Mr. Horton then told Edrian Francisco, his loan officer with Stratton Equities, that he felt the appraisal was filled with significant errors, even noting “this could be unconscious bias,” and asked for his concerns to be escalated. But on March 29, the complaint reads, Mr. Francisco sent Mr. Horton an email that read, “It seems like this appraiser has made up his mind on the valuation and there is nothing I can do.”
In late April, Mr. Horton paid for a new appraisal out of his own pocket, and his property received a value of $450,000. By mid-May, however, when he was presented with refinance terms based on that second value, interest rates had climbed several percentage points. He was unable to pull out the cash to invest in the new property.
“My credit score went down. I couldn’t buy Section 8 Housing. It wasn’t just the appraisal, it was a wave of other things that came as a result,” he said. “I felt like I was robbed of an opportunity to create and pass down generational wealth to my family.”
Race “was a motivating factor in the discriminatory treatment that Mr. Horton experienced,” the complaint declares, for multiple reasons: Not only are both Mr. Horton and all of his tenants Black, but there were clear errors in the appraisal that neither the appraiser, appraisal management company nor the lender took steps to resolve even after being made aware of them; the properties used for comparison were in less desirable, more urban neighborhoods with more Black residents; and a second appraisal paid for by Mr. Horton, with comparables located closer to the property in question, revealed a significantly higher value.
Mr. Francisco is no longer employed by Stratton Equities and did not respond to requests for comment. But Gary Merritt, another loan officer with Stratton Equities, said in a phone interview that while complaints about appraisals are common, instances in which those complaints make a difference are rare.
“We often get appraisals that come back and borrowers believe they are worth more,” Mr. Merritt said. “But we don’t have any direct relationship with the appraiser. They’re a third party to us. What we can do is just give them a form, and in about 5 percent of cases that form has an impact.”
Jesse Van Tol, president and chief executive of the National Community Reinvestment Coalition, said his organization chose to serve as co-complainant with Mr. Horton because his case crystallizes a total system failure in flagging bias in an appraisal.
Source: | This article originally belongs to Nytimes.com
