1150 Seventeenth Street, NW, Washington, DC 20036
(Two blocks from Farragut North Metro)
Post Event Summary
The housing market remains a drag on the U.S. economy, and according to panelists at an event cosponsored by AEI and the Collateral Risk Network on Wednesday and Thursday, current appraisal practices are part of the problem.
Several panelists highlighted the issues with the current system. Stephen Oliner of AEI presented data indicating that land values are the most volatile element of the housing bubble cycle. Ed Pinto of AEI outlined government policies that forced the abandonment of fundamental lending principles, which would warn of an impending housing boom. Others argued that Fannie Mae appraisal forms are outdated and are preventing appraisers from performing effective analysis.
A wealth of specific -- and often, emphatic -- calls for reforms that would address these issues emerged from the conference. Morris Davis of the Wisconsin School of Business demanded access to the data warehouses at Fannie Mae and Freddie Mac to enable more accurate appraisals and eliminate duplication of efforts. Jordan Petkovski of Quicken Loans stressed that appraisers are frustrated with all talk and no action and emphasized the need for cooperation between mortgage lenders and policymakers to move forward.
Michael Sklarz of Collateral Analytics focused on how appraisers can use data to more accurately select comparable properties at a neighborhood level instead of looking at aggregate prices across a wide area. Representatives from the appraisal industry noted that the industry needs to universally accept a broad range of values, produce a confidence score for data and create a national repository of real property data.
Other experts suggested that the American housing sector could learn from Germany, which has kept its housing market stable by creating an industry of highly qualified appraisers and instituting a culture based on credit. Pat Sheehy of Chase Home Mortgage concluded the conference by stressing that the entire housing industry must collaborate to restore confidence and stability in the housing market.
Financial housing market stakeholders agreed that the ideas shared during the conference need to be fashioned into a detailed implementation plan for the housing industry to regain market confidence.
What role have appraisers played in the U.S. housing crisis? Appraisers didn’t directly cause values to decline, nor did they lead homeowners to stop paying their mortgages. However, as we examine the housing boom and bust, it is clear that the appraisal process failed to distinguish between housing prices and values.
Determining the price at which a property may be sold or refinanced is quite different than providing a value analysis that helps lenders determine the maximum amount that may be prudently lent on a property. This conference will bring together researchers, appraisers, lenders, investors, analysts, regulators, rating agencies, trade groups and policymakers to discuss best practices that are consistent with sustainable market values.
All presentations are at the bottom of this page.
Edward J. Pinto, AEI
Joan Trice, Collateral Risk Network
Panel I: The Historical Perspective — Booms, Bubbles and Busts
Stephen Oliner, AEI
David Crowe, National Association of Home Builders
Robert Dorsey, FNC Inc.
Panel II: Definition of Value — Market Value and Stabilized Values
Stefan Hilts, Fitch Ratings
Jacquie Doty, CoreLogic
Wolfgang Kälberer, Association of German Pfandbrief Banks
Reiner Lux, HypZert
Buffet Lunch — Housing Finance and the Importance of Fundamentals
Edward J. Pinto, AEI
Panel III: Approaches to Value — Construction Costs, Land Value and Rents
Morris Davis, Wisconsin School of Business at the University of Wisconsin-Madison
Svenja Gudell, Zillow
Scott Andrew, Marshall and Swift
Sean Campbell, Federal Reserve Board
Alan Hummel, Forsythe Appraisal
Panel IV: Approaches to Value — Sales Comparison Approach
Michael Sklarz, Collateral Analytics
John Brenan, Appraisal Foundation
Rick Langdon, Wells Fargo
Mark Linné, Bradford Technologies
Thursday, August 9:
Recap from Day 1
Edward J. Pinto, AEI
Joan Trice, CRN
Panel V: Collateral Risk
James Gaines, Real Estate Center at Texas A&M University
Charles Mureddu, Quality Valuation Services
Bill Rayburn, FNC
Panel VI: Reengineering Plan
Penny Reed, Wells Fargo Home Mortgage
Chad Davis, U.S. Senate Banking, Housing and Urban Affairs Committee
Liz Green, Rel-e-vant Solutions
Jordan Petkovski, Quicken Loans
Pat Sheehy, Chase Home Mortgage
For more information, please contact Emily Rapp at Emily.Rapp@aei.org, 202.419.5212.
For media inquiries, please contact Véronique Rodman at email@example.com, 202.862.4871.
Scott Andrew serves as a property valuation industry and government liaison for Marshall & Swift/Boeckh. In this role, Andrew regularly educates on and advocates for issues surrounding construction costs and the role they play in property appraisal, lending, collateral valuation and hazard insurance. Andrew is an active participant in appraisal and valuation associations and frequently meets with lawmakers and regulators to advance discussions on property valuation. Previously, Andrew spent six years leading a service professional team that managed relationships with America’s largest property insurers.
John Brenan has been the director of appraisal issues at The Appraisal Foundation since October 2003. He serves as the foundation’s senior staff contact for the Appraisal Practices Board, the Appraisal Standards Board and the Appraiser Qualifications Board, as well as its advisory councils: The Appraisal Foundation Advisory Council, the Industry Advisory Council and the International Valuation Council. He also manages the support staff for the foundation’s boards. Previously, Brenan spent over eight years as the chief of licensing and enforcement for the California Office of Real Estate Appraisers (OREA), where he administered the largest real estate appraiser licensing program in the U.S. and issued licenses to applicants that met federal and state requirements. Brenan was also responsible for managing California’s enforcement program; for educating and disciplining licensees who violated laws, regulations and Uniform Standards of Professional Appraisal Practice and for working with local, state and federal law enforcement agencies on fraud cases. Before joining OREA in February 1995, he worked as both a staff and fee appraiser for several large financial institutions, appraising residential and non-residential real estate for a wide variety of property types.
Sean Campbell is a deputy associate director in the Division of Research and Statistics at the U.S. Federal Reserve Board, where he has served as an economist since 2004. Before joining the Fed, Campbell was on the faculty at Brown University’s Department of Economics. His research focuses on the intersection of finance and macroeconomics and on the economics of housing markets. Campbell's research has been published in a number of peer reviewed academic journals, including the Journal of Financial and Quantitative Analysis, the Journal of Business and Economic Statistics, the Journal of Monetary Economics and the Journal of the American Statistical Association.
David Crowe is the chief economist and senior vice president at the National Association of Home Builders (NAHB), where he is responsible for NAHB’s housing and economic trends forecast, its survey research on the home building industry, its consumer preferences and its microeconomic analysis of housing-related government policies. Previously, he served as NAHB’s senior vice president for regulatory and housing policy. Today, Crowe also manages the development and implementation of an innovative model for predicting the local economic impact and fiscal cost of new home construction, which has already been applied to over 500 local markets. His past research has concentrated on home ownership trends, tax issues, demographics, government mortgage insurance, local land use ordinance impacts and the impacts of housing on local economies. Before joining NAHB, Crowe was the deputy director of the Division of Housing and Demographic Analysis at the U.S. Department of Housing and Urban Development (HUD). He has also served on federal advisory committees for the U.S. Census Bureau and HUD.
Chad Davis is a professional staff member in the U.S. Senate Committee on Banking, Housing, and Urban Affairs, where he specializes in housing and mortgage finance. Davis has served as a lead policy staff member to the committee’s Republican members, including Ranking Member Richard Shelby (R-Ala.), since 2009. Previously, he served as a legislative assistant to Sen. Richard Shelby (R-Ala.), concentrating on economic issues, and to former Rep. E. Clay Shaw Jr. (R-Fla.), where he handled tax and trade portfolios for the former senior U.S. House Ways and Means committee member. Davis began his professional career with the National Retail Federation as the director of government relations.
Morris Davis is the academic director of the James A. Graaskamp Center for Real Estate. Since 2006, he has served as an associate professor in the Department of Real Estate and Urban Land Economics at the School of Business at the University of Wisconsin-Madison. Davis is a member of the Federal Reserve Bank of Chicago’s Academic Advisory Council, a fellow of the Lincoln Institute of Land Policy and an independent director of both the American Capital Agency Corporation and the American Capital Mortgage Investment Corporation, two publicly traded mortgage real estate investment trusts. Previously, Davis was an economist at the U.S. Federal Reserve Board. Davis’s widely published research and publications focus on U.S. housing markets and developing price indexes for land in residential use. He is also a frequent lecturer at universities and central banks worldwide.
Robert Dorsey is a co-founder of FNC — a mortgage technology company — and, since 2007, has served as its chief data and analytics officer. Previously, Dorsey was FNC’s chief operating officer and had been a member of the University of Mississippi’s economics faculty. He has published more than 30 articles in professional journals and is a co-author of a book on corporate financial forecasting. His most recent publication in the Journal of Housing Economics discusses the FNC housing price index’s derivation. His academic research centers on experimental economics and the econometrics of non-linear optimization. Before his career in economics, he worked as a risk manager, an engineer and a physicist.
Jacquie Doty is the vice president and product line manager at CoreLogic, where she handles the company’s strategic planning, research and development, collateral risk management services and automated valuation models and their cascades. Doty formerly served as the collateral risk management director for Freddie Mac, where she oversaw residential real property valuation, directed policy development, implemented risk management plans and worked with customers, government agencies, regulators, trade organizations and the media. During her time at Freddie Mac, she had also served as the offerings management director and product manager. Beforehand, Doty was the vice president of consumer lending for Mellon Bank, managing consumer loan and mortgage originations including home equity line of credit portfolio growth, cross-selling strategies and loss mitigation activities. Earlier in her career, Doty held a series of positions with Wells Fargo Credit Corporation, Manufacturer’s Hanover Credit Corporation and Equifax.
James Gaines is a research economist for the Real Estate Center at Texas A&M University, focusing on housing and land development. Gaines has more than 35 years of experience, primarily in real estate research and education, urban economics, land use analysis and development and project risk assessment. Gaines has provided real estate consulting services to numerous businesses, financial institutions, developers and government organizations. Before his private consulting career, Gaines served as the president of Rice Center, an urban research center affiliated with Rice University, and was an associate professor of real estate and finance at the University of South Carolina.
Liz Green, a strategist, speaker, educator, blogger and advocate, is the principal consultant for Rel-e-vant Solutions, a real estate technology consulting firm where as an expert business analyst in the mortgage and valuation industries, she assists developers and business users by optimizing legacy systems and leveraging digital intelligence to develop new products and solutions. She has over 25 years of experience in U.S. residential finance technology, having served in a number of product development leadership roles that include software solution design, data analysis, property valuation software development and project management, loan origination, loan servicing and secondary marketing. Green has also been a driving force in several software and services startups and industry-level initiatives. She is the current chair of the Mortgage Industry Standards Maintenance Organization’s Property & Valuation Services Workgroup.
Svenja Gudell joined Zillow’s industry-leading economics and analytics group as a senior economist in 2011. In this capacity, Gudell produces real estate data (including home value forecasts) and undertakes econometric analyses of more than 160 markets, including foreclosures, negative equity and price-to-rent ratios. Before joining Zillow, Gudell worked for Analysis Group in Boston and for the Federal Reserve Bank of New York’s International Research Group as an assistant economist.
Stefan Hilts is a director in the residential mortgage group at Fitch Ratings, where he has worked for six years. At Fitch, Stefan is responsible for modeling and criteria development and specializes in Big Data analytics. His latest research has focused on boom and bust cycles and the drivers of sustainable home prices.
Alan Hummel is the senior vice president and chief appraiser for Forsythe Appraisals LLC. As a key member of the executive management team, Hummel manages the development and implementation of appraiser training programs and quality control initiatives at 39 branches nationwide. He is also a primary industry resource to both clients and appraisers for a range of real estate needs. For 30 years, Hummel has provided appraisal and consulting services for mortgage lending, litigation support and regulatory compliance activities to a diverse clientele. He has also served as the Appraisal Institute’s national president and on The Appraisal Foundation’s board of trustees. He has testified before both the U.S. Senate and the U.S. House of Representatives on mortgage fraud and appraisal issues and, as a published curriculum author, frequently presents on appraisal techniques. As an Appraisal Qualifications Board-certified uniform standards of professional appraisal practice instructor, Hummel teaches at several professional societies.
Wolfgang Kälberer is the head of European Union (EU) affairs at the Association of German Pfandbrief Banks (vdp), representing the interests of these 40 banks when dealing with the European Commission, the European Parliament and EU member states. Beginning in 1996, he also served as the head of vdp’s Brussels office. Today, Kälberer is a member of the European Covered Bond Council, created in 2004, and a member of several working committees in the European Mortgage Federation (EMF). He also chairs EMF’s Economic Affairs Committee, which is in charge of the EU capital requirements directive. Kälberer has been a vdp delegate to The European Group of Valuers’ Associations (TEGoVA) since 1996, a TEGoVA board member since 2005 and a member of TEGoVA’s European Valuation Standards Board since 2012. From 1988 until 1995, he was responsible for the European cross-border mortgage business for the International Mortgage Department at Bayerische Vereinsbank in Munich, Germany.
Rick Langdon, the chief staff appraiser for Wells Fargo Bank, has 30 years of experience in the appraisal industry. He began his 25-year career at Wells Fargo as a staff appraiser and now oversees the bank’s production, service and appraisal quality. As the Wells Fargo national appraisal training manager, he has also trained countless appraisers nationwide and has been instrumental in the development of numerous educational courses. Langdon is a general certified appraiser and has practiced in Colorado, California, Florida and Texas.
Mark Linné, the chief strategic and valuation officer for AppraisalWorld Inc., has been a leader in the design, deployment and adoption of interactive valuation technologies for more than a decade. Among his many occupations, he is an author, editor, speaker, columnist, inventor, data standards proponent, software developer and veteran appraiser. As an automated value models expert, he has testified for large lenders and stakeholders in complex litigation issues, as well as consulted congressional members, including Sen. Christopher Dodd (D-Conn.), former chairman of the U.S. Senate Banking Committee, in an advisory role that focused on implementing advanced technology. Linné is the co-author of three books for the Appraisal Institute: “A Guide to Appraisal Valuation Modeling,” “Practical Applications in Appraisal Valuation Modeling” and “Visual Valuation: Implementing Valuation Modeling and Geographic Information Solutions” as well as a book for the International Association of Assessing Officers entitled “Property Assessment Valuation.” He is also an architect of the Collateral Valuation Report and the education and training program that supports the application.
Reiner Lux has since 2006 been the CEO of HypZert GmbH, a subsidiary of the Association of German Pfandbrief Banks (vdp) and other leading German banking associations. HypZert is responsible for certifying appraisers for mortgage lending value competency, and, to date, has done so for approximately 1,200 valuers. Lux is also the CEO of vdpResearch GmbH, which is constructing a transaction data bank for Germany — something never before accomplished due to strict data protection laws. Because of vdpResearch, more than 700,000 records are in the data bank, facilitating analysis. vdpResearch also provides additional information to the institutions that deliver the data such as price comparisons by city or property type and national evaluations.
Charles Mureddu is a managing director of quality valuation services with more than 30 years of mortgage lending experience in appraisal management, institutional risk, loss mitigation, whole loan exit and securitization strategies. He is also a general associate member of the Appraisal Institute and a certified general appraiser in Rhode Island, Massachusetts and Connecticut. For the last 17 years, Mureddu has held senior level positions as the director of valuation risk and chief appraiser for Net Bank, Resource Bancshares, Bfirst Residential and Fleet Mortgage Company. He also owned and operated Alden Appraisal Group Inc., specializing in commercial and litigation appraisals and large estate homes, such as Newport’s Belcourt Castle. He has been an expert witness for various zoning boards and U.S. district and bankruptcy courts, as well as a subject matter expert for the Appraisal Qualifications Board, where he helped develop the National Certified General Appraiser exam. Mureddu is featured in several industry publications regarding secondary market expectations, fraud and the leverage of automated collateral technology.
Stephen Oliner is an economist who joined AEI after a more than 25-year career at the Federal Reserve Board. He has held a number of high-level positions at the Fed, most recently as a senior adviser in the Division of Research and Statistics. He was actively involved in the Fed's analysis of the U.S. economy and financial markets, and his research spanned a wide range of topics, including monetary policy, business capital spending, productivity growth, commercial real estate and the measurement of capital. Concurrent to his position at AEI, Oliner is a visiting scholar at the University of California, Los Angeles’s Ziman Center for Real Estate. He also maintains an economic consulting practice.
Jordan Petkovski has worked in and around the residential appraisal industry for most of his career, holding numerous leadership roles for appraisal and settlement services providers nationwide. Currently, he is the director of staff appraisal operations at TSI Appraisal Services, a subsidiary of Title Source, where he concentrates on developing operational processes based on a thorough understanding of the industry as a whole. His responsibilities include developing and managing staff-level appraisers that operate nationwide.
Edward J. Pinto served as an executive vice president and chief credit officer for Fannie Mae until the late 1980s, and has done groundbreaking research on the role of government housing policies in the lead-up to the financial crisis. In particular, his data have revealed striking facts about the contributions of housing policy to the mortgage crisis. Two of his major research papers have been submitted to the Financial Crisis Inquiry Commission: "Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study" and "Triggers of the Financial Crisis." At AEI, Pinto is continuing his work on the role housing policies played in the financial crisis and researching policy considerations and options for rebuilding our housing finance sector.
Bill Rayburn has served as the chairman and CEO of FNC since its founding. Initially, he was responsible for fundraising and establishing the banking relationships necessary for FNC’s success. In recent years, he has focused on leading the company’s organic revenue growth through strategic planning and the introduction of new marketplace solutions. Currently, his efforts are aimed at strengthening processes that maintain high-quality client service and growing and developing FNC’s management team. Before co-founding FNC, Rayburn co-founded two other successful ventures — a residential real estate development company and a seminar and training company. For 12 years, he also served on the finance faculty at the University of Mississippi, where he taught graduate courses on financial institutions and real estate investment analysis.
Penny Reed is the vice president of strategic partner management at Wells Fargo Home Mortgage. A 29-year veteran of the mortgage industry, Reed has been with Wells Fargo for 23 years in various capacities, including underwriting, credit risk management, capital markets and agency relations. Currently, Reed leads the Strategic Partner Management Group’s external outreach and financial reform activities. In addition to her mortgage industry career, Reed has served in the U.S. Army Reserves.
Pat Sheehy is the executive vice president and head of mortgage industry relations mortgage banking at Chase, one of the largest U.S. providers of banking, lending, treasury, wealth management and investment services. As head of mortgage industry relations, Sheehy manages Chase’s relationship with banking, real estate and housing trade associations, as well as with state housing agencies and hardest-hit funds. His work is critical for Chase’s mortgage banking business, which originates more than $155 billion in home loans annually. He also serves on Chase’s executive committee for consumer businesses and its mortgage banking executive committee. Sheehy, with 29 years of mortgage banking experience, has held senior management production positions at Wells Fargo Home Loans, Freddie Mac, General Electric Mortgage Insurance, Countrywide and Molton and Allen & Williams Mortgage Company.
Michael Sklarz is the president of Collateral Analytics, a Honolulu-based company that produces automatic valuation models, home price indexes and forecasts and real estate and mortgage market analytics. Sklarz has more than 25 years of professional experience in real estate research, analysis and technology product development in the U.S. and global real estate markets. Previously, Sklarz was the head of analytics at Fidelity National Financial and a chief valuation officer for Fidelity National Information Solutions. He has also been the director of research at Prudential Locations Inc., where he helped pioneer the development of new analytic tools and databases to track and forecast the Hawaii and U.S. real estate markets. He is a fellow at the Homer Hoyt Institute.
Joan Trice is the editor and publisher of Appraisal Buzz, an email publication circulated to 72,000 subscribers. Trice also hosts Allterra Group’s annual Valuation Expo, the largest conference for the valuation community, as well as the quarterly Collateral Risk Network, whose membership — comprised of lenders, government agencies, Wall Street economists, vendor management companies and appraisers — currently stands at 290. Trice, an early adopter of Internet business strategies, has sold a web-based valuation business to LandAmerica and has run one of the Mid-Atlantic’s largest appraisal firms, Trice Appraisal Inc., which she founded and owns with her brother. To comply with interagency guidelines and the Dodd Frank Act, she recently formed Clearbox LLC, which maintains an appraiser credentialing database and aggregates background checks and disciplinary actions.
Morris Davis Presentation
Joan Trice Recap Presentation
Patrick Sheehy Presentation
Penny Reed Presentation
Scott Andrew Presentation
Liz Green Presentation
John Brenan Presentation
Joan Trice Presentation
Jacquie Doty Presentation
Svenja Gudell Presentation
David Crowe Presentation
Charles Mureddu Presentation
Robert Dorsey Presentation
Stefan Hilts Presentation
James Gaines Presentation
Stephen Oliner Presentation
Michael Sklarz Presentation
Kälberer and Lux Presentation