Census Data Used as Evidence for Bias
I’ve previously written about how the various spear throwers at appraisers have used ‘census tract data’ in their assertions that appraisers are racially biased. It’s been done by Freddie Mac, by Andre Perry in his testimony before Congress, by Ph.D Elizabeth Korver-Glenn in her dissertation paper, not reviewed by anyone with appraisal experience, to obtain that lofty status, the media, and other so called ‘studies’ and ‘reports’ since. That is information foreign to appraisers, because we don’t use or reference anything about Census Tracts in our reports.
The only place that shows up is in one field on the GSE pre-printed report form, which is used by LENDERS and the GOVERNMENT to track loans made in those places. That particular tract number is auto-populated by the report software we use. Census Tract demographic data or specifically mapped census tract locations has NOTHING to do with comp selection.
Problem is, the spear throwers have latched onto that singular item and are using it like a poison substance on the spear point to eviscerate and poke appraisers. It’s the only so-called ‘evidence’ they can claim because they cannot easily re-create neighborhood boundaries determined by the actual appraiser in order to qualify the comps used.
Appraisers are forbidden from using any racial demographic info from any source in reports. We can’t even quote Census data, which is factual information. Yet, the spear throwers are trying to convince the public that we need to, or should base appraisals on racial demographics. They are also trying to convince people that the Sales Comparison Approach is unworthy of use; but that’s a discussion for another day.
Well guess what? In the Motion to Dismiss the remaining Baltimore lawsuit, the appraiser’s very smart attorney writes this (I added bold type and underline):
“Furthermore, Plaintiffs allegation that Mr. Lanham selected comparable properties “in a majority-Black census block” while he “ignored majority-white areas” does not establish the necessary connection to make the appraisal racially discriminatory because Plaintiffs do not allege that Mr. Lanham studied the 2020 census data on the Homeland neighborhood, that Mr. Lanham relied upon the 2020 census data for his appraisal, or even that Mr. Lanham knew the information identified in the census data.
Those missing allegations are critical, and Plaintiffs cannot in good faith allege that Mr. Lanham studied, relied upon, or knew the census data as part of his appraisal because the race of the owners of the comparable properties, or the racial makeup of a neighborhood is irrelevant and not a consideration when appraising the value of a property.
Plaintiffs repeatedly allege that Mr. Lanham should have used comparable properties in the portions of the Homeland neighborhood that are “predominantly white,” but without an allegation that Mr. Lanham knew that the comparable properties he selected were owned by African-Americans or were “in a majority-Black census block,” Plaintiffs cannot bridge the allegation that Mr. Lanham selected comparable properties that were most “locationally similar” to Plaintiffs’ home because of discriminatory intent.”
This is the kind of information that needs to be circulated by appraiser organizations and individual appraisers to the media, to members of Congress, to the various Government Agency Directors, State regulatory officials, and to anyone else involved with using or relying on appraisals.
The spear throwing using this poisoned bogus information needs to be stopped.
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An awesome review of the allegations.
I actually was at the Congressional hearing that Mr. Perry testified. He quoted his source was Zillow.
After the hearing I introduced myself to him and informed him of how very unreliable ZILLOW is. He wanted none of it. His mind was made up.
He wanted none of that because he doesn’t care about facts. He just wanted to push this false narrative about appraisal bias. None of them care about facts!
Yep! What’s truth got to do with?
‘“It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts” – Sherlock Holmes.
I’d wager he knows this already.
This is a great legal response, however, what I’ve been seeing is that it’s not about truth, it’s about the political agenda! This article reminds me of an article I read about the appraising profession not having enough people of color as appraisers. Once again an allegation that doesn’t take into account, that anyone can become an independent appraiser if they want to. I’ve been an appraiser for 37 years and if I were looking at the profession today, I wouldn’t consider it! Too much BS
Agree! Why would anyone in their right mind want to become an appraiser?
Census tract = neighborhood. Simple stuff.
No reason to go OUT of the neighborhood for comps. Location, location, location.
Otherwise you are probably missing land value differences & producing a misleading valuation.
Hank…..just curious if you actually consult Census Tract maps when you do your appraisals, and define your neighborhoods using a Tract Map? Census Tracts are arbitrary lines on maps established by the US Census Bureau and are primarily based on population counts, not on neighborhood characteristics. Once the lines are established, then the Census Bureau uses the census data (collected at 10 yr intervals) to determine demographics of who lives in each tract.
I thought the census maps emphasized age, gender, and growth. Again, those attorneys can imply almost anything Indeed throwing Dart’s!
Seriously need to change the heading. Considering we are talking about minorities and using the phrase spear thrower is liken to spear chucker, of which is a severely racist comment.
I prefer witch hunters, they accuse you, if you deny it is just further proof you are guilty.
Great points! It’s still so shocking to me that these people state in writing in the lawsuits, complaints that they wanted the appraiser to only use comps in “white areas” and not “blacks areas” where the subject property is located. Who is the racist here? Paul Austin, Tenisha Tate-Austin of Marin, California stated the same. So did Cora Robinson of Oakland, California. If one wants their home to be worth what another home in another area is worth, go buy another home in that other area. You can’t just wish value on a property. These people are basically demanding that appraisers commit bank fraud for their, the homeowners, personal monetary gain.
The real issue here is the income gap between whites and blacks, Latino. Whites make more money than blacks, Latinos. People who make more money have more money and buy more expensive homes in more expensive areas. Fix the income gap if you want people to be able to buy the similar priced home. The same thing happens with car values. Next appraisers will be blamed for the difference in value between a 2000 Ford Escort and a 2022 Rolls Royce. They’re both cars with four wheels and an engine, right? Why aren’t they valued the same? (sarcastic)
Thank you Mary. The accusations that the appraiser is racist for not selecting comps in a different neighborhood reads more like the appraiser is being sued for not committing valuation fraud, failing to place borrowers with fictitious high values they would not be able to recreate in legitimate open market sales situations. Appraisers are racist for not promoting more short sales in non white areas? In areas like Harlem where valuations do become higher, the local residents cry out in pain, cash out, and move elsewhere. Be careful what you wish for.
Name one time in history when a buyer was offered a lower price for a home, and demanded to pay the higher price as if that home was in a different neighborhood which drives higher pricing, even though they could have paid less.
The left has a messaging conflict when it comes to housing values and associated concepts of ‘equity’.
Does Brookings Institute take money from housing developers too? Let’s look.
Pg 1, ‘preserve affordable housing’.
That research is challenging because Brookings has been advocating for ‘upward mobility’, ‘affordable housing’, and has had various partnerships with several housing developers whom some are non profit, habitat for humanity, etc, for the last 20+ years. I don’t have the time to read that many historical Brookings publications and financial disclosures to present what we already know is there.
So how is this supposed to work, is falsely driving up housing values with imposed parity values now the same thing as upward mobility? Then what happens to affordable housing? Who is still buying Andre Perry’s nonsense? Brookings should seriously consider re assigning Andre and scooting him into some other project.
The argument that appraisers are responsible for housing value disparity has been disproved again and again, the story only exists due to popular momentum and misunderstanding how to properly and logically interpret the complex data they are reviewing. In the end the reality of this effort is wasted resources which could have been directed to more logical and more helpful proposals Brookings presented in the past. This new trend of virtue signaling based on race despite all evidence and reason is tiring.
What exactly is wrong with lower pricing? I’m quite optimistic about this coming market downturn, finally might scrape out some upward mobility again. Popular news which is verifiably tied in with national housing developers is already signaling more availability and better buyer affordability late this year and just to hang on be ready to re engage. It’s not over yet. Brookings would better serve the under served by getting involved with the issue of GSE’s funneling repossessed properties directly to hedge funds and investment firms at discounts regular citizens are unable to access unable to recreate. If Brookings would have put this much effort into better establishing First Look programs they could have pushed a trillion dollars worth of housing value into minority communities. Instead Brookings is standing there like damned fools pandering to incompetent politicians, bat shit crazy accusations, finger wagging and all.
Its for the $$$. They are just taking advantage of both appraisers and those they purport to help for their own gain.
Would be nice to see this go to court… I think. After they win it will set a huge precedence and establish facts that need to be recognized by the ignorant who are pushing this “narrative”.
The problem is with Census Tracts can’t really be used for market Boundaries. Recently the tracts have been changed after the last census. My new tract is very small now. If you appraised my home and used only the sale in my census tract that would really limit the selection if there are even any sale. Across the feeder route behind my home, there is another neighborhood that would be a great source of COMPARABLE sale in a different tract and if you go east one mile there is a different census tract neighborhood that is also an excellent source of Comparable.All our site size and site Values are very similar. So am I saying you should go out of my Tract. Yes…BUT I have a newer section in the adjacent Census tract that you better not use sale from there to appraise my home. that neighborhood is much newer and different designs and style MY POINT AGAIN is DON’t JUST USE TRACTs. Stick with the time tested sale comparison method. Apples to Apples Oranges to Oranges. Use Competing Neighborhoods Here is the Census tractr Site: https://geomap.ffiec.gov/ffiecgeomap/
Yeah, these are difficult to communicate concepts regarding what competent and fair valuation comparisons are, and what competent and fair valuation comparisons are not. For those looking from the outside in, they are often just directed to ‘median housing value’ statistics which is a macro analysis which results in data which is only statistically relevant in the macro analysis. As the government often presents this data for free, the data is presented via government preferred data peramiters, such as census tracts. When it comes to an individual home value analysis, the macro extracted figures are basically meaningless. The concept of census tracts are irrelevant to local valuation analysis and local research. Residential appraisers are not government employees acquiring statistical data for government funding allocation and political representation purposes. The census tracts are specifically for the government to use, most of the private business interests only review census data off hand if they even bother to review it at all. Every MLS I’ve ever seen does not even have an option to parse data based on census tracts.
Let’s give all these critics free access to MLS data so they can prove the research. Which of course they will be unable to do, not in a compliant logical manner. I’m telling appraisers, it’s always been good practice to post summary MLS data within the report, even more so now. Always include a narrative or check the options if your MLS has the function, to state what the research peramiters were for that particular research set. Our local MLS has a nifty checkbox so every option and every data filter I apply, including proximate distance are stated below the one line data summaries. I’ll post 3 or 4 entire data sets in every single report. The content is already at hand, a core component of workfile development. It only takes an extra half hour to write out an explanative narrative about research methods, it’s complexity or simplicity, the thought process and logic behind why the research was formed that way to attain (keyword always use this); “Credible assignment results.’
If appraisers are competent at market research, they must be or become competent at describing their own market research, the reasoning and fair approach behind it, typing that out in a unique manner for each and every report developed. Appraisers whom use typing services are just asking for trouble. See Addenda. Been doing it so long I now type well over 100 wpm and basically smoke keyboards, go through a new one at least once a year sometimes more. Racist appraisers get their reports done in 2 hours flat and use outsourcing, lol. The rest of us take at least 4-8 hours just for the write up on every single report, sometimes takes days. This is Dave Townes standard email signature inclusion graphic.
Here is all the links to the Dissertation overview and all the other false misleading reports used as spears.
This case will be thrown out against the appraiser. They have no proof to support their claims. Just like Austin vs Miller in Marin City CA. Then Mott will actually need an appraisal when lose the counter claim on Defamation. They will be forced to sell the home to pay him for Liable Slander & Defamation ruining his career he worked long and hard for.
Just like Austins’s they would rather use a megaphone on National Media and call him a Racist on National Television. He stated they hid facts which undermine their claims. They compare him to someone totally different like an appraisal is a reproduceable math problem which it IS NOT. They refuse to present the appraisal done 7 months later because it used superior comps. No Review please because even the reviewer cant fault him for data not available and not pertinent at the time he did his job. I wonder why no review was presented? Fraud or collusion or AIR violations maybe ?? Case reads they refuse to come to the table with the high appraisal or real facts yet they claim discrimination? They will be forced to provide the over valued report conducted 7 months later. Their claims will be shot down like a chinese spy balloon.
He has a strong counter claim because these people intended to hurt him with their actions vs a lesser destructive path to finding truth-, when he did nothing to intentionally hurt them except his highly regulated and legally compliant USPAP job. The judge will have the last word ! Every appraiser needs to download the entire case for your files seen in working real estate publication. This is a great example of competent rebuttal of indefensible claims.
Read the case and view links to his report and more here.
Did anybody just see NBC news
‘They will be forced to sell the home to pay him for Liable Slander & Defamation ruining his career he worked long and hard for.’ Inspiring, thank you.
The borrowers will get out of their echo chamber virtue signaling bubble and realize it was a mistake to try and demand a higher refinance number, than they could sell the home for in real life. They’ll owe the bank the difference for their second over inflated appraisal, and will owe the appraiser they harmed with false accusations on top.
Magic 8 ball is telling me the litigious borrowers will turn around and sue the second appraiser for causing them to think the first appraiser was racist, having relied on the second appraisal for both an upside down loan and a frivolous lawsuit.
Wouldn’t’ that be something though, the appraiser whom may eventually take the most heat and the greatest loss, will be the appraiser #2 yes man who showed up after the fact to give them that higher value opinion. Appraiser #2 probably thought they would be a real hero, steering clear of these accusations, like really believing in the concept of ‘equitable appraisals’. Merry Christmas! Appraiser #2 could get dunked so hard, wait for it.
And then appraiser #1 can roll an additional lawsuit at Dave Bunton and the AI group, for having failed to provide appropriate trade group representation, having pandered to Brookings, repeated false accusations of appraisers being racist in the first place, and having paid AI member group money to the same lawyers pushing the litigious claims on behalf of the borrowers, for ‘advisement and consultation’. Dave went to Brookings to watch movies and have milk and cookies with Andre, true story. The AI group has it on their website that appraiser racism is a problem, basically admitting culpability with their misleading statements pandering to the fictitious appraisers are racist narrative. Don’t forget to same some screen grabs of that. Appraiser #1 could also sue appraiser #2 for having misled the borrowers into thinking they had a valid lawsuit in the first place.
This means the borrowing couple could include both appraiser #2, and the AI group in a counter claim themselves, for having misled them. This also means appraiser #1 could have a civil suit against AI as a follow up as well, one which has the potential to turn class action on behalf of all licensed appraisers since we are all harmed by the AI groups pandering to Brookings and conscious denial of the AEI report issued by Edward Pinto and Tobias Peter.
This could be the catalyst by where appraisers could force a completely new representative panel of member group leaders.
This political theater just gets better and better. Enjoy the show.
Oh I forgot Brookings, how could we forget to include them. They are using your own taxpayer dollars to have made this happen and enrich themselves with false claims. Your tax dollars, hard at work.
Good article. On a side note, the deadline for Housing Wires rising stars is February 24th 2023. In case your asking, with Brian Coaster being a former “Rising Star”, I’m not sure if he can be nominated again. Lastly, it seems Joan Trice has sold Valuation Expo and Appraisal Buzz newsletter as she said “I have reached the point where I need to scale back”. No word if new management will reinstate the ability to provide comments to the articles.
Seek the truth.
i nominate Shane Lanham.. He’s a little over the age limit but not by much..If you have a vote , please consider !
In part, nominees must be no older than 40 years of age (Don’t know if he meets the standards). Of note, and another great example of profiteering off the backs of others, the submission fee is $695. If anyone is asking, I have no information on whether Brian Coaster nominated himself some years back.
Seek the truth.
This is nutz. Is that true? Buy recognition, why not. Joan Trice is selling it? That’s good news. This new Bagott article, did you know Bunton is not an appraiser? Is that true? I can’t believe how poorly the appraisal services industry is managed and represented. Wake me when it’s over. Or perhaps I’ll get lucky and catch a spear directly to the heart. I’m just hoping I did not get lice or bedbugs from this reo unit, some flesh eating bacteria would be my luck. You would not believe it… Omg it was the worst one ever, I’m still recovering.
The complaint is laughable. Complaining that the appraiser used comps that are locationally similar to the subject. Complaining the appraiser used the market to determine how the market views being located next to a busy road instead of the “2% industry standard” they claim. The complaint seems to be that the first appraiser used the market to opine his opinion of market value and since, according to the plaintiff, the market has a certain demographic he should of used a different location than that of the subject.
Yep. I personally phoned a different appraiser whom told me anecdotal data about how he’d approach analysis. Voila! An industry standard. So much for extraction and allocation. It is laughable, wouldn’t using locationally dis similar comparables be biased? Like I really don’t like these people, I’m going to give them a sky high number then keep track of this unit and find great joy when they eventually are foreclosed on. Entitled people you know. Probably have no intention of paying off the home. Otherwise they’d have been in a plush LTV situation and the appraised value number would have been for the most part, simply inconsequential. It’s like complaining that when you use your home like an atm, the bank did not double up your actual account balance based on your racial heritage. So much for the equal persons approach I guess. Does my vote still get a tally of a whole person? Lately I’m sort of doubting that.
One of the unintended consequences is greater scrutiny by your State Licensing Board as they receive complaints from Homeowners, also the ASC Hot Button will be forwarded to your state and you guessed it your State Will Drop a Big Hammer on you. Not because your Appraisal is Biased, No, Your Incompetence. In my state of NC you have to commit murder at the Property you appraised to get revoked. Everything else you did wrong or is questionable all you get is a warning and maybe punished by taking a 7 hour CE class or E-gads 14 hour USPAP Class. Times have changed. It’s getting serious now. So to all you Zippiddy Do Da Appraisers 2-3 Reports per a day a big Target is on your Back….Mark my words.
Yes, but in turn, the accused will have to buy the AI’s new racial pdf book dealie. Equity! And you can bet the board members are not going to allow themselves to get run over if there is media backing. Straight under the bus will be the new status quo.
You could only hope they get washed out but it’s a two edged sword. Most of us would probably rather let the evil neir doers get away with whatever they are doing, rather than face false accusations ourselves.
I missed the free ride again. First I was in an economically stable thrifty position and did not take advantage of the massive fraud known as PPP loans and subsequent forgiveness. And then I argued against fictitious accusations of appraiser racism when I could have jumped on board and sold a book or even been in a movie. Why can’t I have free milk and cookies watching movies at Brookings? Next time I’m going to jump on board and get it right. I’m already a midnight drinker, who’s going to really get hurt?