MARCH 12, 2002 – Now, two studies of millions of appraisals by the American Enterprise Institute (AEI) and Fannie Mae have concluded that there is no racial bias in real estate appraisals.
For those involved in the industry, this comes as no surprise. It is essentially impossible for real estate appraisers to be biased. Probably 95% of the time the appraiser knows nothing about the physical characteristics of the borrower. Nearly 100% of the time the appraisal reviewers know nothing about the borrower. And ALL appraisals must be approved by a reviewer.
Also, the market sets prices and all appraisers do is analyze recent comparable sales and arrive at a value for the subject. Which, in purchase situations, is equal to or higher than the sales price 95%+ of the time.
Racist organizations like the Brookings Institution and others that are falsely complaining about appraisal bias need to ‘follow the science’ as they like to say. Scientific studies 100% conclusively say there is no appraisal bias.
Maxine Waters and President Biden owe the appraisal industry an apology. And so does the Appraisal Institute for not supporting its own members.
The real estate appraisal industry is the gold standard for an unbiased profession. We have been the independent referee for 80+ years.
Lastly, we all know about the Fair Housing Act, redlining, discrimination being illegal, et al. To say we need to be educated about such is ridiculous. If you have lived in America since the 1970’s, you know all about fair housing laws and what is and is not discrimination.
The true racists are those that accuse everyone else of being racist. These people need to be exposed and told where to stick their unfounded claims. They should be sued for slander and defamation, also.
Hey, Appraisal institute, get a backbone and stand up for your members! There is no legislation that can change 4,000+ years of economic theory. The appraisal industry does not need to make any changes. It is already fully diverse and inclusive of people of all socio-economic classes (I grew up in mobile homes and am Jewish….I have the low-priced housing and minority characteristics covered!). Remember, skin-color and the only two genders have nothing to do with diversity and inclusivity.
Shalom,
The Mann
Tag Archives: Appraisal Institute
GEORGIA CLARIFIES LAW ON EVALUATIONS
SEPTEMBER 26, 2020 – The following is from the Appraisal Institute’s Washington Report:
THE APPRAISAL OF REAL ESTATE – 15TH EDITION
SEPTEMBER 26, 2020 – The Appraisal Institute has published the latest edition of the industry’s bible. I will let them describe noteworthy items in the new edition. See below. You can purchase it at their website.
“The Appraisal of Real Estate,” 15th edition, is a book that fits current times. It reflects a renewed commitment to the essential principles of appraisal and the sound application of recognized valuation methodology. In addition to updated information on changes in real estate markets and valuation standards, longtime readers of “The Appraisal of Real Estate” will notice these significant changes in this edition:
- New chapters focused on applications of market analysis and highest and best use analysis;
- Additional emphasis on identifying the property rights to be appraised in an appraisal assignment; and
- Deeper discussion of accepted techniques for allocating value among real estate, personal property and non-realty items.
In this book, readers will notice the expanded discussion of market analysis and highest and best use, with new chapters clarifying these important concepts and demonstrating procedures for their application. Readers will also notice the relationship between market analysis and highest and best use is made explicit and described in a step-by-step analytic procedure. Lastly, the major development in this new edition is the emphasis on the necessity of definitively describing the property rights to be appraised in an appraisal assignment to ensure that all the necessary steps are taken to produce a credible value conclusion.
Order your copy today!
WELCOME SOUTH DAKOTA TO THE EVALUATION WORLD
JUNE 29, 2020 – South Dakota has become the 11th state to allow licensed/certified appraisers to perform non-USPAP Evaluations. We have 39 more to go:) When we get back to in-person classes, if you are in a state that allows non-USPAP Evaluations, I have a 7-hour seminar on Evaluations and Validations that I will gladly come and teach. I don’t teach over the web. I can only share my 28 years of experience with Evaluations in person. The Appraisal institute’s news item on this follows:
South Dakota Passes Legislation Allowing Appraisers to Perform Evaluations
APPRAISAL INSTITUTE WEBINAR SERIES I AM TEACHING IN APRIL/MAY
February 3, 2020 – Twice last year I taught this 4-part webinar series for the Appraisal Institute. The intended audience is for bank/credit union employees, although appraisers who run an AMC might also be interested.
Please go to this link for information on content and how to register.
Feel free to pass this along to anyone you think might benefit from this webinar series.
Thanks so much!
The Mann
2 MORE STATES JOIN THE NON-USPAP EVALUATION WORLD!!!
June 6, 2019 – Most importantly, my thanks to all past and present Veterans on this 75th Anniversary of D-Day. I visited Normandy and Omaha Beach last year. So serene. Humbling. One of my wife’s uncles was in the second wave that landed at Omaha Beach. He didn’t tell anyone that until a few months before he died in his 90’s. The Greatest Generation rarely talked about the War. But, they saved the World. Literally. We owe those young men everything. God Bless them all and our Country.
Per the Appraisal Institute’s Appraiser News Online, 2 more states will allow licensed/certified appraisers to perform non-USPAP Evaluations. As predicted, this is the year for this to finally take off across our country.
If you are an appraiser in adjacent states, you should start a campaign to get your state to pass a similar law. Else, you are missing out on a ton of business! I hope North and South Carolinas wake up and join the movement. Soon, the entire Southeastern USA will allow appraisers to perform non-USPAP Evaluations. Following is from the AI:
ALABAMA
OREGON – WELCOME TO THE NON-USPAP EVALUATION WORLD
May 23, 2019 – Licensed appraisers will finally be allowed to perform non-USPAP Evaluations for financial institutions. I like how the State makes it clear that Evaluations are not even real estate appraisal activity. Strong statement. Below is from the Appraisal Institute:
2019 – THE YEAR EVALUATIONS BREAK THROUGH
April 19, 2019 – It has been exactly 25 years that I have been campaigning for non-USPAP Evaluations to be performed by licensed/certified appraisers. Most of the time it has been a one-man campaign. Thankfully, times have changed and appraisers have come around to the need for Evaluations.
It looks like this year will see many States pass the requisite law to allow its most qualified valuers to finally perform non-USPAP Evaluations. If your State isn’t mentioned below, I encourage you to take action. For almost 30 years, non-appraisers have been doing all the Evaluation work in your State. With Evaluation volume about 4x-6x that of Appraisal volume think how much business you have missed out on:(
The following are from the Appraisal Institute:
RESIDENTIAL APPRAISAL THRESHOLD INCREASE – MUCH ADO ABOUT NOTHING
February 1, 2019 – The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency proposed raising the residential appraisal threshold from $250,000 to $400,000.
The Appraisal Institute and numerous other groups are opposing this increase. That is understandable. But, the hyperbole that these organizations and appraisers put out there is no different than the Fake News problem.
Based on my experience of over 25+ years in banking, I estimate that less than one-hundredth of 1% of residential appraisals will be affected. Probably less than that.
GSEs are responsible for 90%-95% of residential loans and, thus, residential appraisals. All such loans are exempt from FIRREA. So, the Federal Agencies can increase the residential threshold from $250,000 to $1 Trillion and it wouldn’t be noticed by 99%+ of residential appraisers! Also, it will have no effect on the national economy.
For the most part, the only residential properties that stay under FIRREA are second/vacation homes, model homes in subdivisions, and rental homes (e.g. an investor rents 20 houses around a city). Some ‘regular’ house loans remain under FIRREA – this is when the bank does not sell the loans to the secondary market. Banks typically don’t keep many of these loans on their books. But, yes, they do keep some.
Appraisers just need to keep an eye on the GSEs. They are the ones who make decisions that affect the entire residential appraisal industry in a significant way. Don’t worry about the FIRREA issue at hand. As they say, it is a nothing burger:)
The Mann
UP TO 6 STATES NOW, WELCOME TO THE CLUB FLORIDA
May 25, 2017 – Six states now permit licensed appraisers to perform non-USPAP Evaluations. In those six states, licensed appraisers are finally on a level playing field. 44 states to go. We might already have another state in the group, but some legal confirmation is needed. And Virginia is actually delayed a year as they need to change the definition of Evaluation. But, we are headed in the right direction. The following is from the Appraisal Institute (but, it omits Indiana which does have this law):
Florida Makes Significant Changes to Appraiser Licensing Law
Florida Gov. Rick Scott on May 23 signed HB 927, legislation that makes significant changes to the state’s appraiser licensing law and requires appraisal management companies to comply with federal minimum requirements for registration and oversight. The law takes effect Oct. 1.
The Appraisal Institute and the Region X Government Relations Committee advocated for two key improvements to the state’s appraiser licensing law, and those provisions were incorporated into the bill.
The first provision defines an “evaluation” as a “valuation permitted by any federal financial institutions regulatory agency for transactions that do not require an appraisal” and clarifies that a state-licensed appraiser may perform an evaluation. Currently, appraisers in Florida are prevented from providing evaluations that are not in full compliance with the Uniform Standards of Professional Appraisal Practice even though federal requirements only call for compliance with the Interagency Appraisal and Evaluation Guidelines.
Evaluation services in the state have been provided by non-appraisers, such as brokers and salespersons, accountants, architects, financial analysts and data providers, all of whom do not have to meet the same licensing and standards compliance requirements as appraisers. State-licensed appraisers will now be able to perform services on these same terms in compliance with federal requirements. Florida joins Georgia, Illinois, Tennessee and Virginia in allowing appraisers to perform evaluations.
The second provision clarifies that the Florida Real Estate Appraiser Board has the authority to adopt rules allowing for the use of standards of professional practice other than USPAP for “nonfederally related transactions.” Such transactions include appraisal assignments for portfolio monitoring, financial reporting, litigation, tax and consulting, among other areas. The law requires appraisers using development and reporting standards other than those contained in USPAP to comply with USPAP Ethics and Competency Rules and other requirements adopted by the Board by rule. The law clarifies that any valuation work performed per standards other than USPAP cannot be used to satisfy the experience requirements for any Florida appraiser credential.
In 2015 and 2016, the FREAB undertook a rulemaking proceeding that would have allowed the use of standards other than USPAP if additional standards “meet or exceed” USPAP. The provisions in HB 927 remove that arbitrary threshold and grant much broader authority to FREAB to consider standards other than USPAP. Further rulemaking proceedings will need to be undertaken by FREAB to fully implement this new provision.
The Region X Government Relations Committee, under the leadership of Chair Wesley Sanders, MAI, advocated for this legislation, meeting with the state’s Department of Business and Professional Regulation about these two provisions. Additionally, AI professionals in Florida participated in Region X’s ValuEvent on Feb. 14 in Tallahassee, meeting with many legislators to urge support for the provisions.
View a copy of HB 927.
The Mann