Teaching Appraisers to be Biased?

[George Hatch]

On another note and in reference the arguments persist relating to the vestigial remnants in 2024 of redlining policies which were outlawed 60 years ago. I wonder how well it would be received if the subject neighborhood's actual location on those historical maps - which would be a matter of fact WRT property attributes - was included in the neighborhood description of a 2024 appraisal? Or if some of the activists' commentary was quoted in those reports.

Do we think those are the kinds of disclosures and analyses these activists want to see in appraisal reports? Is that the kind of objectivity and transparency that they're looking for? Or are they aiming at appraisers taking those factors into consideration in their analyses without disclosing they did it?

"Hey, did you ever think this situation through and take your recommendations to their logical conclusions? Inclusive of considering the law of Unintended Consequences or the prospects of collateral damage. Because TBH it sure doesn't look like you know what you're doing."​

 

[CGinMN]

I don't work in the Conventional/GSE/VA/FHA pipelines. But the reason I don't work in those pipelines has nothing to do with the people or the politics or any other factor involved other than I'm not trying to compete with the SFR appraisers in a grossly oversupplied market for services.

It is about denying services to predatory clients. If an attorney or investor approached me to value a senior citizen's home for potential sale, and I arrived at the property to find them in a state of demensia, I would not proceed with the assignment. Even if what they're doing is legal, it is unethical and I have a right to deny them of my services. Some appraisers won't do reverse mortgages, some avoid unscrupulous hard money lenders, and I have no qualms with that either. Just because something is legal, and other appraisers engage in the activity, and even if society says it is ok, is not sufficient for me to get to sign on the dotted line, no matter what they pay. And it's not because I'm denying services to certain people (borrowers), either.

 

[TerryRohrer]

"The Black Homeownership Paradox

That means, despite widespread, legal housing discrimination in the 1950s and at least part of the 1960s, the number of black households that owned their own homes increased 20% from 1950 to 1970 but, somehow, 50 years after housing discrimination was outlawed, the black homeownership rate is essentially the same today as it was the day the Fair Housing Act became law.

That seems impossible. If discrimination prevented some blacks from buying homes in the 1950s and 1960s, why didn’t outlawing that discrimination in 1968 lead to more blacks owning homes today?"

The Shocking Truth 50 Years After The 1968 Fair Housing Act: The Black Homeownership Paradox

Despite widespread, legal housing discrimination in the 1950s, the number of black households that owned their own homes increased 20% from 1950 to 1970 but, somehow, the black homeownership rate is essentially the same today as it was 50 years after the 1968 Fair Housing Act became law!

www.forbes.com

 

[alebrewer]

"The Black Homeownership Paradox

That means, despite widespread, legal housing discrimination in the 1950s and at least part of the 1960s, the number of black households that owned their own homes increased 20% from 1950 to 1970 but, somehow, 50 years after housing discrimination was outlawed, the black homeownership rate is essentially the same today as it was the day the Fair Housing Act became law.

That seems impossible. If discrimination prevented some blacks from buying homes in the 1950s and 1960s, why didn’t outlawing that discrimination in 1968 lead to more blacks owning homes today?"

The Shocking Truth 50 Years After The 1968 Fair Housing Act: The Black Homeownership Paradox

Despite widespread, legal housing discrimination in the 1950s, the number of black households that owned their own homes increased 20% from 1950 to 1970 but, somehow, the black homeownership rate is essentially the same today as it was 50 years after the 1968 Fair Housing Act became law!

www.forbes.com

I know you know, but just because something was outlawed doesn't mean it doesn't still happen. Not that that in and of itself explains the significant disparity. It is, in my opinion, a combination of structural racism - where minorities aren't afforded the same opportunities as non-minorities, as well as the lasting impact from historical discriminatory activities.

Bank to pay $31M for avoiding mortgages to minorities, largest such settlement in U.S. history

The Justice Department accused Los Angeles-based City National Bank on Thursday of discriminating against Black and Latino residents, requiring the bank to pay more than $31 million in what is the largest redlining settlement in history.

www.pbs.org

 

[Digger88]

My suggestion is to start low-interest loans for people to build in the lowest income areas, paid by adding a small percentage interest on home loans in other areas.

are you crazy lol

do you think access to these homes is the issue and not location?!?

 

[George Hatch]

MOST people buy what/where they can afford.

 

[Terrel L. Shields]

MOST people buy what/where they can afford.

and borrow more than they can pay back if allowed to do so.

 

[RCA]

are you crazy lol

do you think access to these homes is the issue and not location?!?

As I have stated before, if you have depressed racial neighborhood whose more wealthy members grow up and move to completely different and distant upper class neighborhoods rather than build in their home area, the neighborhood will disintegrate. I do believe low interest loans would keep the more well to do locals in the same neighborhood. They should just take the lowest priced 20% and give them a 1% discount on 30 year mortgages. Charge 0.25% more on the other loans to pay the cost.

So, in other words, as say, Blacks improve the education of their youth to get higher paying jobs, they in turn have some incentive to buy back into the neighborhood they grew up in, and improve it.

Low interest is a big motivator.

 

[Digger88]

As I have stated before, if you have depressed racial neighborhood whose more wealthy members grow up and move to completely different and distant upper class neighborhoods rather than build in their home area, the neighborhood will disintegrate. I do believe low interest loans would keep the more well to do locals in the same neighborhood. They should just take the lowest priced 20% and give them a 1% discount on 30 year mortgages. Charge 0.25% more on the other loans to pay the cost.

So, in other words, as say, Blacks improve the education of their youth to get higher paying jobs, they in turn have some incentive to buy back into the neighborhood they grew up in, and improve it.

Low interest is a big motivator.

that would have no effect. no well to do person is going to stay in their neighborhood and be content there if they can afford a better house, schools, shopping, employment, dining, entertainment and safer conditions if warranted. in my area 400k buys you a decent townhome where catalytic convertor theft (and many other crimes) is an ongoing issue. 620k buys the same townhouse 20 miles away with a much better quality of life in all of those scenarios mentioned.

economic mobility means when you dont like something you can change your scenario who is going to stay there. are these people going to be the social settlers to hold themselves or their family back for the greater good? of course not. we are only here for a short time and only a sliver of that time you may become well off enough to live in these "nicer" neighborhoods. should we be using comps from the latter to value the former or is that racist

culture needs to change pride needs to become important to people in less desirable neighborhoods. do you work in any of these areas where you live?

 

[sputnam]

I'm sure we'll continue to disagree, but I would say the only thing impacting home values should be home prices (i.e. market behavior). I think it is dangerous to say anything else (redlining, schools, wealth gap, appraisers, appraiser methodology, etc) is responsible for home values. Maybe it's semantics, but I think it's an important distinction because right now we are being accused of making markets.

It's not just semantics. If the powers that be want to give a leg up to some segments of the population, let them do that. Let them say, for example, 'We know that your property has a market value of $100,000 but, because you are you, we are going to lend you $200,000 on it'. Let's see how that works out.