Discrimination In The American Heartland

by Kevin Burton

   Housing industry officials in Indianapolis face charges under the Fair Housing Act after a woman went to great lengths to prove discrimination.

   This story was reported by Alexandria Burris in the Indianapolis Star. I found it reprinted on the USA Today website.

   It’s about systematic discrimination against non-whites in the housing industry and is under the headline, “Black homeowner had a white friend stand in for third appraisal: Her home value doubled.”

   Burris reports:

   “Carlette Duffy felt both vindicated and excited. Both relieved and angry.”

     “For months she suspected she had been low-balled on two home appraisals because she’s Black. She decided to put that suspicion to the test and asked a white family friend to stand in for her during an appraisal.” 

   “Her home’s value suddenly shot up. A lot.” 

   “During the early months of the coronavirus pandemic last year, the first two appraisers who visited her home just west of downtown Indianapolis, valued it at $125,000 and $110,000, respectively. But that third appraisal went differently.” 

   “To get that one, Duffy, who is African American, communicated with the appraiser strictly via email, stripped her home of all signs of her racial and cultural identity and had the white husband of a friend stand in for her during the appraiser’s visit.”

    “The home’s new value: $259,000.”

   ‘I’m excited, vindicated, relieved, angry, extremely peeved…,destroyed that I had to go through all of that,’ she said. ‘This is real …  just being able to prove it is the hard part.’

    “Now she wants justice. Along with the Fair Housing Center of Central Indiana,

Duffy has filed fair housing complaints

against the mortgage lenders and appraisers she accuses of undervaluing her home because of her race.”

   “Housing experts and historians say residential real estate has been historically marred by discrimination. Across the nation, homes owned by Black Americans are significantly undervalued next to homes in comparable white neighborhoods, according to a study by Brookings Metropolitan Policy Program, which studies housing discrimination.”  

   ‘It’s almost when people see Black neighborhoods, they see twice as much crime than there actually is. They see worse education than there actually is,’ said Andre Perry, a senior fellow with Brookings. ‘I think this is what’s happening when appraisers, lenders, real estate agents see Blackness. They devalue the asset. They devalue the property.’

   “Respondents in the complaints include Indianapolis-based appraiser Tim Boston, appraiser Jeffrey Pierce, CityWide Home Loans and employee Craig Hodges, lender Freedom Mortgage and two of the company’s employees.”

    “The complaints allege they violated fair housing laws by allowing race and color to impact their appraisals of her home and their lending practices. The appraisers, the complaints said, purposely pulled comps that were unfair and racially motivated.”

   “Appraiser Boston denied the allegations.”

   ‘My appraisal reports are data-driven. I could care less about culture or sexual orientation,’ he said. ‘It’s all about bricks and sticks and dirt.’

   “The remaining respondents could not be reached by IndyStar.” 

   “Duffy sought the first appraisal on her home to refinance her current mortgage loan, take advantage of the pandemic’s historically low-interest rates and use some of the equity she built up in her own home to buy her grandmother’s house near Crispus Attucks High School. Duffy hoped to pass the property along to her daughter. 

Duffy began the process of refinancing her home mortgage, which she purchased for $100,000 in 2017.”

   “But, the process didn’t go as she expected, according to the HUD complaint. Duffy worked with CityWide and Jeffrey Pierce of Pierce Appraisal in March and April 2020. They valued her home at $125,000.”

   “CityWide and Pierce could not be reached for comment.”

   “Between May and July of 2020, Duffy worked with her then-lender Freedom Mortgage on her second attempt to refinance her home.” 

   “She was assigned appraiser Boston of the Appraisal Network, according to the complaint. Boston and Freedom Mortgage appraised her home at $110,000 – just $10,000 more than its purchase price and $15,000 lower than the first appraisal.” 

   “The second appraised value, assigned less than two months after the first appraisal, confused her. ‘How did I lose $15,000 in my home value?’ she asked.”

   “Duffy started the refinancing process for a third time in October and November, reaching out to an unidentified company. That time, the complaint notes, she did not declare her race or gender as part of the application process as she did with previous lenders.”

   “When an appraiser was assigned, Duffy said she kept the interaction to email with no phone interaction. And unlike the first two times, she took down the photos of herself and her family and removed her African American art and books that might identify her race.”

   ‘I staged my home to look as ethnically neutral as possible,’ she said.

   “Minus the missing artwork and identifying items, before-and-after photos shared with IndyStar show a home with identical living rooms and kitchens.” 

   “Duffy said she would be out of town and that her brother – who was really a friend’s white husband posing as her relative – would meet with the new appraiser. On the day of the appraiser’s visit, Nov. 4, Duffy gave her friend the Wi-Fi password so he could get work done and left the home.” 

   “He texted her when it was time for her to return, noting that nothing about the visit was extraordinary. Two days later, Duffy received a copy of her new appraisal with the higher $259,000 value.”