Interracial couples were assigned different appraisal values for their homes in the Baltimore, Md., area depending on the skin color of the partner who greeted the appraiser and whether the house was “whitewashed,” a new study from the National Community Reinvestment Coalition shows.
In one case, a single row house was valued at $350,000 when the appraiser met only with their white homeowner in an interracial relationship. The person’s Black partner received a valuation of $310,000 — given by a separate appraiser who met only with them, according to the NCRC, which said it chose the appraisers randomly and scheduled their inspections on different days, but as close together as possible.
For each test, two full appraisals using two different appraisal companies were conducted, with the white partner presenting a “whitewashed” home where any evidence of their Black partner, including family photos and cultural items, had been removed. The Black partner, on the other hand, presented a “blackwashed” home, removing signs of the white partner.
“The discrimination we found in the appraisals system undermines Black wealth-building and almost certainly violates the law,” Jesse Van Tol, president and CEO of the NCRC, a nonprofit based in Washington, D.C., said in a statement. “It is unacceptable for appraisers to undercut the value of homes and conduct themselves less professionally when dealing with Black homeowners.”
“These disparities have also been the subject of various lawsuits from Black homeowners alleging mistreatment. ”
The family later sued the first appraiser and her company, and a trial is set to take place next fall, according to the North Bay Business Journal. (A settlement deal was reached with the another party in the lawsuit — the firm that hired the appraisers, the North Bay Business Journal reported.)
And, in Baltimore, a Black history professor and his wife, a lecturer in literature and Africana studies, said that before they began to refinance their home last summer, a local appraisal company valued their home at $472,000, just $22,000 more than the amount they had paid in 2017 despite $35,000 in renovations and a new $5,000 tankless water heater, according to the New York Times. The family was then denied a refinance loan.
However, when they removed family photos and a white, male colleague stood in for a second appraisal, their home was deemed to be worth $750,000. They ultimately sued the mortgage lender who denied their loan, the appraisal company who gave their first appraisal, and the first appraiser, who they said improperly weighed the value of their home against the sale prices of “comparable” properties that allegedly included a fixer-upper and a property outside the boundaries of their neighborhood, according to the New York Times.
Both cases were mentioned in the NCRC’s report.
“The evidence of systemic bias in the appraisal business has been mounting for some time,” Van Tol said in his statement about the NCRC’s report, “but NCRC’s new testing showed that interracial couples in Baltimore get far better treatment and valuations if the appraiser believes the homeowner and their family are white.”
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