HUD Dismisses Claims Alleging Racism
We’ve all heard of redlining. No one doubts it existed and MAY still exist, among private lenders. It’s hard to accept major national banking corps would risk it but it IS possible.
Having said that, there is ZERO percentage or benefit for any appraiser to engage in it. None. Another appraiser in Los Angeles, who is a great researcher, posted addresses of the properties involved in half a dozen complaints alleging racism by appraisers and so-called ‘white washing’ of the houses producing subsequent higher values.
There ARE reasons, a later, higher appraisal can result. In some cases, it was attributable to normal market increases over the six months from a first appraisal to a second. In other instances, the “shortage” of $165,000 was on a $1.385 million to $1.45 million property done on an exterior basis with the property owner picking and choosing which interior pictures to send to the appraisers.
The variance in values from low to high is within the NORMAL variance between any two appraisers doing the same high-end property on an exterior basis appraisal, not to mention THAT particular example cited by Julian Glover’s news station was actually located in Canada. IF racism was a factor then it was Canadian racism, not American racism.
My position with the American Guild of Appraisers puts me in a position to review and research racism complaints against our members. To date, two have been received.
One is well-publicized and I can’t comment much beyond saying it was dismissed by HUD because there was zero evidence to support the racism claim.
The other was BY an Asian against another Asian (appraiser). Same result. Complete dismissal by HUD. THINK about that last one for a minute. An Asian appraiser is so biased against other Asians that he appraises low for other Asians out of that imaginary bias?
IF there is a residual impact or systemic racism in lending then look to the lenders themselves. Every single appraisal is required by current regulatory laws and rules to include the census tract number in it.
The ostensible purpose is to enable the feds to monitor loans made in minority communities. What may have had a valid purpose to start though, is the ONLY part of a report that gives underwriter information on the racial composition of a neighborhood.
No other part of an appraisal can so easily lead a malevolent person to find the racial mix of an area.
In 36+ years of appraising, I have seen homeowners engage in racism against minority appraisers. I’ve never seen the opposite.
Let’s apply logic. Is it likely, that if a person hates another race so badly, they’ll risk their entire career and license just to cut a refinance value by a few thousand dollars so the loan gets killed?
Apply the same logic to a sale. If that same hatred (and downright ignorance) is so strong, then why wouldn’t they just let the individual pay more than the property is worth. What would they care?
The truth is that it takes far more work to conclude (and rebut) a value below a contract price than it does one that is at or above contract. We know upfront we have to do extra work to defend our conclusions. We do so when necessary based on value. WHY would we add to our own workload just to hate on another race?
The Head of the Urban League, Mr. Mark Morial, has himself admitted they don’t think systemic racism involves individual rogue appraisers killing values. Rather he ties his perceptions of systemic racism to past (pre-civil rights act and fair housing act) events that did in fact exist prior to 1968 and potentially even a few years after.
For what it’s worth, I have read part of Dr. Perry’s book. It’s interesting in terms of his background (seriously interesting), but he is (1) a racist himself, and (2) contradictory. He rightly claims white America (government) keeps trying to ‘fix’ Black People who are not broken in the first place! He says Black People are just fine. We need to stop measuring their success, value, or culture in the context of comparative white culture. I absolutely agree with him to that point.
But after saying there is nothing broken, and Black Culture and people are just fine, WHY then does he insist that some new form of assistance is still needed to fix a race that isn’t broken in the first place?
Self-serving entities in leadership positions among the Black American Population have conflated the need for investment and access to credit and development with other issues which sidetrack from real issues, as they are intended to do.
So, while forcing appraisers to deal with a chimera of wrongly labeled racism, these same ‘leaders’ (white and black) are able to continue to syphon off federal funds for their own purposes while deliberately ignoring steps that might actually benefit constituent communities.
Find and read a copy of the 1934 FHA Guidelines for appraisers and lenders. Now THOSE were clearly and undeniably racist and written based on ignorance. I don’t know how long they lasted before being rewritten, except that by 1968 they themselves constituted ILLEGAL considerations if they were still being used. I didn’t start appraising until 1986. Those guidelines were long gone by then.
In over 50 years of affirmative action wherein many African Americans did in fact bootstrap themselves into better financial and educational circumstances, IF there are any systemically abused Black Americans today it is the result of having their confidence in themselves stolen by socialist / Marxist teachers, like Lou Ayres and others who prey upon capitalism as a concept while enriching themselves off it by sowing discontent along the way.