The U.S. Department of Housing and Urban Development (HUD) announced today that it has approved a conciliation agreement between JPMorgan Chase Bank and a Black homeowner, resolving the woman’s claim that the mortgage lender, relying on an appraisal that she believed was inaccurate, valued her home at an amount lower than its actual worth because of her race.
“The race of a homeowner and the racial composition of their neighborhood must not influence the valuation of a home,” said Jeanine Worden, HUD’s acting assistant secretary for Fair Housing and Equal Opportunity.
Worden said the Fair Housing Act prohibits the consideration of race as a factor in the appraisal of a home and in the provision of other real estate-related services.
“Discrimination in home buying, mortgage lending and property appraisal deprives qualified individuals of an equal opportunity to pursue homeownership as a path to family stability and financial security,’’ she explained. “HUD is committed to ensuring that all housing, whether for rent or for sale, is free from discrimination.”
Under the conciliation agreement, JPMorgan Chase Bank will pay $50,000 to the woman and provide home lending advisors and client care specialists with mandatory training on the reconsideration of value process and fair lending issues related to appraisals, including specifics regarding how to handle complaints of discrimination in the appraisal process.
“We did extensive research into the matter and take these complaints very seriously,” a Chase spokesperson said in a written statement. “Appraisers are independent contractors who are not employed by the bank. They are specialists in the specific regions and use market-based comparisons to come up with a value. Our internal review of the appraisal assessment, as well as a market analysis, found no substantive issues and supported the appraiser’s value.”
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Discriminatory practices are particularly problematic for Black home buyers, accounting for missed opportunities to build wealth and stability.
Several studies and investigations show that many tax assessors still routinely saddle Black and minority residents with property tax bills that are too high given the market value of their homes.
The Fair Housing Act makes it unlawful to discriminate in the terms, conditions or privileges of the sale of a dwelling because of race, color, religion, national origin, sex, disability and familial status.
The act also makes it unlawful for any person or other entity whose business includes residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction. Residential real estate-related transactions covered by the act include making loans secured by residential real estate and appraising residential real property.