Marcos my man, the actual figure appears to be way more than 25%.
But the statement needs clarification. Housing over pricing is attributable to fraud, which is made possible by excessive regulation. There is no honest price discovery anymore. I posted a link in the other comment on this thread with many appraiser hand written articles detailing a side of the industry you won’t hear about on syndicated or corporate media.
What was interesting about the guy whom put forth that data analysis. He is not an appraiser and completely missed the mark, failed to incorporate the removal of the full service real estate appraiser as a catalyst which facilitated all the fraud and housing bubble he’s writing about. He knows a lot about what he’s writing about but does not understand the importance of the independent real estate appraiser in those processes.
However this provides a unique data tie in. At every jump point in the statistical data indicating a rise in fraud, those dates also correlate with GSE and FED policy decisions which incrementally sidelined or diminished the full service appraisers participation in the process.
Basically a group of predatory interests known as appraisal management companies or amc’s, captured the majority share of work upstream of the actual licensed appraisers doing the work. They have raked what appears to be over 12 billion dollars in junk fee’s from mortgage lending consumers, and have sidelined or blacklisted over half of all the industries existing real estate appraisers. More than three out of four currently licensed appraisers today boycott the amc industry outright as a result.
Next time you or any of your family or community gets a mortgage loan. Don’t be suprised if an unlicensed third party pdc or property data collector shows up to do your ‘inspection’. Or that you won’t even get an appraisal and your loan will be rubber stamped approved via the recently passed ‘avm final rule’. You won’t know if you’re instantly underwater or over leveraged until such time as you may try or need out of unexpected circumstance to actually list and sell your home at a later date. And you’ll have your entire personal spaces of your home LIDAR scanned with advanced mobile tech devices FNMA is requiring appraisers to use with their new forms. That data will be shared with multitudes of third party data brokerage companies around the world. So much for GLB privacy protections. Or as I like to say on the appraisers blogs; Hide your gun and your pipe if anyone comes into your home with that technology. Privacy in mortgage lending? You have none. Courtesy of the GSE’s ‘appraisal modernization’ program. Is their AVM systems reliable and honest? You don’t get to know, you’ll just have to trust them. There is no independent oversight or third party review or validation of the lenders avm black box avm systems. They will simply fill out a few page form every few years verifying the avm systems are unbiased and honest, and that’s it. That’s the substitute for a hundred thousand appraisers around this country providing independent checks and balances in mortgage lending. We’re gone, the avm is in. You’ll just have to trust them.
The ‘avm final rule’. Nobody is looking at this. They’re so deceptive and the thing is on auto pilot. Half of the government information sources that provide links to the ‘avm final rule’, are only linking to the open commentary and are not actually showing the actual final rule. You can only find that in the federal register.
https://www.federalregister.gov/documents/2024/08/07/2024-16197/quality-control-standards-for-automated-valuation-models
Here is the best part.
The ‘nondiscrimination quality control factor’. That means value output will be varied depending on the persons race. Something it would be illegal for a licensed appraiser to do. It’s institutionalized discrimination via automation. Social credit scoring in mortgage lending and loan handling. Everything DEI from the Biden’s PAVE task force on ‘valuation equity’. They rushed everything through right before the election and even though Pulte took over FHFA, nothing is being done. The DEI is baked into the lending process now via avm automation.
And you don’t get to know how or why or learn anything about the inner workings of avm systems. Lender participation in the program is going to be mandatory. One state tried to get information on these black box avm systems which have replaced most appraisers in the mortgage lending process. They were promptly told by the GSE twins to ‘drop dead’.
Another important piece written by an appraiser, to educate the public on what’s going on with GSE’s. Is anyone even listening anymore? I really hope that intelligent people on this website will take this data and run it up the ladder. The better half of the entire residential appraiser industry, what’s left of us anyways, about 70k head count and falling rapidly, we’re all relegated to whistleblower status but nobody is listening.
Our industry if given pro bono or qui tam representation has enough to bring legitimate class action suits. But because the industry is fragmented and the appraisal trade groups co opted and bought out by the amc industry and other stake holders such as lenders and investment and commercial interests, there are no funds to legally correct the system.
The Appraisal Sub Committee is supposed to provide oversight. They don’t. The OCC Comptroller, the ASC is supposed to answer to them. There is no oversight, they rubber stamp the yearly reports. The TAF Appraisal Foundation is too busy pandering to represent their own licensee interests. They gave appraiser industry funds money to the same lawyers whom took appraisers to court over fictitious accusations of ‘racist appraisers.’ The entire PAVE task force premise was appraisers can’t be trusted because there are too many white people in the industry. That was the justification for the AVM final rule. Brookings and the NFHA, along with the amc executives ran the entire show from behind the scenes and directed the appraisal trade group top peoples. They worked with non profit groups and had ‘tech equity hackathons’ specifically designed to develop ways to disproportionately apply valuation to housing in such a manner that it disregarded all market forces such as economy crime and education, what drives the very heart of price and value discovery in real property.
What’s the end result for consumers? Glad you asked; Debt traps for everyone. A permanently roiled housing market dominated by corporate and investor interests. Higher housing prices for everyone. Forever. And if anyone pulls too much equity, while treating their home like an atm, the FNMA ‘Wholesale lending’ program will be there to offer special terms to restructure the entire thing, so you can start your term all over or release the home to an institutional investor whom will buy it upstream of regular consumers at a firesale pricing, which they’ll prefer to hold as a REIT rather than selling back to American citizens.
