I hope you’ve had a great start to this new year! It is my sincere hope that, as we turn our calendars to the Appraisal Institute’s 90th anniversary, we are able to spend more time together doing the things we love.
As I begin my year as Appraisal Institute president, I’d like to let you know a bit more about me. One thing you may not know is that I was a high school football official for over 30 years. Like our work as appraisers, officiating allowed me to play an important role in the game as a neutral party seeking a fair outcome for all involved, and ultimately calling it like I saw it. Officiating taught me how to make decisions quickly, work within the rules of the game, how to deal with people in high stress situations and how to manage a variety of personalities when communicating during a contest. Those experiences have served me well when dealing with clients in difficult situations and with attorneys during the rigors of testimony. I am often asked what I do for a living, and I mention I am an expert in conflict management.
This has been an exciting month for me as I’ve taken over the reins from 2021 President Rodman Schley, MAI, SRA, and I appreciate everything that he – and his predecessors – have done to make our organization as strong as it is. It is a sincere privilege and a high honor to serve this organization and I look forward to a great year together.
Here’s some of the latest news from the Appraisal Institute.
Fair Housing Report on TAF Released, PAVE Report Expected Next
The Property Appraisal and Valuation Equity Task Force is expected to release a report with findings and recommendations to President Biden by late February or early March. Based on conversations the Appraisal Institute has had with the White House and agency officials, the findings and reports will be far-reaching to include identification of issues and proposals on consumer disclosures and appeals processes, diversity efforts within the profession, education and the appraisal regulatory structure. The Appraisal Institute has provided input to the PAVE Task Force by participating in listening sessions and direct meetings with White House and agency staff. We have also remained engaged with congressional oversight offices, as the report is expected to include several legislative recommendations requiring congressional action.
The National Fair Housing Alliance, under contract by the Appraisal Subcommittee and the Council on Licensure, Enforcement and Regulation (CLEAR) released a report with findings and recommendations relating to The Appraisal Foundation standards and qualifications processes and procedures. The report is far reaching, touching on such issues as appraisal standards, appraiser qualifications and mortgage process and procedure issues, with some recommendations requiring legislative action. Consumers are recommended as intended users under USPAP, and TAF is recommended to develop guidance around Reconsideration of Value policies and procedures relative to communications with consumers. Fair housing education is emphasized, as are a host of governance issues ranging from make-up of the ASB and AQB and how proposals are exposed and ultimately adopted.
Fannie Mae also released a report relating to their bias research. It’s a memo and will lead to a broader white paper that plans to come out in Q2.
It has different findings than some of the previous research – it looks exclusively at refinance transactions in 2019 and 2020. Undervaluation of Black-owned homes occurred at the same rate as white-owned homes in majority-white neighborhoods. In majority-Black neighborhoods, the frequency of undervaluation for Black and white homeowners is within a percentage point of each other. “Undervalued” equates to an appraised value at least 10% lower than the automated valuation models.
Six states accounted for nearly 50% of the overvalued homes of white owners in majority-Black neighborhoods. The states were Georgia, Louisiana, South Carolina, North Carolina, Mississippi and Alabama.
Some possible explanations are provided – comp selection and location being two possibilities. Some solutions are provided, including the expanded use of desktops, hybrids, over/under valuation flags through their QC process, working with industry and ADI being some.
In response to the report, I provided the following statement to the media, which Valuation Review and National Mortgage News included as part of their coverage of the issue.
“While we’re analyzing the findings from Fannie Mae’s report, what we can say with absolute certainty is that bias has no place in appraisal, and we’re pleased that Fannie Mae’s research did not uncover undervaluation of Black-owned properties. For the last several years we’ve worked to recruit and expand opportunities for appraisers of color and women through the Appraiser Diversity Initiative, raised ethical standards for our membership, convened researchers and experts, worked closely with congressional leaders, and advanced legislation to require education on antidiscrimination and fair housing. The Appraisal Institute takes its responsibility to help ensure equity and fairness in valuation seriously now and will continue to do so in the future.”
Combined, the three reports are expected to set the stage for an active regulatory and legislative year in the valuation field.
Appraisal Institute Announces Location for 2022 Annual
Conference
The Appraisal Institute is heading to fabulous Las Vegas for the 2022 Appraisal
Institute Annual Conference, Aug. 2-3, at the Bellagio Hotel & Casino. This
year, AI is going all in for its conference. You’ll meet professionals from the
U.S. and around the world, get access to outstanding education sessions,
explore the latest valuation products and services, all while having a great
time in Las Vegas.
We’re raising the stakes this year. We hope you’ll join us. Stay tuned for more information in the months ahead.
Appraisal Institute Recognizes 3 Individuals as ‘Volunteers of Distinction’
I know firsthand how much the Appraisal Institute relies on its volunteers at every level of the organization. We are a stronger organization thanks to the hard work and dedication of these individuals, who have earned the title of “Volunteers of Distinction” for the fourth quarter 2021:
Do you know a volunteer who should be honored for their commitment to the Appraisal Institute? Learn more about the program by clicking here.
Other News Around the Appraisal Institute
And here’s some other important news from the Appraisal Institute:
- The “Dictionary of Real Estate Appraisal,” seventh edition, is now available for purchase. This landmark text reflects the depth and breadth of appraisal knowledge. Get your copy here.
- The Appraisal Institute continues to expand its social media activities. Be sure to follow AI on Facebook, Twitter,Linked In, YouTube, and its blog, Opinions of Value.