CNN's Top Story 8/19/22: Black couple says they "whitewashed" home and [appraised for a refi] value rose $300k

Context from September 2021, Freddie Mac: Racial and Ethnic Valuation Gaps In Home Purchase Appraisals (Please do not leave a comment like "racism isn't real, it's a myth!" or "there isn't enough data!" without at last skimming this -- the sample size is 12,000,000 [12 MILLION] appraisals for people looking to purchase homes...)

CNN's front-page TOP headline right now: Black couple sues after they say home valuation rises nearly $300,000 when shown by White colleague (CNN's top story is about refinance appraisals, not purchase appraisals, it should be noted)

Anything in [brackets] is my commentary, and [...] indicates I cut something out. Article begins...

**(CNN)**A Maryland couple has sued a local real estate appraiser and an online mortgage loan provider [loanDepot, whose stock has dropped from ~$30/share 18 months ago, to $1.66/share today, ballpark concurrent to this appraisal being done, they were in the news for other reasons --> https://nationalmortgageprofessional.com/news/loandepot-lawsuit-alleges-wide-scale-fraud ], alleging that the housing appraisal they received was unfairly low due to their race, in violation of the Fair Housing Act, after a second appraisal returned a result nearly $300,000 higher.

Nathan Connolly and Shani Mott filed suit against 20/20 Valuations LLC, its owner Shane Lanham, and loanDepot.com on Monday, alleging the defendants 20/20 Valuations LLC and its owner "discriminated against Plaintiffs by dramatically undervaluing their home in an appraisal because of Plaintiffs' race and their home's location adjacent to a Black census block, notwithstanding that it is also located within Homeland, an affluent, mostly white neighborhood," and loanDepot.com discriminated against them by relying on that appraisal in denying their refinance loan.

According to the complaint, Connolly and Mott are Black professors [of African American studies... whoops!] at Johns Hopkins University who applied to loanDepot.com to refinance the mortgage on their four-bedroom home in Homeland, Maryland, a predominantly White Baltimore neighborhood.

Lanham's company, 20/20 Valuations, performed the appraisal for loanDepot and returned a valuation that was more than $75,000 below the conservative estimate of valuation which loanDepot had given the couple, according to the lawsuit. LoanDepot denied the couple the mortgage refinance because of the low valuation, according to the complaint.

"Plaintiffs were shocked at the appraisal and recognized that the low valuation was because of racial discrimination. They told this to their loanDepot loan officer and challenged the appraisal in a detailed letter," the suit reads.

Gabriel Diaz, an attorney for the couple, told CNN the lawsuit represents his clients' point of view.

Connolly and Mott later re-applied with another lender, and "whitewashed" their home, according to the lawsuit. This included removing photos of their Black family from the home, and having a White colleague present the property to the appraiser. The suit claims this valuation came back at $750,000, more than a quarter of a million dollars higher than 20/20 Valuations' appraisal of $472,000.

According to the lawsuit, Lanham allegedly used an appraisal method where he compared the couple's home to properties in a majority-Black local area, instead of the rest of Homeland.

"Defendant Lanham's decision to geographically limit the area from which he selected comparable sales reflected his belief that, because of their race, Dr. Connolly and Dr. Mott did not belong in Homeland, an attractive and predominantly white neighborhood, and that a home with Black homeowners located adjacent to a predominantly Black area is worth less than if it were in the whiter areas that he deemed 'the heart' of Homeland," the lawsuit alleges.

[...]

The couple allege that Lanham's "dramatically lower valuation reflected his beliefs that a Black family did not genuinely belong in Homeland and could not be the owners of a higher valued home."

[...]

The couple's lawsuit is the latest example of the difficulties and discrimination some Black homeowners say they face.

Last year, a Black California couple filed a lawsuit in federal court in San Francisco, arguing that racial discrimination played a role in the low valuation of their home.

[...very similar anecdote follows...]

Homeownership is the primary contributor to multi-generational wealth building for Black and Brown households, according to research highlighted in a report from the National Association of Realtors (NARS).

[...]

Article ends.

--------------------------

Appraisers right about now are feeling about how cops in general felt, after the entirety of Uvalde PD paused for tea-time, and to play on their cell phones, in order to allow teachers and small children sufficient time to bleed out until dead. This is far from the first anecdote that went down like this -- Black family looking to refi (this is a refi appraisal recipe, this is not a purchase appraisal recipe) has a shit appraisal come back, has a white person stand-in for the re-do, and the 2nd one comes back a zillion dollars higher. At this point, it's a formula, an algorithm. I could bombard you with links, but just suffice to say this isn't the first time this has happened, and likely will not be the last. Here's the first google search result for real estate appraiser demographics, which does not condemn any individual automatically, but it tells you what the tea-time party of appraisers looks like, which voices are heard, which voices are not heard, and so on, at those professional and personal gatherings.

Here's a website about becoming a real estate appraiser --> https://www.appraisalinstitute.org/become-appraiser/

submitted by /u/aardy
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/wt0ys5/cnns_top_story_81922_black_couple_says_they/