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.
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
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
- 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
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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