Appraiser Countersues Black Plaintiffs Who Alleged Discrimination
by Isaac Peck, Publisher WorkingRE
There are now a number of lawsuits facing appraisers where the primary allegation is racial discrimination.
Tate-Austin v. Janette Miller, filed in California in Dec. 2021, was one of the first (and perhaps the most publicized). But since late 2021, a number of similar lawsuits have popped up—from North Carolina to Maryland.
Connolly & Mott v. Shane Lanham et al. is one highly publicized lawsuit covered at length by mainstream media–CBS News, The New York Times, NBC, CNN, ABC News, and more.
Filed in August 2022 in the U.S. District Court of Maryland, Connolly and Mott allege that Lanham discriminated against them and violated professional appraisal standards because of his allegedly “racist beliefs” (among other things).
Mr. Lanham is now countersuing Connolly and Mott for labeling him a racist, making false and defamatory accusations, and causing severe harm to his business, his reputation, and his well-being. Alongside his counterclaim, Lanham has also filed a Motion to Dismiss Connolly and Mott’s initial claim, arguing that they have failed to show any facts that support he discriminated against them.
“Plaintiffs cannot transform allegations of incompetence or a breach of appraisal industry standards into racial discrimination by baldly alleging that Mr. Lanham believed that Plaintiffs did not belong in their neighborhood and that their home was worth less than other homes because of their race. There are no facts alleged in the First Amended Complaint, and none can be alleged with good faith, that Mr. Lanham treated Plaintiffs any differently than homeowners of other races,” the motion reads.
To read more, click here
My comments: Long article and worth reading. Discusses many issues and lawsuits. I don’t write about this topic much. My opinion is that everyone is biased against something. I learned I was biased against young Black men when I was on a criminal jury many years ago.
When a young Black man, the defendant, walked into court, I immediately thought he was guilty. I sent a note to the judge who excused me publically in court. I was very, very embarrassed. But it would have been a lot worse to stay on the jury and vote to convict him. My parents raised us not to be prejudiced against anyone. But I grew up in Tulsa, OK, next to Greenwood, an area of successful Black residents prior to 1921. The Tulsa race massacre occurred on May 31, 1921. I never heard it mentioned by anyone. Older people, who knew about it, never spoke of it. Some newspaper issues were destroyed.
I assume that since I had been appraising in high crime neighborhoods, I became prejudiced. I work hard not to show it. I don’t cross the street when I see a young black man coming towards me, and I smile when we pass, but I do get a little nervous. What is most important is recognizing and not acting on your prejudice.
I have been tempted to lower a value when an owner’s large do dog jumps on me or tries to bite me. But I know I don’t like aggressive large dogs and don’t let it affect my value.
Of course, some appraisers could be biased. But, for residential lender appraisers, there is no advantage to coming in “low” on any residential lender appraisal. You may lose a client.
In the past, appraisers were trained by FHA to redline, with lower values in Black neighborhoods. Appraisal textbooks and classes included this. But, it all changed in the mid-1970s, when I started appraising and was no longer allowed. Hopefully, I would not have become an appraiser working for residential lenders before then because of the obvious bias.
Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!
NOTE: Please scroll down to read the other topics in this long blog post on AirBnB, state board complaints, real estate market, non-lender appraisals, unusual homes, mortgage origination stats, etc.
TO READ MORE CLICK BELOW
===============================================
Waterfront Is Connecticut’s Most Expensive Home at $150M
Excerpts: The home last hit the market in 2014, when it reportedly sold for $120 million—a drop from its initial $190 million asking price.
The estate was built in the 1890s and is home to hundreds of copper beech trees, as its name suggests. It is Greenwich’s largest waterfront parcel and possibly the largest in the entire tri-state area of New York, Connecticut, and New Jersey, says McElwreath.
The 50-acre property is perched 40 feet above water on a private peninsula with Long Island Sound views, alongside a private island.
Although the island is undeveloped, that’s part of the charm. “You can row out and have your picnic and, in the evening, watch the sunset,” says McElwreath.
Included in the compound is a 13,519-square-foot, eight-bedroom, eight-bath house at the end of an 1,800-foot cobblestone driveway. Nearly every room in the house offers beautifully framed water views.
Storied estate
In 1893, New York City native John Hamilton Gourlie bought the land and built the main house.
His children inherited the property after his death and later sold it to Harriet Lauder Greenway, whose father helped Andrew Carnegie create the company later known as U.S. Steel.
She expanded the property to around 100 acres and turned it into a working farm. After her death, it was reportedly sold for $7.5 million in a private transaction to timber tycoon John Rudey. The current owners bought the place in 2014.
Despite the home’s age, it isn’t a money pit or desperate for a renovation. Everything has been fully modernized.
“The family has brought the property back to life and preserved it,” says McElwreath. “It’s as good as new in that it feels like the original home. They did millions of dollars of work.”
That includes updates to the plumbing, electrical, kitchen, and baths.
Oak paneling, fireplaces, and plaster friezes are among the preserved historical details. The main rooms boast 12-foot ceilings.
To read more and see lots of photos, click here
===============================================
Market Cycles, Airbnb?, Doom and Mental Health
June 28, 2023 By Ryan Lundquist
Excerpts: A meme I shared this week as I talked about the concept of a forever home. It’s a forever home until it’s not… This meme was born from conversation around the topic. Too real at the moment… Editor’s note: I would fit right into that photo. I’m never giving up my 3.5% rate!
Let’s talk about housing doom. Particularly, I want to get into the viral idea about the demise of the Airbnb market.
Airbnb doom thoughts
There’s a prominent narrative on social media about the Airbnb market imploding. In fact, this week there was a viral tweet from Nick Gerli about a massive drop in Airbnb income in various markets. This guy is pretty much the chief of the housing doom prophets. He has built a massive following. Today I want to talk about some of his thoughts. This isn’t about throwing shade or real estate gossip, but interacting with ideas that are becoming a part of the housing narrative. This is REALLY important to talk about.
The Data Needs to be Questioned
One of the struggles with short-term rental data is it’s not easy to get unless you pay for the information. My sense is the Airbnb crash narrative sometimes relies on individual stories like, “My sister’s boyfriend’s uncle can’t find renters any longer, so the market is collapsing.” All I’m saying is it can be difficult to fact check the trend in light of a lack of publicly available information.
Markets go up and down
I’ve been writing for years about how normal it is for markets to go up and down. Housing markets are like my waist line. The numbers are constantly changing. Haha. In truth, prices don’t stay the same. On that note, a critique of a rosy real estate narrative is that things aren’t always super positive and glowing. That’s why I reject the rosy side of real estate too (I’m on team stats).
Doom and mental health
First, everyone is responsible for their own mental health, and we cannot blame other people for the way we think and feel. But I want to challenge those who perpetuate housing doom online because there are many people listening who might walk away thinking there is no hope in life, everything is going to collapse, all is lost, and there is only death and destruction ahead.
I talked with someone last year who was struggling with suicidal thoughts when the housing market saw a major shift. The sharp loss in value was a massive issue for this person. Look, this guy needed to talk to someone and work through some issues, and I tried to help. It certainly wasn’t the doom narrative’s fault here either, and I’m not implying that at all, so save your hate mail. However, listening to some doom voices on social media was taking a real toll on this guy’s mental health, so words and narratives do matter. If all people hear is, “We’re going crash hard,” it’s bound to have an effect.
To read more, click here
My comments: Whenever I say I am an appraiser, younger people who don’t own a home always ask if they will ever be able to buy. I tell them to buy when prices drop to the bottom, and no one else is buying. When I started appraising in the 1970s, in a college town 3 hours north of San Francisco, prices were going up 2% per month. From 1980 to 1985, interest rates were high (18%+), and prices dropped significantly. I have been through ups and downs, reflected in the graph above.Click here for the 4 ways, plus information on why I take ads, etc.
=======================================
Types of Non-Lender work – many more articles are available!
• Estate and Trust – the most popular non-lender appraisals.
• Divorce Appraisals – much higher fees than AMC/lenders.
• Assessment Appeals – Marketing, Reassessment Opportunities, Fees, Critical dates, etc. Very easy marketing letters or post cards.
• Home Measurement Services – How to Use Your Appraisal Skills to Make More Money. Smartphone apps make it easy.
To read these articles, and many more, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
—————————————————————-
You will receive a prorated refund.
$8.25 per month, $24.75 per quarter, and $89 per year (Best Buy)
or $99 per year or $169 for two years
Subscribers get FREE: past 18+ months of past newsletters
To purchase the Monthly Appraisal Today newsletter:
www.appraisaltoday.com/order or call 510-865-8041
What’s the difference between the Appraisal Today free Weekly email newsletters and the paid Monthly newsletter?
=================================================
If you are a paid subscriber and did not get the July 2023 issue emailed on Monday, July 3, please email info@appraisaltoday.com, and we will send it to you!! Or hit the reply button. Be sure to put in a comment requesting it.
===============================================
The Full Measure with Kevin Hecht: Economic Recap June 2023
By: McKissock June 29, 2023
Excerpts: June 2023 was packed with economic updates that real estate appraisers, agents, and other professionals need to digest. The Federal Open Market Committee held its meeting, where projections for real gross domestic product growth, unemployment rate, and inflation were discussed. Additionally, consumer spending forecasts revealed modest growth predictions. Amid all this, the Federal Reserve maintains the federal funds rate, pausing its rate hike cycle for now. Let’s delve deeper into the details and implications of these economic trends.
Existing home salesExisting home sales in the U.S. in May 2023 marginally increased by 0.2% to a pace of 4.30 million. Despite this slight rise, sales were down by 14.7% from May 2022. Additionally, the median existing-home price fell by 3.1% year-over-year to $396,100, marking the largest price reduction since December 2011.While higher mortgage rates remain a challenge, the year-over-year price decrease may help stimulate future sales. However, the “mortgage lock-in” phenomenon—where homeowners are reluctant to sell after buying or refinancing at lower rates before 2022—could limit future sales and inventories. Despite a tightening economy and higher inflation, the Federal Reserve has been slow to cut rates, potentially acting as a further deterrent for home sales later in 2023.
To read more, click here
Written by an appraiser: Kevin Hecht. Kevin has been a real estate appraiser since 1987 and currently holds a Certified Residential appraiser license in Missouri. As a McKissock Learning instructor, Kevin specializes in market analysis, USPAP, and real estate economics. In addition to being an appraiser, Kevin is an Adjunct Professor of Economics at Maryville University. He has a B.A. and Masters in Economics plus an MBA.
My comments: Posted monthly. I read a lot of similar material, but this is the first written by a qualified, experienced appraiser.
I had to take an economics class as a prerequisite for my MBA classes in the late 1980s. My undergrad degree was a B.S. in Biology. I thought economics was sorta boring and too theoretical. Economics has changed significantly since then and focuses on data. Since I am a data nerd, I like it a lot better now ;>
===============================================
UFO-Inspired Dwelling in Lansing, Michigan
Excerpts: This deal is out of this world! Behold the affordable, flying saucer–shaped home that’s looking for a buyer to restore its otherworldly beauty.
The three-bedroom residence was built in 1994 and does need some updating. The uniquely designed, circular home features 3,509 square feet of living space.
Round front doors open up to a bright, curved area surrounded by windows. And the kitchen has a similarly rounded countertop and breakfast bar. One of the three full bathrooms features a soaking tub, separate glass shower, and porthole-style window.
A glass-enclosed breezeway connects the home to a two-car garage.
The property also features a 1,440-square-foot Quonset barn for extra storage.The property is an estate sale and is being sold as is.
To read more, click here
My comments: When I started appraising in 1975, I worked for an assessor’s office in a semi-rural part of Northern California with some very strange homes, especially in the eastern mountain areas. I was given a geographic area and had to appraise every parcel there and equalize the values. Very, very good experience that few appraisers get, especially if you only work for lenders/AMCs. Add that an estate sale needing work. This is definitely a challenge!
===============================================
Nearly Half Of Texas Appraiser Complaints Come From The GSEs!
By Jonathan Miller
Excerpts: In the continuing effort to marginalize residential appraisers to data collectors and pivot to AVMs, the GSEs are auto-generating complaints to the states without notifying appraisers, nor are they providing a specific person to appeal to.
What’s so interesting about Texas besides the record heat wave is that:
- 49% of complaints come from the GSEs – 95% are dismissed. Harassment, yes?
- 64% of complaints are towards residential appraisers – targeted by GSEs for replacement by automation
- 72% of complaints are USPAP – shows how ineffective the USPAP teachings set up by TAF are.
To read more, click here
My comments: I have been hearing about this happening for a long time. Good that Texas is giving us an example of what is happening. What about other states, or nationally? If you know, hit the reply button and let let me know!
I started subscribing to Jonathan’s posts a long time ago. Click the link above to see the entire post and subscribe. To go directly to the Texas part, search for Texas. They posts are very long, but on your way scrolling down to the appraisal related sections there are some fun comments, videos, etc.
==========================================
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, click here.
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 go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.
My comments: Rates are going up and down. Some appraisers are very busy, and others have little work. Varies widely around the country.
======================================
Mortgage applications decreased 4.4 percent from one week earlier
WASHINGTON, D.C. (July 6, 2023) — Mortgage applications decreased 4.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 30, 2023. Last week’s results included an adjustment for the Juneteenth holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 4.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 30 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 22 percent lower than the same week one year ago.
“Mortgage applications fell to their lowest level in a month last week as rates for most loan types increased. As mortgage-Treasury spreads remained wide, the 30-year fixed rate increased to 6.85 percent, the highest rate since the end of May,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes. Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country. However, the average loan size for a purchase application declined to $423,500 – its lowest level since January 2023. This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers searched for more affordable options.”
The refinance share of mortgage activity increased to 27.4 percent of total applications from 27.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.2 percent of total applications.
The FHA share of total applications increased to 13.0 percent from 12.9 percent the week prior. The VA share of total applications decreased to 11.7 percent from 12.2 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.85 percent from 6.75 percent, with points increasing to 0.65 from 0.64 (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 $726,200) increased to 6.95 percent from 6.91 percent, with points decreasing to 0.64 from 0.69 (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 6.68 percent from 6.63 percent, with points decreasing to 0.98 from 1.08 (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 6.30 percent from 6.23 percent, with points increasing to 0.91 from 0.69 (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 decreased to 6.00 percent from 6.28 percent, with points increasing to 1.23 from 1.02 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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.
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
Email ann@appraisaltoday.com
We want to know what you think!! Please leave a comment.