#MeToo And Testing Fraud Applies To Appraisal Industry’s Largest Trade Group

May 8, 2025
  • Appraisal Institute Is The Perfect Comp For NAR’s Bad Behavior
  • Former Appraisal Institute President Files Lawsuit Over Her Termination
  • Missing Ethics In The Appraisal Industry’s Largest Trade Organization

A while back, I wrote that the Appraisal Institute (AI) was the perfect comp for NAR’s bad behavior. Today’s blockbuster New York Times story Appraisal Trade Group Accused of Covering Up Sexual Harassment and Test Flaws (gift link), shows how right I was about the organization’s lack of ethics. This was just illustrated by AI leadership in March with litigation over the cover-up of incorrect exam testing scores. I’ve been writing about AI’s self-dealing for about eight years here on Housing Notes and have been personally threatened and smeared by those in the cult. I have painstakingly documented how AI ignores its residential membership, and how its leadership takes pointless first-class flights to Europe and China on the dime of the hard-working membership. I should point out I am not a member but deeply care about the damage AI inflicts upon the industry I love. In addition to this new evidence of bad behavior, the industry’s largest trade group has fewer members than they claim (after removing all the non-paying deceased members) and seems to be quickly running out of money. An audit would confirm this, especially a forensic audit, but AI steadfastly refuses to permit anything other than a ‘sure, that’s the ticket!’ review of their financial dealings.

However, regarding the matter at hand, there are many female victims of unchecked behavior in their leadership. What a tragedy for the victims and the entire industry. Expect annual membership dues to rise sharply as membership falls more quickly. No disrespect meant to their hard-working membership, but does having an MAI or SRA designation tangibly mean anything now?

Will The Brand-Damaging Behavior Of The Appraisal Institute Impact Homebuyers?

The reality is that the Appraisal Institute has long abandoned its residential designated SRA membership, partly due to the introduction of appraiser licensing and certification in 1991. It’s been a long downward slope. I believe the consumer doesn’t appreciate or understand what an SRA designation represents. The lending industry has already shifted to a commoditization of appraisal services for lending purposes through appraisal management companies (AMCs) with zero emphasis on quality – fast and cheap are all that matter now. Many mortgages either don’t have an appraisal or the value is based on an automated valuation model (AVM) (think Zestimate). The collapse in credibility of my industry’s valuations will eventually lead to higher mortgage rates.

The world of credit and the bond market will be the judge and jury of the reduction of the integrity of the appraisal industry. The credibility of the appraisal profession will come into question with this testing scandal and the lack of ethics shown in the #MeToo scandal. 

Ramifications Of This Scandal To Appraisal Institute Membership

Membership of the Appraisal Institute has a number of designations, with the two primary types being the MAI designation (commercial) and the SRA designation (residential). Members have spent a lot of time and money earning those designations, hoping it provides them with better credibility in the marketplace. One of the responsibilities of the Appraisal Institute is to maintain the branding of those designations, including by marketing them and maintaining ethical behavior. They haven’t done that, so the SRA designation means very little at this point. The MAI designation value has steadily dropped in the marketplace, per my colleagues who have it. AI’s bad behavior and financial irresponsibility are the reason membership is less than half of what it was during the housing bubble.

Here’s recently ousted Appraisal Institute CEO Cindy Chance talking about why she was fired after she began to question what the organization was doing. Wow! Here are some good reads on her website as well. She’s a star!

UPDATE – here’s Cindy’s lawsuit (taken from public record)

Today, somebody started a petition for Craig Steinley’s removal from the executive board at Change.org. 

The irony here is that Current President Paula K. Konikoff and Immediate Past President Sandra K. Adomatis, quoted in the article, who got into their positions through their well chronicled sham petition process that bypasses the wishes of the membership, represent the “old boys” network at AI. Yet, ironically, the NYT piece today makes me have sympathy for them on the #MeToo behavior they must have endured.

AI’s Fraudulent Test Scoring Ramifications

By now, it is widely known that the Appraisal Institute has been covering up its mistakes in test scoring, calling into question whether some certified appraisers should be certified at all. In other words, the Appraisal Institute is tacitly endorsing unqualified people to be appraisers, by telling states that they passed when they failed.  How are they choosing whose results they falsify? Do they realize that they are also failing qualified people and possibly driving them away from the profession?  What kind of idiots try to ruin their future by limiting new talent? They aren’t just defrauding the people who allegedly failed exams. They are defrauding the clients of the Appraisal Institute – the banks, the attorneys, the secondary market, the homeowners, etc. They’ve decided who to place in charge of valuing assets in the US, qualifications be damned.  

Final Thoughts

What was in it for the Appraisal Institute?  Their behavior has been so suspicious and secretive for the past 15-20 years that one can only believe that there is someone who is enriching themselves, feeding at this trough. No one can be that stupid, killing off their future and tricking their client base, both the appraisers and the end users of appraisals. Or maybe they can be that stupid. Incidentally, AI recently proposed to stop having quarterly board meetings.

Is the Appraisal Institute ethically bankrupt or terminally stupid?

The Actual Final Thought – This all reminds of Mountain Dew conspiracy theories.

Here’s My (Fairly) New Podcast

Episode 3 is out! Here are some feeds for “What It Means with Jonathan Miller (WIM)” My next episode comes out on Monday.

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Image: taken by Jonathan Miller at Laurie Anderson exhibit at Smithsonian in DC.

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