining membership and dues revenue, reduced demand for educational programs, rising operating expenses, governance turmoil, and decreased market relevance due to industry changes.
Membership Decline
• Membership numbers have steadily dropped as fewer appraisers enter or remain in the profession, leading directly to reduced dues revenue—historically AI’s primary source of operating funds.
Lower Education Revenue
• Fewer members and changing professional development needs have led to declining enrollments in Appraisal Institute education offerings, workshops, and seminars, causing a substantial drop in non-dues income.
Operating Cost Increases
• Fixed costs for staff, headquarters, governance operations, technology, and insurance have risen faster than revenue, contributing to persistent budget deficits.
Governance and Leadership Turmoil
• Internal conflict has resulted in frequent executive turnover (CEO, CFO, board changes), costly litigation, and distracted focus from core mission, raising administrative expenses and hindering reform efforts.
Industry Shifts and Market Pressure
• The broader real estate valuation industry faces technological disruption, fee pressure, and competition, eroding the perceived value of membership and leading to further attrition and shrinking influence.
In combination, these factors have strained finances and contributed to repeated multi-year operating deficits despite organizational cost controls and restructuring efforts."

Per a few sources the insta-toot is running a seven-figure deficit this year. Which is crazy considering they saved $500k plus by not having a CEO.

 

[djd09]

Tobias Peter

Why Home-Appraiser Bias Claims Are Falling Apart​

Courts are now rightly demanding proof of intent.

The courts are also recognizing this reality. In the Connolly–Mott case, the plaintiffs relied heavily on an expert sociologist, Junia Howell. Like the Brookings study, Howell’s academic work sought to show discrimination but rested on flawed assumptions. The court excluded her from opining on appraisal methodology and ultimately found her analysis insufficient to prove discrimination.

A similar story played out in Carlos Turner et al. v. Henley Appraisals (2025), where plaintiffs relied on a “whitewashing” experiment, in which they removed family photos and cultural items and had a white friend pose as the homeowner during a second appraisal conducted a year later. The court noted that the later appraisal contained multiple admitted errors and that Henley’s valuation was well within the range of other contemporaneous appraisals. Disagreement among appraisers, in other words, does not equal discrimination.

These so-called “mystery shopper” experiments that generate headlines are deeply flawed. Take an Indianapolis case heavily covered by CNN: three appraisals of the same home came in at $125,000, $110,000, and $259,000. The media spotlighted only the highest figure, omitting the inconvenient context.

Such experiments are not randomized or controlled. The second appraiser may be influenced by owners or circumstances. Timing is often months apart, during which markets can shift dramatically. And the sample sizes are tiny, more anecdote than science.

Why Home-Appraiser Bias Claims Are Falling Apart

Courts are now rightly demanding proof of intent.

www.city-journal.org

 

[djd09]

The court noted that the later appraisal contained multiple admitted errors

TAF and the unethical stakeholders hung us out to dry based on flawed second appraisals...eh, george?

 

[sputnam]

A big part of the fail can be attributed to the fact that when closely examined, the logic the claims were based on fell apart. For example, you can't demonstrate that an appraiser allowed racial bias to influence the appraisal by "whitewashing" the property then having a different appraise appraiser the property 6 months later.

Every one of the studies that I've looked into that claimed to prove racial bias related to appraisals has used flawed methodology.

 

[TerryRohrer]

Why Home-Appraiser Bias Claims Are Falling Apart​

Critics have cited the Biden administration’s Property Appraisal and Valuation Equity (PAVE) task force and studies, including a Brookings Institution report, as evidence of systemic undervaluation of homes in black neighborhoods. But these analyses largely fail to control for such critical socioeconomic factors as income, education, marriage rates, credit scores, and wealth. When we at AEI accounted for such variables, the racial valuation gap nearly disappeared.

Even when limiting samples to majority-white neighborhoods, large valuation differences persisted when sorting by socioeconomic status. Location and socioeconomic factors explain far more than race. Fortunately, the Trump administration’s Department of Housing and Urban Development has recently reversed some PAVE-related policies—an acknowledgement that the framework was rushed and methodologically unsound.

The courts are also recognizing this reality. In the Connolly–Mott case, the plaintiffs relied heavily on an expert sociologist, Junia Howell. Like the Brookings study, Howell’s academic work sought to show discrimination but rested on flawed assumptions. The court excluded her from opining on appraisal methodology and ultimately found her analysis insufficient to prove discrimination.

A similar story played out in Carlos Turner et al. v. Henley Appraisals (2025), where plaintiffs relied on a “whitewashing” experiment, in which they removed family photos and cultural items and had a white friend pose as the homeowner during a second appraisal conducted a year later. The court noted that the later appraisal contained multiple admitted errors and that Henley’s valuation was well within the range of other contemporaneous appraisals. Disagreement among appraisers, in other words, does not equal discrimination.

These so-called “mystery shopper” experiments that generate headlines are deeply flawed. Take an Indianapolis case heavily covered by CNN: three appraisals of the same home came in at $125,000, $110,000, and $259,000. The media spotlighted only the highest figure, omitting the inconvenient context.

Such experiments are not randomized or controlled. The second appraiser may be influenced by owners or circumstances. Timing is often months apart, during which markets can shift dramatically. And the sample sizes are tiny, more anecdote than science.

If appraisers are to be evaluated, the benchmark should be clear: when possible, compare valuations against prior sale prices and reasonable home-price appreciation. In the Mott case, the family bought their home in 2017 for $450,000 (with concessions lowering the net price to $436,500). Federal data suggested a 12 percent to 14 percent appreciation by 2021 in the neighborhood, placing the appraised value of $472,000 well within range. In the Henley case, the so-called undervaluation was modest compared with other appraisals at the time, and far more defensible than a later, error-ridden, inflated appraisal.

Rather than chasing headlines, we should evaluate appraisers systematically. At AEI, we have shown that it is possible to screen appraisers for bias or inaccuracies based on their past work. The data already exist, and regulators could have begun this process years ago.

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.

http://disq.us/t/4vqjdyu

 

[Non Sequitur]

Yet to date, no appraiser has been convicted of racial bias.

Have any been criminally charged with racial bias?