First Known Racial Bias Court Case Against Appraiser
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Folks, a San Francisco, CA US District Court Judge has ruled that the bias suit against an appraiser can proceed.
This link has the story: Judge finds plausible race discrimination in Black couple’s lawsuit over lowball appraisal | Courthouse News Service
Appraiser Janette Miller with Miller and Perotti Real Estate Appraisers was hired by appraisal services company AMC Links to do the inspection in January 2020.
The Austins’ lawsuit, filed this past December, claims Miller valued their home at $995,500 — an amount their complaint calls “erroneously low” considering their home appraised for $1.4 million in 2019.
The couple’s lawsuit quotes from Miller’s report, which appears to attribute her lowball appraisal to declining home values in Marin City following the Great Recession and foreclosure crisis of 2007-2008.
But the Austins note Marin City experienced higher foreclosure rates than other predominately white areas, which is “directly linked to the history of redlining, segregation, discrimination, and lack of access to credit in such communities.” Though more than 10 years have passed since then and home values have rebounded completely, they say Miller insisted on using outdated market trends to disproportionately devalue Marin City homes.
This case has several components.
It began with a refinance “low appraisal”, as alleged by the property owners, who are a black couple, and the appraiser white.
A second appraisal was commissioned, this one with a value substantially higher than the first, $487,000 higher. It should be noted that the home was ‘white washed’ for the second appraisal by the owners to remove observable ‘blackness’ on the property, and they used a white stand-in to represent the owner.
Once that second report was obtained, the property owners decided to file a federal lawsuit, alleging that the first appraiser was egregiously racially biased. The basis of this suit was challenged by the appraiser’s attorney, which was the reason for the ruling by the US District Court Judge – to allow the suit to proceed to trial, if it goes that far. I suspect it will.
The unfortunate thing about this is the US Justice Department has also interceded with the proceeding. It may mean that this will turn out to be the bellwether test case for other similar lawsuits against appraisers.
That’s a sad event for ‘us’ in this business. And after 29+ years in the biz, it may culminate in the appraiser quitting or relinquishing the appraiser’s license.