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using race to define a neighborhood

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LACKLAND27

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New York
I am doing some reviews on 3 commercial summary reports. The appraiser decribes the area as have a poplulation of 100,000+ residents of Korean and Chinese descent. The appraiser is cert gen and the supervisor is an MAI. I can't find the comments in USPAP regarding not using race, creed etc to describe a neighborhood. Any one know what the reg # is? I want to attach it to my comments for corrections.
 

AnonApprsr

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Massachusetts
Well it says it right on the 1004 form, but of course that doesn't help. It says "not appraisal factors." Where in USPAP would it deal with race? Sigh, i'll check right now....

Maybe Advisory Opinion 16. Check it out.

A quick thought: USPAP tells us to abide by laws, and there are laws against race discrimination. Meh, good luck.
 
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Kevin Mc

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Certified Residential Appraiser
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New York
Who is the intended user of the reports? Are the reports for GSEs? If the reports are not for GSE transactions the appraiser can put area demographics in the report if the end user has no problem with it.
 

Calvin the Airedale

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Ohio
I am doing some reviews on 3 commercial summary reports. The appraiser decribes the area as have a poplulation of 100,000+ residents of Korean and Chinese descent. The appraiser is cert gen and the supervisor is an MAI. I can't find the comments in USPAP regarding not using race, creed etc to describe a neighborhood. Any one know what the reg # is? I want to attach it to my comments for corrections.

Dear Lackland,

As far as I know, there are no specific regulations (CFR lending) which preclude an appraiser from accurately reporting and considering any factual and pertinent neighborhood demographics in the context of a commercial appraisal. Such comments may or may not have application to the analysis. It depends on the point that the appraiser is trying to make by the presention of such facts. Per your post, not enough is known to make that determination.

Fair housing law may preclude racial considerations in the formulation of the value opinions, but I assume these are not "housing" appraisals. Census and city web sites collect and report such social and demographic data. Governments rely on such data in the formulation of their service plans. Depending on the property, such data may in fact be pertinent. Obviously, you believe otherwise.

Why are you doing the review? Are you reviewing the report for USPAP compliance? The appropriateness of the value conclusion? or for its compliance with your standards of political correctness?
 
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Mountain Man

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Certified General Appraiser
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Georgia
I don't see a problem with it. A lot of our reports have factual demographic info, and Fair Housing has nothing to do with commerical appraisals.
 

LACKLAND27

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Mar 6, 2008
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Certified Residential Appraiser
State
New York
More info to original post

The review is for USPAP compliance, for a federally reglated bank which I just started to work for. The info was in the demographic data of the appraisals, which are of 2 banks and a 3 unit storefront.

I was shocked to discover they had credit analsyst doing reviews of multi million dollar appraisals with no access to check any data in the appraisals and a few days training on USPAP.
 

Kevin Mc

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Jun 7, 2004
Professional Status
Certified Residential Appraiser
State
New York
The review is for USPAP compliance, for a federally reglated bank which I just started to work for. The info was in the demographic data of the appraisals, which are of 2 banks and a 3 unit storefront.

I was shocked to discover they had credit analsyst doing reviews of multi million dollar appraisals with no access to check any data in the appraisals and a few days training on USPAP.

Do you work for the bank? I ask because I'm wondering if the reviews are for internal purposes. I would call someone like Dominic Pompeo (Diverisfied Group) or Dominic Neglia to get a definitive answer. You are thinking like a residential appraiser, commercial appraisals often include area demographics.
 

AnonApprsr

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Jan 21, 2008
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Massachusetts
That sounds interesting. Are you reviewing a lot of appraisals for USPAP compliance at the bank?
 

DWiley

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Apr 4, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
I can't find the comments in USPAP regarding not using race, creed etc to describe a neighborhood. Any one know what the reg # is? I want to attach it to my comments for corrections.

You cannot find them because there are no such comments in USPAP.

The ETHICS RULE does state that an appraiser must not make unsupported conclusions based on race (line 227), but your post seems to indicate only that data was reported.
 

Michigan CG

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Nov 1, 2006
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Certified General Appraiser
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Michigan
Some appraisers include U.S. Census charts and data in reports....which contains race and age stats.

If you are going to review commercial property you need to take the residential hat off and think like a commercial appraiser.

If the appraiser is a CG he doesn't need a supervisor...the MAI would be a cosigner of the report....you know...providing significant assistance.

Once on a complex residential my MAI mentor signed on the right side next to me on the URAR because the client wanted him to, I had a CG license.
 
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