Appraisal Institute Counters Flawed Appraiser Bias Narrative

Excerpts: In reality, appraisers have a great story to tell, but we have a long way to go to refocus the terribly flawed “appraiser bias” narrative onto facts and science.

Last week’s email from Cindy Chance, the CEO of the Appraisal Institute, marks an important and long overdue shift in the organization’s approach to addressing accusations of bias in the appraisal profession. For too long, appraisers have faced sweeping claims that their valuations are biased against certain groups, despite appraisers’ ethical standards, rigorous training, and lack of financial stake in transactions.

As Chance acknowledges, the Institute should have done more to advocate for appraisers and make the public aware of their professionalism. This public acknowledgement of an obligation to counter the flawed “appraiser bias” narrative is an encouraging first step. Appraisal organizations like the Appraisal Institute should advocate for appraisers, as advocacy is a key membership benefit. Industry groups should also step up to support appraisers.

Importantly, Chance points out that claims of appraiser bias contradict what appraisers actually do. Their role is to provide impartial, data-driven opinions of value. She explains how pioneering research in psychology revealed that all humans have cognitive biases, but professionals like appraisers are trained to minimize bias through rigorous methodology. In fact, appraisers’ discipline protects homebuyers and the industry from irrational biases.

Chance suggests the Institute will undertake communications grounded in facts and science to reframe the false narrative around appraiser bias. With their scientific expertise and ethical standards, appraisers have a strong basis to counter the accusations. Chance’s leadership in publicly addressing the issue and committing to advocate for appraisers represents an encouraging change of direction for the Institute.

To read more, including the full document, Click Here

My comments: Read it. Note: it can be “dense” with very long paragraphs. This is, by far, the best writing I have seen on bias related to appraisals. I have been saying for a while that all humans are biased in some way. It is human nature.

When I read it last week, I was going to put a link to it in this newsletter. Now that appraisersblogs has published the full document, you can read and make comments.

For a long time, since AI dropped out of the Appraisal Foundation, I have said, “I am a 35-year member of AI. I stay because my MAI is very, very valuable (similar to CPA).” Plus, I have an excellent local chapter.

I have been reading Cyndi Chance’s emails to members and following her activities to reach out to local chapters since she started last fall.

I am so glad that AI is now taking on the bias issue. I recently took USPAP plus two California bias classes in a two week period. After I finished them, I thought of giving up my license (CA is not a mandatory state) and maybe quitting appraisal. After a rough weekend, I decided not to leave. Finally, I now see there is hope!

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NOTE: Please scroll down to read the other topics in this long blog post on non-lender appraisals, forms to reports modernization, AMCs, earthquake risk, unusual homes, mortgage origination stats, etc.



Rare Coastal Contemporary Manchester, MA, for $9M

Excerpts: 5 bedroom, 4.5 bath, 5,258 sq.ft. 12.79 Acres, Built in 2004

Cape Cod style, it is not.

This glass-and-steel home features curving rooflines and a wide open interior.

“The No. 1 thing that makes this house stand out is that it is a contemporary in Manchester by the Sea,” says listing agent Lanse Robb, of Landvest, Inc., Manchester-By-The-Sea. “There are a lot of shingle-style homes here that are iconic, but this one’s distinctive design stands out and is completely different.”

“Another unique feature is that it is tucked up on a hill and is not sitting on the water, so you don’t get hurricanes blowing through the windows,” he says.

Designed for the outdoor enthusiast, the 5,200-square-foot property has five bedrooms and direct access to hiking and mountain biking trails.

“You can walk right out the front door and connect to 2,000 acres of trails,” Robb says. “They were old cart paths at the turn of the century that go into Gloucester. It’s also a half-mile away from White and Black Beaches. Beverly Regional Airport has private airplane access and is just 10 minutes away, and you can get to Boston in about 35 to 40 minutes.”

Even the two-car garage is an architectural marvel, with its tentlike roof that appears to float above a glass-curtain wall box.

To read more, Click Here

To see the listing with 39 photos and a video tour, Click Here


From Forms to Reports: A Look at the UAD Overhaul

By Ernie Durbin, SRA, CRE

Excerpts: It all starts with the standard appraisal forms used in the mortgage process. There are 12 principal forms used for a mortgage origination appraisal. These forms have been around since the early 1980s with a few revisions over the years. The original forms were designed before the digital age, to be completed on typewriters.

These forms became fixed in the mortgage industry and have remained the standard for decades. Appraisal software companies have innovated the process of “filling out “these forms, but they are still constrained with the original typewriter design.

The UAD “codes” that we use as appraisers are a result of restrictive nature of the “forms,” there is only so much space available on the forms. As a result, saying that a site location is residential in nature, and neutral in terms of surrounding influences becomes “N;Res;” to fit in the legacy form field.

It has been four decades since the forms originated, and nobody uses typewriters anymore. All our forms are generated by software packages that transmit our reports via Extensible Markup Language (XML). But we are still stuck with the “form” functionality.

The new data set is all encompassing for every property type (residential) that were traditionally divided into 12 separate forms. The appraiser will be led through a process, defined by the scope of work.

Data will be emphasized and made more discrete. The intention is to make the appraisal more objective and less reliant on subjective language and commentary. Data fields that were once abbreviated will be displayed in human understandable text. There may be more data points, but there will be less narration necessary by the appraiser. Appraiser can focus on analysis and less on commentary.

This all sounds great, but the road of innovation ahead will have some curves that need to be negotiated. There are many stakeholders in the mortgage process that these changes will impact and require significant resources for change.

The transformation is required at the end of 2026 with testing beginning late 2025. To see the Fannie time line graphic, Click here

To read more, Click Here

My comments: Read this article. The author provides an excellent, understandable summary of the issues. He has been around for a long time. Ernie is the Chief Valuation Officer at Voxtur, where he develops innovative solutions for the valuation industry and expands Voxtur Valuation Services. In his private practice, Durbin focuses on complex residential valuation challenges.

Personally, I never liked trying to cram the UAD changes into the existing forms. The forms were not easy to use before UAD. A Big Mess.


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Fed says rates will not drop “anytime soon”.

Time to consider non-lender work to make your business more diversified to survive and plan for future downturns?

Most popular for residential appraisers:

• Estate and Trust – the most popular non-lender appraisals. Parts 1 and 2

• Divorce Appraisals – much higher fees than AMC/lenders.

A few other types of non-lender appraisals:

• Assessment Appeals – Marketing, Reassessment Opportunities, Fees, Critical dates, etc. Very easy marketing – letters or post cards.

• Private Money Lending – fast turn times, high fees. Meet in person. Mailings are possible.

• Bail Bond Appraisals are all cash, very high fees, and little competition. You meet in person in offices. Don’t market to attorneys. Mailings are possible.

NOTE: I have been doing non-lender appraisals since I started my business in 1986. In my opinion, they are easier than GSE lender appraisals. The ever changing bias “bad words” is a good example. With non-lender appraisals you choose your clients, turn times, fees, scope of work, words you use, etc.

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Choosing the Right AMCs for You

By Kevin Hecht

Excerpts: here are several benefits of working with AMCs, but there are downsides as well. In fact, according to NAR Research Group’s 2023 Appraisal Survey, 54% of surveyed appraisers cited AMCs as one of the biggest challenges in their business. Here’s an overview of common upsides and downsides for appraisers:

Step 2: Investigate each appraisal management company

For each company you decide to investigate, it’s a good idea to do the following:

Ask for information: Check with your state board to see if they are properly registered, and ask about previous complaints.

Excerpts: Check the AMC webstites for info on:

  • Policies and procedures – Including indemnification clauses
  • Payment policies – 15 days, 30 days, ACH payment?
  • Appraiser program benefits – Auto-assignment, fewer emails and calls, faster payment?
  • Appraiser bulletins and announcements – Do they help keep you informed with industry changes?
  • Industry reference materials – Are they a source for information and guidance?
  • Appraisal helpline – Do they offer assistance before submitting the assignment?
  • Ask for a copy of a typical engagement letter – Determine your scope of work.

To read more, including more tips on evaluating AMCs Click Here

My comments: This blog post was written for new appraisers but has excellent advice for investigating AMCs for experienced appraisers. I tend to be negative about AMCs, but I know appraisers who have a few “good” AMCs they work for, plus direct lenders and non-lender appraisals. AMCs are not going away.

In a recent article for my monthly newsletter May issue, I compared working for an AMC to driving for Uber: no marketing to them, choosing the lowest fee, all appraisers being the same, self-employment, etc.


Not Even Minnesota Is Safe From Earthquakes

Was the recent New York quake really all that uncommon? Here’s a state-by-state map.

Excerpts: The Pacific coast is purple: the highest hazard. The entire West is shaded in colors denoting declining hazard. Only relatively small parts of the country are covered by the zone of lowest hazard.

Minnesota earned its blue spot from the 1975 Morris earthquake. With its epicenter in Stevens County, it struck at around 10 a.m. on July 9 of that year and had a magnitude of 4.6.

To read more, Click Here

My Comments: I will never forget reading about the New Madrid earthquake:

1812, February 7, 09:45 UTC, New Madrid, Missouri Magnitude ~7.4 – 8.0, on the graphic above. This was the fourth earthquake of the 1811-1812 series. Several destructive shocks occurred on February 7, the last of which equaled or surpassed the magnitude of any previous event. The town of New Madrid was destroyed. Fortunately, not many people were living in the affected areas. I’m sure there were lots more major earthquakes before this one, but there had to be someone to report them in a newspaper, for example.

I was not surprised to hear about the recent New York earthquake. Fault lines are everywhere, but the West Coast is “newer” geologically and has more active faults.

I moved to San Francisco with earthquakes in 1968 from Oklahoma and tornadoes. I can’t decide which is worse: waiting in the root cellar to see if the tornado hits or getting a 1-2 minute earthquake warning through a smartphone app.

I live 10 miles from San Francisco across San Francisco Bay. We all remember the major earthquake 7.9 on April 18, 1906, that destroyed much of San Francisco, with 80% destroyed by to fires. Many residents moved across San Francisco Bay to Oakland and other nearby cities.

I live between two major earthquake faults, 10 miles on each side. I will always remember the photo of part of the Bay Bridge collapsing in the 1989 earthquake. I have emergency kits with food, water, medications, and much more in my home and car.


Prepper Paradise: Bumper Crop of Bunkers for Sale in South Dakota ‘Survival Community’

Excerpts: Three bunkers that can be turned into safe homes are for sale in a prepper town near Edgemont, SD.

A former Army property houses the 575 concrete and steel bunkers, many of which have been already converted into escape shelters, vacation homes, or full-time residences.

For those with a prepper state of mind, this might be paradise.

It’s a safe-home community. I don’t know of any other community quite like it,” says Jared Stokes with Exit Realty Black Hills. He’s the listing agent for two of the bunkers that are on the market, one of which is listed for $50,000 and the other for $64,950.

“You hear of some here and there with missile silos, but this one is a preppers’ community where they can go and get away from the buzz of life,” says Stokes. There are 575 bunkers on a former Army base near Edgemont, SD.

The bunkers are sheltered by earth and ready to be built out.

The prices differ based on what has already been done to the bunkers involving the cleaning, painting, and interior preparation.

To read more, Click Here

My comments: I remember back in the 1950s when many people built bomb shelters in or near their homes and elsewhere. It was a scary time when we all practiced getting under our desks at school when there was a nuclear bomb.

More recently, some wealthy persons have been thinking about building extensive “bunkers” and trying to figure out the safest places in the world to build.


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 Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.

My comments: Rates are going up and down. Many appraisers are not busy. Some are busy, usually with non-lender appraisals.

Mortgage applications increased 3.3 percent from one week earlier

WASHINGTON, D.C. (April 17, 2024) — Mortgage applications increased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 12, 2024.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 4 percent compared with the previous week. The Refinance Index increased 0.5 percent from the previous week and was 11 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 10 percent lower than the same week one year ago.

“Rates increased for the second consecutive week, driven by incoming data indicating that the economy remains strong and inflation is proving tougher to bring down. Mortgage rates increased across the board, with the 30-year fixed rate at 7.13 percent – reaching its highest level since December 2023,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Despite these higher rates, application activity picked up, possibly as some borrowers decided to act in case rates continue to rise. Purchase applications drove most of the increase, but remain at low levels of around 10 percent behind last year’s pace. Refinance applications increased very slightly, driven by a 3 percent gain in conventional applications.”

The refinance share of mortgage activity decreased to 32.1 percent of total applications from 33.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.3 percent of total applications.

The FHA share of total applications increased to 12.3 percent from 12.1 percent the week prior. The VA share of total applications decreased to 12.4 percent from 14.0 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 7.13 percent from 7.01 percent, with points increasing to 0.65 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 $766,550) increased to 7.40 percent from 7.13 percent, with points decreasing to 0.46 from 0.56 (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 6.90 percent from 6.80 percent, with points increasing to 0.99 from 0.93 (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 6.64 percent from 6.46 percent, with points increasing to 0.64 from 0.60 (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 6.52 percent from 6.41 percent, with points decreasing to 0.60 from 0.67 (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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