Why is Only One Side of This Story Being Told?
There are always two sides to every story; however, understanding is a three-edged sword: your side, their side, and the truth in the middle.
Recently there has been a wave of news stories about racism in the appraisal profession brought on by a couple in Jacksonville, Florida. That couple, Abena Horton, a black woman, and her husband Alex Horton, a white male, made claims that an appraiser who first appraised their home came in low on the appraisal due to her race. You can read one of the numerous stories here.
Before anyone here accuses me of being racist etc., I will state that I appraise homes in a major city made up of all races but primarily African Americans. I don’t appraise race. I appraise real property consisting of homes and land, and yes, I am a white male. I am bound by USPAP and a code of ethics to protect the public trust, which I take seriously. Could some appraisers be racist? I can’t say no to this because anything can happen, and there are always bad apples in every profession, and if that were to be the case, I would be one of the first to condemn that sort of behavior and want them to be removed immediately.
Now I won’t get into the specifics as once again you can read the story from many news outlets, including watching a video done by Good Morning America; however, what I will get into, is that this story is being told by only one side with no actual second side being presented. Why? Why hasn’t anyone done their research to determine the truth on this matter? Why didn’t the news outlets do their due diligence to find out the facts before reporting on something so one-sided? Why hasn’t any of the Appraisal profession organizations demanded that both reports be supplied to be reviewed? Where is the Florida State Board? These are questions that need to be answered, yet instead, it appears that everyone is taking the word of this couple for the experience and reporting just one side of this story. I get it, racism is a significant issue in this country, and it shouldn’t be tolerated period; however, not every issue has to deal with race.
Let’s go even further into this as it appears there are many things missing from the news reports as we once again are only hearing it from one’s side. Per the new stories and Abena Hortons’ initial Facebook post, her husband and herself had a predetermined number in mind that they needed to refinance their house at a specific rate. Where did this number come from? Zillow? Redfin? Or perhaps it came from Abena Horton’s employer Black Knight Inc. Who is her employer? Black Knight, Inc., formerly known as Black Knight Financial Services, is an American corporation that provides integrated technology, services, data, and analytics to the mortgage and real estate industries. Black Knight is one of the leaders in AVMs (Automated Valuation Models), which uses algorithms, much like Zillow and others, to estimate a home’s value based on public record data, MLS data, and other online data sites. These algorithms fail to take into account external influences (train tracks, gas stations, cell phone towers, or high tension power lines, to name a few), interior and exterior conditions of the homes ( upgrades or areas of deferred maintenance) as well as neighborhood locations. Could this magical number they needed and well they were given on the second appraisal came from her own company looking to replace the traditional appraiser?
Now, as of this writing, here are some of the values given to their home via three different AVM sites. Notice who the highest one is? I am just speculating here, but it does seem very odd.
Next let’s look at the lender. The lender was the Coastline Credit Union. These are the questions I have for the lender: 1) Did this lender use an AMC (Appraisal Management Company) to perform the appraisal? 2) What was their involvement in the second appraisal ordered since they, too, were surprised by the original appraisal value, according to Abena Horton? I have been an appraiser for a very long time, and before the crash, lenders would influence appraisers by telling them details of what value was needed, issues with a particular property, etc.. Could this lender have influenced the second appraiser and informed them of what happened on the first appraisal and the information from the Hortons of possible racism? Did they hire an appraiser that they knew would help them out? Again more unanswered questions due to the one-sided story.
Now we will get into the appraisals themselves… Where are they? Abena Horton has supplied no significant data other than her own story. While the reports were asked to be supplied numerous times, she continued to skirt the issue of supplying them to anyone. Why? What was her reasoning for not supplying them for additional help? On her Facebook post, any and all comments she did not like were deleted even when actual facts were provided to her. Why would she delete them? The only thing she did was contact HUD and make a claim of racism. Why didn’t she file a state complaint with the real estate appraiser board even after many suggested she do so, she didn’t? Why are both reports not being supplied so that they can be reviewed? Why hasn’t anyone investigated the appraisers and the lender? Your guess is as good as mine.
Now along these lines, we had one appraisal come in at $330,000 and another at $465,000. Now, if I recall correctly, the magic number the Hortons had in their minds in order to refinance was $460,000-$465,000. Interesting that they got that exact number on the second appraisal. Now look back at the AVM numbers I shared above. Not that they really mean anything, but they are still well below the second appraisal even months later. This will show you something… The accuracy of these AVMs if nothing else.
Now the question is… which appraiser was correct? Who were the appraisers? Did they have geographical competency to perform the appraisals? Did they understand the market in these areas? Did the appraisers use the correct comparable sales? According to a local Agent in the area, they believe that the first appraisal was more accurate and that the second one used sales that were not representative of the subject property. The realtor stated that the subject is located near train tracks and across the main road from an extension of the subject’s subdivision where sales are commanding a higher sales price. Were these factors taken into consideration in either report? Again we don’t know because only one side of the story is being told. We know nothing other than one woman’s story.
So here we are today. One woman telling her story; however, the other side has remained hidden. If you are going to make a claim on anything, then I would expect you to have actual facts rather than just your observation. Abena Horton claims to have taken all pictures and more down for the second appraisal.. Well from what I know about appraising, there will be interior pictures of the home within the reports. Let’s see the pictures as well to determine if this is in fact true. If this is an act of racism, I hope the appropriate actions will be taken by the state and other licensing boards as this should never happen. If the second appraisal was influenced and inflated their home’s value, based off hidden info etc., I hope the same actions would be taken. Abena Horton has taken to social media, has been on Good Morning America, and tells her story, devalues the appraiser profession due to her own opinion and thoughts on what happened. It’s time to get to the bottom of this and get the real facts presented. The appraisal profession commands ethical behavior, and it’s now under attack by a story that has not been proven correct.
Here is a recent post below by Abena Horton. However, no comments are allowed unless you follow her. My opinion here is that someone is on a mission and enjoying the spotlight.
There are two sides to every story, with the truth in the middle. Why hasn’t anyone tried to figure out the truth, the facts, and deal with the issue since it came about? Why is it being ignored? Why are appraisal organizations putting a bandaid on an open wound and not trying get to the real issue or cause of it? It’s a shame that anyone can claim whatever they want without providing facts in this day and age. We have no appraisals; we have no facts but rather one person’s opinion and how they perceived things. If you, Abena Horton were a victim of racism, then I applaud you for your actions and will fully support you going forward. If you received a poor appraisal the first time, I would hope you have FACTS to suggest racism rather than just an appraisal that was done poorly. If it turns out you were not a victim of racism, your home was overvalued for your refinance, which you wanted and got the value you needed, then I hope you accept the responsibility of your actions as well as the harm, issues, and more you put others through. Without the facts from the other side of this story, it’s your word against no one and it’s not proven accurate.
There are two sides to every story. We only have one. It’s time to get the full story here before more harm is done to a profession that prides itself on ethics and doing the right thing for the consumer.
By Dean Merriweather, Certified Residential Appraiser
I have read your posts and I am not sure what your expectations are regarding the post. Clearly you believe that racism on the part of an appraiser exists, no one here can determine if your opinion is accurate. I am confident that my colleagues would agree that if your issues are directly related to racism on the part of an appraiser then that appraiser needs to punished.
However, we have yet to see any evidence in any of the cases amplified in news media or your situation that indicates racism. That is not to say your experience did not bring you to that conclusion. I would ask that you identify which of the nine appraisals were completed by a racist appraiser.
Most people do not understand the appraisal process or the product, everyone seems to believe they do, including some poorly trained appraisers.
In regard to your original post, there are some red flags that I would consider if I were looking at this, the first is the time frame between the appraisals, every appraisal has an effective date and markets change rapidly. Additionally, the different intended uses of the reports as well as the lender may have played a part. Neither the use or the lender should result in a significant variation in the opinion of value on the effective date. But, the reality is that many national lenders do not hire the best appraisers, they hire the cheapest and fastest.
Fact: there are bad appraisers that over value as well as under value properties and it is not related to race but is generally a sign of poor training, bad habits, laziness or speed.
I wish you success in your future endeavors.
I was trying not to comment on this story because there is just so much here that is just off and none of it appears to have anything to do with racism. First you say you are a real estate developer but it sounds to me you havet flipped a couple of houses over the years and had less than desirable results. Second, you don’t seem to understand the difference between market value, sale price, and costs; as well as the value today might not be the same next month. Third, high end expensive finishes do not necessarily equate to good quality and craftsmanship. For example: soapstone has a matte dull look and it scratches very easily. That is why most people prefer granite or quartz. Yes it is generally more expensive. Does not make it better quality. Kind of like the farm house sink, it looks neat and cost more but once you have one, you might wish you didn’t but now you are stuck because replacing it means replacing the entire counter. Anyway, I digress and won’t go into a rant on LVP flooring. The point is appraisers are not in the happy business at least they are not suppose to be. They are rendering their own, unbiased (hopefully) professional opinions based on market data. Sometimes the market data is not good and sometimes the market itself is messed up like the one most of us are trying to figure out today. Right now this very second I have on my desk an appraisal assignment in which the buyers signed a contract for $55,500 more than the list price and there are 8 nearly identical comps in the subdivision that have sold in the last 6 months, all for more than list price in 1 DOM but nothing is close to the contract price of my subject. The buyers of the subject are reportedly in California and have not even seen the property. The listing agent says they are desperate to buy a house and have been “beat out” on 5 other offers. They are relocating and don’t care about the price, they just want a place to live. My job is to estimate market value. I am fairly sure tt is not going to appraise for the contract price but I am fairly sure they are still going to buy it for the contract price because they want it, need it, and don’t care which is perfectly fine. But when that sale closes, I won’t be using it as a comparable in future reports because it does not meet the definition of market value. But I know other appraisers’ will and hence the dilemma. The disconnect between “market value” and “contract price” is currently driving a lot of these claims of racism. Many lenders, real estate agents, builders and the general consumer believe they (market value and contract price) are the same thing. Unfortunately, there are some appraisers that go along with them because they just want to make people happy (and get more business) and I can’t blame them especially with all the unwarranted claims of racism. So when there is a large disparity between values, I am fairly confident it has nothing to do with race but more with an appraiser that just wants to keep everyone happy. I recently refinanced a house and the appraiser came from three counties away (there is at least 100 appraisers in my county) and he asked my wife “what do you think it’s worth”. She told him and wallah! I was not happy and even complained to the bank that an appraiser should not be talking “value” with someone with a financial interest in the transaction. They could care less.
The USA has led the world in eliminating social bias related to immutable physical characteristics such as race, especially where it concerns financial dealings, over the past century. This ideal is not even a consideration of populations living in most African and Asian countries as they typically believe that the established culture of the majority race, which was developed over centuries for the population that developed it, is self-evidently biased towards the native population. Western European countries have followed the lead of the USA in this area more so than any other region. Further, the appraisal profession has been a leading light in this conscious, purposeful social transformation. Thus, the reason that racial minorities have found a forum of sympathetic hearings for accusations of “racism” is the centrality of this “colorblind” ideal that has evolved to be at the modern core of both Western Civilization and acceptable appraisal practices. Unfortunately, this ideal has been corrupted by minority “leaders” that have conditioned their followers to use it as a handy excuse for any perceived slight attributable to either individual white people or, when that is not evident, to “systems” of social interaction developed by Western European cultures over millennia.
The reason Jussie Smollett had to fake his race hoax in Chicago was that there were no real-world examples of whites roaming the streets with nooses and bleach looking for black men to abuse. That this was so obviously a hoax yet immediately accepted as “truth”, then publicized and promoted as an example “of where we are in America today” by nearly every media personality and politician in the country (local, state, national and international) with no due diligence, much less an open-minded inquiry seeking the real truth. The most damning aspect of this farce is that even after the irrefutable evidence of fraud was finally, begrudgingly, exposed for public consumption by a few media outlets, the mainstream/legacy media, politicians, and other promoters of this race hoax ignored it instead of apologizing to the public and informing them of the truth in the matter, much less revising their racist worldviews where all whites are irredeemable racists who oppress minorities everywhere all the time.
Finally, it has become fashionable of late to condemn the ideal of being “colorblind”, that is judging individuals based on their character and not the color of their skin, as a “racist” concept. The undermining of this ideal will have disastrous social consequences. It is time to have an honest, real conversation that recognizes the importance of maintaining and seeking to realize the universal ideal of judging individuals based on the color of skin is wrong, no matter what that color may be. The path that we are currently on (emphasizing group identity over individual merit) leads to white people being forced into a corner where they do the same thing as a coping mechanism for defensive purposes, which will set us back 100 years in race relations. And nobody should want that.
The only way to make race a non-issue is to stop making it an issue.
Agree 100%.
Modifying racism to favor one group ALWAYS adversely impacts those outside of that group.
It prevents social growth where we just have an opportunity to enjoy each others varied cultures, ideas and talent.
The very policy and mechanism feds adopted to ‘measure’ fair housing compliance, is the reason racism continues today.
Another metric that doesn’t rely on a census system that collects the exact information all the rest of us are supposed to disregard needs to be found.
Maybe a complaint based system rather than one which permeates all aspects of finance like census tract reporting does?
Omg
Her employer
Her statement about APPRAISAL REFORM
Hhmmmmmmmm can you say Hidden Agenda???
March 10, 2023
Fannie Mae approves six vendors for controversial new valuation initiative
Participating service providers are Solidifi, Class Valuation, Clear Capital, Mueller Services, Accurate Group and Black Knight’s Collateral Analytics LLC
We all knew her motives all along. $$$$$$$
The only surprise to me is that they were able to reach so far down into the barrel without falling in.
I feel so left out. Forty five years of property inspections now and no one has yet accused me of racism or even stealing something from a home. How can this be? However, I was once accused by by a property owner of being too old and stupid so I should just retire because he did not like my opinion of value. I’m just not receiving my “fair share” of these blanket appraiser complaints. Again, I feet so left out.
Will the actual odds today are one in eight (so Im told). That means that 7 our of 8 people will NOT receive complaints. It’s a testament to your apparent quality of workmanship as well as good fortune.
Don’t feel left out. NOT ONE STATE requires a credible complaint from actual clients in order to open an investigation that automatically includes you sending your work file for review. They are NOT concerned with the complaints made so much as whether or not they can find fault in other areas. Different states have different levels of integrity.
I hope your good fortune lasts forever.
The appraisal gap explained.
https://www.ruraltransformation.org/wp-content/uploads/2023/02/ASC-Appraisal-Bias-Letter_PRT_Final-1.pdf
PARTNERS FOR RURAL TRANSFORMATION
Housing bias is one of many contributing factors for racial disparities in homeownership and wealth and financial well-being between white and communities of color, specifically black communities and must be addressed if we wish to correct the decades of systemic racism within housing policy and the housing industry. Communities Unlimited, a PRT Partner, tells the story of a community affected by appraisal bias within their footprint: Pine Bluff, Arkansas. The population of Pine Bluff is 76% black/ African American and 18% white. The current median appraised value for owner occupied homes is $78,500. We can compare this to the nearby city of White Hall, with a population that is 70% white and 19% black, and an appraised median value of $170,300. Homes in Pine Bluff appraise significantly lower than homes in White Hall, with appraisers refusing to use comparables from the nearby city of White Hall to adjust to current market rates in the area.
——————————————–
White Hall vs Pine Bluff. A simple comparison of crime in relation to demographic. Using the governments own statistical data. This is one example that Partners for Rural Transformation suggested the soon to be retiring Jim Park from the ASC appraisal subcommittee consider in their PAVE task force decision making process. Let’s review a broader spectrum of data.
http://www.usa.com/white-hall-ar-crime-and-crime-rate.htm
The White Hall crime rate is much lower than the Arkansas average crime rate and is lower than the national average crime rate.
Crime Index, #43
http://www.usa.com/pine-bluff-ar-crime-and-crime-rate.htm
The Pine Bluff crime rate is much higher than the Arkansas average crime rate and is much higher than the national average crime rate.
Crime Index, #200
http://www.usa.com/rank/arkansas-state–crime-index–city-rank.htm
(Pine Bluff is literally at the bottom of the page.)
People pay less for real property when there is substantial differences in amenity and safety, crime related issues, school performance measurements, employment opportunities, etc. The race baiters call that disparate valuation outcomes, blaming the appraiser for reporting on factual pricing variances which the respective communities and market participants create for themselves.
http://www.usa.com/
———————————————
https://www.greatschools.org/
The same story plays out no matter where you dare to compare through the entire country.
By eliminating the independent human appraiser and coding in disparate valuation adjustment algorithms into the now approved AVM final rule, the lending community is setting up entire communities to be subjected to lifelong debt traps. That’s where the proposed HUD 40 year loan modification for delinquent borrowers and FHFA’s 2023 implementation of 115% LTV loan modifications for fannie and freddie have come into play. Because if the goal is to place people in debt traps, an associated desire is to keep them in debt traps to maximize the financial exploitation. Any questions?