A Little Spring Cleaning

A look back at past stories with some current responses

Insider

National Mortgage Professional Contributing Writer

Doing a little spring cleaning, moving stuff off my desk that has been sitting for a bit. So, suffer right along with me as I knock the cobwebs off my trusty, circa-1950s Royal typewriter. Hey, it’s tough to teach an old dog a new trick, especially this codger.

Anyway, to catchup, here are some updates on a few previous stories:

* When we last visited bias in appraisals (February 2022), I wrote that people of color will be taking matters into their own hands in their attempts to have their homes valued fairly. But now, it turns out, they may not have to. Rep. Maxine Waters, D-Calif., is on the prowl. The chair of the House Banking Committee is calling for a full-scale federal investigation.

By the time you read this, Waters may have already dropped legislation into the hopper that would create a new agency to regulate and supervise the residential appraisal business. The Federal Valuation Agency, an independent bureau within the executive branch, would replace the Appraisal Foundation as chief, cook and bottle washer.

What set Waters off this time — she becomes angry a lot — was an absolutely shameful email an appraiser sent to Elizabeth Korver-Glenn, an assistant professor of sociology at the University of New Mexico and someone Waters calls one of the country’s foremost experts on bias and discrimination in the housing appraisal industry.

Here’s what Dave LaVigne of Lavigne Appraisals in New Bern, N.C. wrote, verbatim:

“Who the hell are you, to inject such racism. Your sociology background well simply is flawed. You should get out of the office and work with an appraiser and see the impact of social groups, but more importantly, federal law, which makes poor minorities poorer. It’s called lower-income housing or LIHTEC, and only the wealthy democrats own these. They are an annuity right from the US Treasury into the Democrat pockets. Hence the millions of refugees in the system.

“Appraisers are being turned in nationally because of so called race. The trend of course will be to refuse the assignment. While the document I read suggest racism was the underlying cause of the values being low in minority areas, I would suggest its factual data that reflects values are simply low, as investors are fewer. As the cry wolf extreme for lending and appraisals ramps up, appraisers and lendings will simply run from these loans not wanting any conflict. To suggest the loan is biased and the appraiser is racist to simple. But I have come to expect why someone with your credentials would dare to suggest they have a clue about what trained and educated people as myself actually do.

“With your education, this is the best you could do. I would suggest you are a flunky and our country is racing to the bottom with people like yourself not capable of doing the work. Racism is not as prevalent as you might think. I’m [age redacted] and I live in the house I grew up in. The street has hardly changed even when you get to the poor black neighborhoods. The point is, not much has changed, and these neighborhoods are socially adapted based on social behavior people are attracted to.

“Come to North Carolina. I will pay for your ticket, and I will walk your through your sociology degree and then ask you what you see after spending a week with me in the heart of the deep south where minorities are paid to raise their poorly educated kids illigitamant kids. Let’s not forget the parents gave the kids absurd names that most employers immediately refuse to call.”

I cleaned up a few of the spelling and grammatical errors, save for “illigitamant.” It’s spelled illegitimate. The mistake can be blamed on fat fingers; that’s what I do. Nevertheless, bigotry like this reflects on your entire industry. And the various professional appraisal groups agree.

In a letter denouncing LaVigne’s message, the American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, Appraisal Institute, International Association of Assessing Officers, Association for Valuation Professionals and the National Society of Real Estate Appraisers said they, “condemn the thoughts, language and tone of this email in the strongest possible terms.”

“There is no place in our society for the kind of race-based vitriol expressed in this email, but these views are especially troubling coming from an appraiser,” the groups said. “Appraisers are duty-bound to remain objective and unbiased in all aspects of their work and holding these views in any manner is antithetical to the very concept of appraisal practice.

“We wish to reiterate our commitment to working on the issues of bias and discrimination in a constructive manner, with respect for all views and participants in the conversation.”

Meanwhile, in late March, the Interagency Task Force on Property Appraisal and Valuation Equity assembled by President Biden to end racial bias in the lending and appraisal process put forth its own action plan. Parts of the plan involves steps that can be taken using existing authority, but the rest requires further action. Taken together, though, it represents “the most wide-ranging set of reforms ever put forward to advance equity in the home appraisal process.”

The plan (www.PAVE.hud.gov) came together after discussions with more than 150 stakeholder groups, including appraisers, appraisal management companies, lenders, civil rights and advocacy groups, academic institutions, philanthropy organizations and individuals who have experienced instances of appraisal bias to listen and learn diverse perspectives on what is working and how the Federal government can work to embed equity in the home valuation process.

With 13 cabinet-level departments and federal agencies signed on, the task force has some beef.

* Moving on, the piece I wrote about criminals (October 2021) who ply their trade in the housing sector was very highly read. And the crooks just keep on giving. Here’s a few of their latest gambits:

An ex-Miami real estate agent, formerly of Century 21, has been charged with the murders of two homeless men last fall and the attempted killing of a third in December. He was captured on camera throughout several stages of the slayings, including shooting one man, then another. He was driving a car registered in his name. “We literally followed the suspect’s footsteps,” Assistant Police Chief Armando Aguilar told the Miami Herald …

Tamara Dadyan, a Los Angeles realty broker, has been sentenced to more than 10 years in prison after pleading guilty to her role in defrauding the Payment Protection Program, the relief program for small businesses, to the tune of almost $20 million. Dadyan and her compatriots used dozens of fake or stolen identities to apply for the loans, including those of the elderly or dead. And they used the proceeds to buy luxury homes, designer handbags, clothing and even a Harley. Now, while sitting behind bars, she’s awaiting trial on state mortgage fraud charges …

A disbarred Massachusetts attorney and his wife have pleaded guilty to running multiple mortgage fraud schemes. In one ruse, Barry Wayne Plunkett Jr. and his wife, Nancy, both of Barnstable, defrauded six lenders and 14 refinancing homeowners and kept $900,000 for their own purposes. They also used various names, entities and false documents to obtain three successive mortgages on their own home in Hyannis Port in amounts of $412,000, $470,000 and $1.2 million …

Pastor Brandon Huber, a part-time agent with Windermere Real Estate in Missoula, Montana, yanked his congregation’s support of the local food assistance program because it promoted Pride Week and LGBTQ+ rights. Someone filed an ethics complaint with the Missoula Organization of Realtors, citing a violation of the Nation Association of Realtors’ Code of Ethics. And Huber has sued MOR right back.

Not a crime, per se, but the pastor’s lawyer said this: “The Realtors’ hate-speech rule is intended to purge Christians from the real estate business. If you are a Christian who believes the way that tens of millions of American Christians do, that homosexuality is wrong, there is simply no way that you can participate as a Realtor, with the kind of hate-speech prohibition that exists.”

This dude should move to Florida...

Maybe he had nothing else to do. John MacMillan Cameron, a Port Orchard, Washington, broker whose license is currently inactive, has pleaded not guilty to federal charges related to the Jan. 6, 2021, Capitol insurrection. Seems he posted on his website this message to believers: “The least safe I felt was when walking back to catch a train … I was told to FU by a little antifa BLMer on a Vespa who was traveling the opposite direction …”

Thank you Zillow for helping build a case against former Green Beret and one-time Florida congressional candidate Jeremy Brown for attacking the Capitol on Jan. 6, 2021. Brown had already been on the FBI’s radar as a potential leader of the Oath Keepers. But to prove their case, the authorities zeroed in on his Tampa residence’s listing on the popular search engine. A listing photo showed a whiteboard mentioning all kinds of lists allegedly related to the riot.

FBI agents raided the house, where they discovered a short-barrel rifle, a sawed-off shotgun, more than 8,000 rounds of ammunition and two hand grenades …

* I warned about inflation, the mortgage market equivalent of a four-letter word, last July. Like an economist, which I am definitely not, I could have been either wrong or right. Turns out, I was the latter.

In mid-March, the Federal Reserve Board made the first of what is likely to be many quarter-point-or-more increases this year in the Fed Funds Rate. With inflation nearing 8% as of this writing, the chief economist at the Mortgage Bankers Association, Mike Fratantoni, said of the widely anticipated initial 25-basis-point increase: “This is what the Fed needs to do to bring inflation under control.”

Fed Chairman Jerome Powell said in prepared remarks to the National Association for Business Economics that “inflation is much too high.” And for what it’s worth, the central bank does not expect inflation to drop below 2% again until “after 2024” at the earliest …

* When last I looked at the Latino market (June 2021), I reported that most of Hispanics’ wealth comes from real estate. Now, the latest State of Hispanic Home Ownership report, released in early March, shows that Latinos added 657,000 owner-households between 2019 and 2021, boosting their ownership rate to 48.4%.

That’s still on the low side compared to other demographics. Worse, it accounted for just 20.6% of the growth in total ownership over the two-year period.

At the same time, though, “substantially” more Hispanics are looking to buy their first home than the population at large, according to a survey by Realtor.com in conjunction with the National Association of Hispanic Real Estate Professionals. NAHREP also produces the State of Hispanic Home Ownership report.

* Last month’s piece was about the influx of institutional investors into the housing market. Since then, I found these stats buried in an ATTOM Data report: Institutional investors nationwide accounted for 6.9%, or one of every 14 single-family home and condo sales in 2021, the highest level since 2013.

Meanwhile, the trend is growing among investors to build as well as buy houses to rent. According to the National Rental Home Council, houses purposely built for rent rather than for sale accounted for 26% of the properties added to the portfolios of investors in the fourth quarter. That’s up from just 3% in the third quarter of 2019. At the same time, investor purchases of existing individual houses declined from 81% to 57% over the same two-year period.

“Providers increasingly turned to the development of new housing over the past two years as a means of responding to housing market supply constraints and a corresponding surge in demand for single-family rental housing,” the trade group said in a press release …

* A Naples, Florida, property management outfit being sued for embezzlement by several of its homeowner association clients could also come into Uncle Sam’s cross hairs for taking nearly a quarter-million dollars in federal COVID relief funds. When American Property Management Services applied for PPP money, the application required certification that it was not “engaged in any activity that is illegal under federal, state or local law.” According to some legal beagles, the feds can prosecute, even if the company was not involved in criminal activities when it applied for a PPP loan …

That’s all for now. My wastebasket is full.