PAVE Action Plan to Advance Property Appraisal and Valuation Equity

By McKissock, March 23, 2022
Two of the more controversial recommendations:
Inform Federal Housing Administration (FHA) borrowers about the process to request a reconsideration of a valuation when the initial valuation is lower than expected.
Perhaps the most far-reaching recommendation for action is number 1.6, which states, “Develop a legislative proposal that modernizes the governance structure of the appraisal industry to improve transparency and public participation in the establishment of appraisal standards and appraiser qualification criteria, and to advance diversity in the profession.” Translation: Amend FIRREA to remove references to The Appraisal Foundation and transfer the Foundation’s authority to write appraisal standards and qualifications to the Appraisal Subcommittee or another federal government entity.
As of this writing, no proposed legislation related to the PAVE recommendations has been introduced. Because committees in both the Senate and the House are holding hearings, a bill (or, more likely, bills) can be expected very soon. Stay tuned.
Short and worth reading. To read more, including links to the full PAVE report and the summary, click here
AEI’s Comments on PAVE Report
Excerpt: The Brookings and Freddie Mac studies are not based on rigorous data analysis. Most importantly, they conflate race with socio-economic status (SES), i.e. income, buying power, marriage rates, credit scores, etc. Race-based gaps found in the Brookings and Freddie Mac studies either entirely or substantially disappear when adjusting for differences in SES. Furthermore, our analyses show that similar gaps are present in majority White or White-only tracts across different SES levels, raising serious questions regarding a race-based explanation.
To read more, click here
My comment: American Enterprise Institute is a conservative “think tank” and has also supported the appraisers’ side on other issues.

Congress Committee Meetings on Appraisal Bias

Strengthening Oversight and Equity in the Appraisal Process
Thursday, March 24, 2022
Senate Committee on Banking, Housing, and Urban Affairs
Appraiser Witness: James Park, Executive Director Appraisal Subcommittee
To watch, click here

Devalued, Denied, and Disrespected: How Home Appraisal Bias and Discrimination Are Hurting Homeowners and Communities of Color Tuesday, March 29, 2022

House Financial Services Committee

Appraiser speakers:
  • Pledger M. Bishop, III, President, Appraisal Institute
  • David S. Bunton, President, The Appraisal Foundation
  • Dean Kelker, Senior Vice President and Chief Risk Officer, SingleSource Property Solutions, on behalf of the Real Estate Valuation Advocacy Association
To watch, click here
My comments: I was not able to watch either of these meetings before writing this newsletter.
Jonathan Miller attended the virtual March 24 meeting and had comments on the March 24 and 29 hearings. To read his comments, click here Scroll down to “James Park”
His blog post for today (usually sent around 11 AM EST) may have comments on the March 29 meeting. To read his comments, click here. Search for “devalued” (Hopefully, this link works.)

Appraisal Business Tips 

Humor for Appraisers

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To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, 1004/Desktops, mortgage origination stats, etc.


Tiny-House Madness: 196-Square-Foot Home Available for $1.1M

Excerpts: The home in Santa Rosa Beach FL measures just 196 square feet and is on the market for $1,095,000. That comes out to $5,587 per square foot. But the price reflects much more than the diminutive dwelling.
The property is just a short walk to Seagrove Beach, a popular Panhandle destination on a quarter-acre lot. The home was built in 2016 with a corrugated metal roof, shiplap walls, and a hardwood floor. But it’s basically a single room and a bathroom. Due to the lack of space, the “kitchen” resembles a hotel kitchen with a sink, small refrigerator, microwave, and coffee maker. The bathroom is equipped with a claw-foot tub and a pedestal sink. The shower is outside.
“If the dwelling does $50,000 a year in revenue (AirBnb), and you added two more, and they did the same thing, and you could rent each one for $50,000, the numbers make a lot of financial sense at $150,000 a year gross rental income” per the listing agent.
To read more and see the photos, click here
My comments: Highest and best use? Tear down? AirBnB?

New in the April issue of Appraisal Today

  • How to handle a “low” appraisal By Tim Andersen, MAI.
  • Engagement Letters By Claudia Gaglione, Esq. Includes a sample you can copy and paste.
  • Is is jUSt USPAP? By Barry Bates. Interesting and fun comments from a long time appraiser.
  • Pocket App for saving information By Wayne Pugh, MAI.
  • Do tandem bedrooms and garages impact value? By Jamie Owen. Good comments, images, and a fun video.
  • Updated Standardized Property Measurement Guidelines – 19 new FAQs
To read more, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
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1004/Desktop Links

Note: I have been spending much time researching Desktops. The links are very popular in these email newsletters. I will be writing more about Desktops in my May Appraisal Today newsletter.
Bradford Webinar about 7 apps plus comments by Scott Reuter, Freddie Mac Chief Appraiser
Scott Reuter said you Must Have:
  • Floor Plan
  • Building sketch (can be on floor plan)
  • Photos: front, rear, and street scene.
There have been problems with some Desktops not having all of these. They are not the same as the old desktops, which were used for many years. Data collectors and real estate agents are using the apps.
Be sure sure to listen to Reuter speaking in the beginning and near the end, starting at 1 hour 4 minutes, followed by a good Q&A section.
To watch click here
New Desktop Appraisal Policy with Freddie Mac’s Chief Appraiser, Scott Reuter
22-minute video interview with Joan Trice. March 30.
Joan Trice asks some tough questions. There is lots of misinformation and myths out there. Don’t rely on social media. Hear what it is all about from him. He discusses why they are doing desktops, what AMCs are saying, how they are very different from hybrids (being tested by the GSEs), and many other topics. Plus, problems with the first desktops they have seen.
He is an excellent speaker. I have heard him speak many times on desktops. Fannie and Freddie started using 1004/Desktops in mid-March 2022.
To watch the video click here
Understanding Desktop Appraisals 2 Hour Zoom Class April 12
Help a fellow appraiser and get CE in California and Nevada.
Have you been asked if you will complete desktop or hybrid appraisals? Learn the ins and outs, risks, and best practices, so you can make an informed decision on whether to add these products to your offerings.
The Real Estate Appraisers Association (REAA) is hosting a Zoom class from Denis DeSaix, MAI, SRA, principal of Metrocal Appraisals, and Jared Mickel, SRA, Director of Quality Control Escalations at Class Valuation AMC on Tuesday, April 12 from 6:30 PM PST to 8:30 PM PST. This class is approved for 2 hours of continuing education in California and Nevada.
Cost is $30 for REAA members/$60 for non-members with proceeds going to appraiser and REAA member Alexis Grey to help her in her fight against MS.
Sign up here. If you are not a member of REAA, click Create Account on the top right of your screen, scroll down the screen to “Membership Type Details”. To the right is “Please Select” then choose the Free Website Profile option to create a profile.
Questions? Email
For ANSI information on webinars, classes, etc. go to

WorkingRE Appraiser Survey – Will appraisers do Desktops?

One of the questions:
Q2 Do you intend to do Desktop Appraisal Reports?
Yes 15.52%
No 55.77%
Unsure 28.72%
To read lots more results, including fees, click here
My comments: It will be interesting to see how many appraisers will do these desktops. GSEs don’t anticipate a lot of them until lenders get used to doing them. The Covid desktops were not widely adopted.


The Village of Monsanto – Idanha-a-Nova, Portugal

Houses are tucked between, on, and underneath giant boulders.
Excerpts: The village has hardly changed in hundreds of years, and enjoys distinction in Portugal as a living museum. Due to this standing, Monsanto cannot be changed and has retained its classic village charm.
Its tiny streets wind at a steep grade past red-roofed cottages tucked against mossy boulders. Some of the boulders are actually fitted with doors, leading to structures carved right into the rocky landscape.
To read more and see more fascinating photos, click here
My comment: I have seen photos of homes built around boulders, but never this many in one town or built inside boulders!!
HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to or send an email to . Or call 800-839-0227, MTW 7AM to noon, Pacific time.
My comments: Rates are going UP! Make money while you can!!

Mortgage applications decreased 6.8 percent from one week earlier

WASHINGTON, D.C. (March 30, 2022) – Mortgage applications decreased 6.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 25, 2022.
The Market Composite Index, a measure of mortgage loan application volume, decreased 6.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 15 percent from the previous week and was 60 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 10 percent lower than the same week one year ago.
“Mortgage rates jumped to their highest level in more than three years last week, as investors continue to price in the impact of a more restrictive monetary policy from the Federal Reserve. Not surprisingly, refinance application volume declined further, as fewer borrowers have an incentive to apply at rates that are significantly higher than a year ago. Refinance application volume is now 60 percent below last year’s levels, in line with MBA’s forecast for 2022,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Even with the ongoing climb in rates, purchase application volumes were little changed last week. This is particularly auspicious, as we are now in the beginning of the spring homebuying season, and those shopping for homes are struggling with not only higher and more volatile mortgage rates, but also an ongoing shortage of homes on the market. Given these hurdles, it appears to be promising news that purchase application volume has not declined, as many potential buyers are likely feeling the squeeze in their purchasing power from the jump in rates.”
The refinance share of mortgage activity decreased to 40.6 percent of total applications from 44.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.6 percent of total applications.  The FHA share of total applications increased to 9.3 percent from 8.8 percent the week prior. The VA share of total applications decreased to 9.5 percent from 9.8 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.80 percent from 4.50 percent, with points decreasing to 0.56 from 0.59 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) increased to 4.40 percent from 4.11 percent, with points decreasing to 0.44 from 0.51 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.66 percent from 4.40 percent, with points decreasing to 0.71 from 0.73 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 4.01 percent from 3.76 percent, with points remaining unchanged at 0.55 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.70 percent from 3.39 percent, with points remaining unchanged at 0.54 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.
Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone 510-865-8041

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