Combating Appraisal Bias Series: Building Fair Housing Partnerships - Thank you for participating. The event will begin shortly - Slides
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Combating Appraisal Bias
Series: Building Fair Housing
Partnerships
Thank you for participating. The event will begin shortly…
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Forum 1: Roundtable Recap – Appraisal Bias and the
Generational Wealth Gap
Discussion of:
❑ Two personal stories of appraisal bias from two very different markets
❑ Multiple markets across the country are being impacted by appraisal bias
❑ Two housing counseling agencies that are actively combatting appraisal bias:
Neighborhood Housing Services of Chicago
The Spanish Coalition for Housing
❑ The National Association of Realtors
o Background/History
o Changes being considered
Forum 2: Roundtable Recap – What Housing
Counselors Need to Know
Discussion of:
❑ The impact of appraisal bias – through data
❑ PAVE Action Plan
❑ A personal story of appraisal bias
❑ Housing Counseling Perspective
Neighborhood Services of Chicago
Housing Advocates of Northern California
❑ Appraiser's Perspective – Ayako Marsh
Learning Objectives
❑ Learn about created partnerships between FHAPs, FHIPs, housing counseling
agencies, and Appraisal Certification/Licensing Boards that address housing
discrimination in the home appraisal process
❑ Explore the potential for new partnerships and initiatives to combat appraisal
bias
❑ Hear creative solutions beyond filing cases to address appraisal bias
❑ Gain understanding from a Regulator's perspective regarding how the Fair
Housing Act and the Equal Credit Opportunity Act (ECOA) apply to the
appraisal industry
❑ Receive strategies, tools, and resources to assist Fair Housing agencies and
their partners educate consumers about appraisal bias and empower them to
act if they believe they have experienced this form of housing discrimination
Reminders ❑ This event is being recorded. ❑ Materials, including the slide deck and resources, are posted on www.HUDExchange.info/NFHTA. ❑ Event recording will be available about two weeks after the event. ❑ Submit questions in the Q&A box at any time during today’s event.
Combating Appraisal Bias:
Building Partnerships
Fair Housing Advocates of Northern California
Caroline Peattie, Executive Director
March 15, 2023
What does FHANC do?
◉ FHANC is a HUD-certified agency receiving funding through the Fair
Housing Initiatives Program (FHIP)
◉ FHIPs receive HUD funding to do fair housing work:
➢ Counsel renters and homeowners who experience housing discrimination
➢ Investigate housing discrimination through testing and other means
➢ Advocate for clients through informal interventions, administrative complaints,
and/or lawsuits
◉ FHANC is both a FHIP and HUD HC agency
Combining FHIP & HC services to address appraisal bias ◉ If the house appraises too low, the borrower will be offered less favorable loan terms or the loan will be denied ◉ Appraisal bias results in unfair access to credit ◉ If (prospective) homeowner is working with HUD HC agency to access a loan (e.g. 1st time homebuyer), HUD HC counselor may be first to be alerted to appraisal bias ◉ If (prospective) homeowner understands that they have experienced housing discrimination, may contact FHIP
Appraisal Bias in the Bay Area
◉ Regional impact
➢ In Bay Area, there are a number of cases of appraisal bias
➢ Appraisal bias can be particularly problematic in high-cost areas such
as the Bay Area
➢ A low appraisal can be the difference between getting a loan/not
getting loan, favorable terms/unfavorable terms
• NO LOAN = NO HOUSE
• LESS FAVORABLE TERMS = LESS AFFORDABLE LOAN = NO HOUSEWhat resources are available to
tackle appraisal bias?
◉ If you or your client suspect their house was undervalued due
to racial/ethnic bias, they have options!
➢ They can request an ROV (if they haven’t done so already)
➢ They can file an administrative complaint with HUD or their local
FHAP or file a lawsuit
➢ Refer them to a local FHIP who may be able to investigate their claim
and/or represent them in a complaint or lawsuitAustin Case in Marin City
Unreasonably low market value: ◻ Valued at $995,000 ◻ 3 weeks later with white friend posing as homeowner: $1,482,500
Fair Housing Advocates of Northern California
Appraiser focused on dissimilar properties in
Marin City, a historically Black neighborhood.
Appraiser made unsupportable
adjustments to value of comps based on
location.FHANC & Austins’ Lawsuit
◉ Filed in December 2021
◉ Settled with AMC in October 2022
◉ Settled with appraiser February 2023
◉ Terms of settlement
➢ Monetary amount
➢ Agreement not to discriminate in the future
➢ Will watch ABC documentary “Our America: Lowballed” featuring
the Austins’ story
➢ FHANC will train on history of segregation in Marin CountyOther Resources for Clients ◉ Media campaigns ➢ Clients have felt empowered by being able to tell their story. ➢ ABC7’s “Our America: Lowballed” ◉ Media partnerships ➢ FHANC and ABC7 partnered as referral network ➢ Partnered in appraisal testing ➢ Press/media allow for easy access to public (complaint solicitation)
Pitfalls to Avoid in Partnerships
◉ Goals and objectives of partners may be very different
➢ Media = tell good story to raise awareness; pique maximum interest
in viewers
➢ Fair housing advocate = conducting investigation that will allow for
best outcome for client
◉ Will partners’ goals/objectives come into conflict?
➢ How will the story of your client be told? Will that affect your client’s
case down the road?
➢ Will the investigation be impacted?Getting Up to Speed
◉ Learning how to investigate appraisal bias cases
➢ Don’t reinvent the wheel; form working groups with others
➢ Use existing resources – National Fair Housing Alliance if you
are a member organization, other FHIPs such as FHANC
➢ If you know appraisers who are concerned with the issues, ask
them about how to look at appraisals, about what are the
norms, or explain USPAP (Uniform Standards of Professional
Appraisal Practice)How to investigate appraisal
bias cases
◉ If your client received a low appraisal, ask:
➢ Was the appraiser aware of your race/ethnicity at the time?
➢ What neighborhoods did the appraiser pull comps from? Are the
demographics of those neighborhoods similar or different from your
neighborhood?
➢ Are the comps selected or adjustments made inappropriate in any
way (far away, too big/small, not comparable area, etc.)?
➢ Did you ask the lender for a reconsideration of value? Did you: 1) let
them know you feel race may have been a factor 2) suggest any
alternative comps?
➢ How did the appraiser and/or lender respond?How to Work on a Case
◉ Involve your clients!!
➢ They know their own neighborhoods; and it’s empowering
➢ They can tell you how far away certain comps are or something about
the census tracts they were pulled from
➢ In one of our appraisal lawsuits, when the appraiser mentioned a
property that had sold for much lower than the higher, more
equitable 2nd appraisal our clients had received from a different
appraiser, our clients were able to immediately identify that house
and point out all the differences in structure, size, and appearance.
➢ In another case, our clients (a licensed realtor and appraiser)
submitted a 60-page ROV which gave us a great deal of ammunition.FHIP Agencies’ Roles
• Why should FHIPs engage in this type of investigation?
• Can be daunting, but you may be the only recourse when it comes to
advocating for your client
• Referring them to file an administrative complaint is likely to lead to a
case closure.
• You can help clients articulate their story in a way and with the
appropriate statement of evidence and facts that you know HUD or a
FHAP requires
• Types of education and outreach to consider: forums, literature,
website/social media, press releases/media – help the public
learn about appraisal bias and what can be done about it!Fair Housing Advocates
of Northern California
1314 Lincoln Ave., Ste. A
San Rafael, CA 94901
(415) 457-5025
www.fairhousingnorcal.org • fhanc@fairhousingnorcal.orgNID-HCA:
Combating Appraisal Bias
LATISHA CARLISLE
VP of Housing,
NID-Housing Counseling Agency, A HUD approved IntermediaryTALKING POINTS Our Mission The Connections: HUD Approved Counseling and Combating Appraisal Bias: FHIP &FHAP &Other Essential Partnerships Historically Black Colleges and Universities (HBCU's) and Minority Serving Institutions (MSI's) FairHousing Resources
• NID-Housing Counseling Agency was established in 1993, as a non-profit organization designed to educate tenants, homebuyers and homeowners to provide education, counseling and advocacy for equitable access to fair, safe and affordable housing opportunities. • NID-HCA has a 30 year investment in communities of color nationwide providing comprehensive housing counseling and education in over 50 inner cities and rural communities. • NID's network of HUD Certified Housing Counselor's has on average more than 20 years experienceinupholdingfairhousinglawsforourclients.
Our Mission Our goal is to improve the quality of life in America’s cities. We will accomplish this as partners working together with our friends and neighbors. We will help our communities become places where families can live in safety, prosperity and harmony; places where the American dream of homeownership can flourish; places where fair, decent and affordable housing is a reality for all people.
The Connections: HUD Approved Counseling and
Combating Appraisal Bias: FHIP & FHAP & Other
Essential PartnershipsFair Housing Initiative Program (FHIP)
• Designed to develop, implement carry our programs or activities designed
to obtain enforcement of the rights granted by the Fair Housing Act.
* Enforcement
* Testing
* Training
Fair Housing Assistance Program (FHAP)
• Is a partnership between the federal government and state and local
agencies to provide protection to the public against discrimination in
housing
*California Civil Rights Department (CRD)FHIP
• Collaborate on education and events to increase knowledge and
understanding of Fair Housing Laws
*Bay Area Legal Aid
FHAP
• Complaint Process & Housing Counseling
• CRD evaluates the facts & decides whether to accept the case for
investigation
Housing Counselors are essential
• Helping clients submit their complaint and appeal if applicable.National Fair Housing Training Academy (NFHTA)
• Basics of Fair Housing
• Fundamentals of Intake Partnerships is KEY
• Fundamentals of FHAP Investigations
• Litigating Fair Housing CasesEducation is key!! We partner with fair housing agencies and advocates that train NID Counselors and support NID clients to address claims of possible discrimination. We educate our clients on understanding the 14th Amendment to the U. S. Constitution; "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States or shall any State deprive any person of life, liberty, or property, without due process of law nor deny to any person within its jurisdiction the equal protection of the laws" NID and its counselors are long standing members of the NAACP. stay abreast of legislative updates, like the Civil Rights Acts of the 1950s -1970s, in pursuit of equal and fair treatment in their search for fair, decent and affordable housing. Fair housing centers don’t have the authority to adjudicate matters of law, but they are staunch advocates for victims of discrimination. Many fair housing centers will advocate on behalf of victims of discrimination through the federal, state, or local complaint process; may be able to refer you to an attorney Understanding the US Constitution, legislative amendments, as well as the complaint process helps our clients to be true advocates and wealth builders.
PAVE Report Action Plan Category1:Strengthen Guardrails Category2:EnhanceFairHousing & Fair Lending Enforcement Category3: Build a Diverse, Well Trained&Accessible Appraiser Workforce Category4:Empowercommunitiesto takeActionAgainst Bias Category 5: Giving Researchers & Enforcement Agencies Better Data to Better Study and MonitorValuationBias PaveReportActionPlan: https://pave.hud.gov/actionplan
April is National Fair Housing Month! This year, we commemorate the 55th anniversary of the passage of the Fair Housing Act, the landmark civil rights law signed by President Lyndon B. Johnson on April 11, 1968, that made discrimination in housing transactions unlawful. Fair Housing Month Events • Fair Housing Month 2023 Opening ceremony • Fair Housing Month 3034 National Event • Fair Housing Poster and Virtual Backgrounds
Historically Black Colleges
and Universities (HBCU's)
and
Minority Serving
Institutions (MSI's)HBCU/MSI Initiative: Objective: Services that elevate student's financial skills and teaches them about money management and the importance of maintaininggood credit and wealth building thru homeownership. Barrier: Supervisory requirement barrier to entry and a greater obstacle for diversification. Combating Bias: We partner with the National Society of Real EstateAppraisers (NSREA), a predominately Black real estate appraisers organization to provide education and training to HBCU's & MSI's.
Fair Housing Resources
Fair Housing & Equal Opportunity
https://www.hud.gov/program_offices/fair_housing_equal_opp
FHEO Table Talk Series
https://www.hudexchange.info/programs/fair-housing/fheo-table-talks/#examining-socioeconomic-structures-to-improve-racial-
economic-equality
April is Fair Housing Month!
April 15th Community Day, Nationwide
FHEO Outreach Materials
https://www.hud.gov/FHEOoutreachtools
• Fair Housing Month: https://www.hud.gov/FHMLATISHA CARLISLE, VP OF HOUSING
NID- Housing, a National HUD Intermediary
latishacarlisle@nidhousing.com
510-473-8545
www.nidhousing.comQUESTION
&
ANSWER
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