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 in the historic Flanner House Homes neighborhood, just west of downtown, 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 had to go through all of that just to say that I was right and that this is what’s happening,” she said. “This is real.”
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.
Andre Perry, a senior fellow for the Brookings Metropolitan Policy Program who studies housing discrimination, said anecdotal evidence of housing discrimination can be found around the country.
“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,” Perry said. “I think this is what’s happening when appraisers, lenders, real estate agents see Blackness. They devalue the asset. They devalue the property.”
Duffy and the Fair Housing Center of Central Indiana filed the complaints with the U.S. Department of Housing and Urban Development. She’s asking for the federal agency to investigate the appraisals.
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 the defendants violated fair housing laws by allowing race and color to affect their appraisals of her home and their lending practices. The appraisers, the complaints said, purposely pulled comps that were unfair and racially motivated.
Appraiser Tim 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.
Red flags in the wording
When Duffy sought the first appraisal on her home, she didn’t do it with the intention of selling the house.
Instead, she wanted 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.
Despite the public safety orders and businesses closures caused by the pandemic, the real estate market in Central Indiana was red hot. The Federal Reserve was keeping interest rates low. And, Duffy said her sister, who lives nearby, had her home appraised at roughly $198,000 in 2019.
“So I’m thinking, ‘Okay, well, maybe I can get the equity out of my house to purchase my grandmother’s house, so that I can keep that house in the family,’” Duffy told IndyStar. Duffy and the Fair Housing Center declined to reveal her address due to privacy and safety concerns.
So Duffy began the process of refinancing her home mortgage, which she bought 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.
In an interview, Duffy said she initially wasn’t sure what to think about the assigned value, that is until she read the appraisal report.
“The wording in it just it sent out red flags,” Duffy said. “It said there were comps within the half mile, but it said the quality of construction of the other homes were far more superior to the quality of construction of my home.”
She looked at the comps and pulled property cards.
Duffy said she thought the value was incorrect, noting that nearby neighborhoods include Ransom Place and Old Northside. “If that’s the case, what is the difference in those neighborhoods versus my neighborhood?” she asked.
The complaint said CityWide encouraged Duffy to provide comps to challenge the appraised value of her home to determine if mistakes had been made. She paid for a market analysis for her home, which concluded a possible list price of $187,000 and gave that to the lender.
Still, the complaint said, CityWide told her no change would be made based on the documentation she provided.
‘How did I lose $15,000 in my home value?’
Between May and July 2020,…
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