Unresolved complaints filed with HUD alleging Fair Housing Act violations about appraisals have become a serious problem – the lack of resolution is a concern for the parties involved (on all sides), fair housing advocates and defense counsel. HUD has received 200+ complaints regarding appraisals since 2020, but has not determined any on the merits, either way. This is as much of a problem for the consumers submitting complaints to HUD, as it is for the appraisers, AMCs and lenders responding to them.
HUD’s inaction is also leading consumers to file complaints with alternative agencies. And, it’s now leading some consumers to abandon years-old HUD complaints and file court cases without waiting for HUD. The most recent court case alleging appraisal discrimination makes this point.
In this new case, a retired NFL player and his wife have filed fair housing discrimination legal claims. The claims involve multiple appraisals/appraisal reviews for the purpose of a proposed reverse mortgage. There are 9 appraisals/reviews performed by different appraisers from November 2020 to August 2021 identified in the case. The value opinions of the suburban home range from $1.5m to $3.15m.1 The borrowers allege that the low values in that range, which prevented their reverse mortgage, stem from bias based on their race and on the predominant race in their neighborhood. As reflected in the snippet below from their court complaint, they filed a HUD complaint in January 2022 and waited for a result for more than 2 years – until finally withdrawing the HUD complaint in April 2024 to pursue a civil action in state court.
In other matters, I’ve seen appraisers so frustrated with HUD’s inaction, that the appraisers themselves have contemplated heading to court to somehow force HUD to make a determination. These appraisers know that they themselves have not engaged in illegal discrimination and simply want to be cleared.
- For the curious, here are the values/dates of value in the 9 different appraisers’ reports:
> 11/18/20: $3.1m
> 1/13/21 (4 reports with same date of value): $3.1m, $2.6, $2.5m, $1.5m
> 1/26/21: $2.5m
> 6/3/21: $3.15m
> 6/20/21: $3.1m
> 8/20/21: $3.1m ↩︎
