Welcome to what's your home? Worth a
WS9 report I'm Larry Miller.
How is it that the the the,
the wood and the walls and the
nails right that were used?
How are they worth less
than what they cost us?
And every realtor said,
we don't know that your house
will sell for that price because
it's not going to appraise for
that in Prince George's County.
I'm an older person,
so you know throughout history they always,
you know said, oh, you know,
communities that are primarily
black are lower value, you know,
and I don't believe that it is
something that is very concerning.
It seemed based on what I read in
the report that you guys layout the
argument that this is a concerted
deliberate effort by some to
disenfranchise marginalized communities.
Would you agree with that statement?
There's no question about it.
It is intentional,
and the more that
we are able to to really highlight
this issue to educate the public
in general about what is happening,
the more we will be able to be
successful in fixing the problem.
We've got a lot of work to do.
We wish things had been different.
It started with the conversation
and LED us on a disturbing journey.
Black homeowners said they
noticed something suspicious
about their home appraisals
and when we got to digging, we too
confirmed something unusual is going on.
For the last year, we've
been examining allegations
of home appraisal bias
here in Prince George's County,
homeowner, after homeowner
told us they lost
thousands of dollars because their house
appraised lower than expected. After
reviewing the data and
talking with researchers,
we found that many of those with
lower than expected home appraisals
were black homeowners that lived
in majority black neighborhoods.
Here in Prince Georges County,
our investigation started with
a small group of homeowners
and would eventually get the
attention of the White House.
I think Prince Georges County
has something very special.
It's my son's bus hey buddy.
The Greater Washington
area can be so transient.
And Despite that people,
they come here, they can move from
any part of the US and decide
to live here and then they stay.
And I think that's a rarity
in the in this region.
If you've not experienced Prince Georges
County, if you're not familiar with the
area, if you don't spend time here,
you're only taking the narratives that
have been perpetuated.
Prince George's County,
Maryland is a majority minority community.
There's nearly 1,000,000 people
who call it home with more than
60% of the population identifying
as black census data shows.
It's the most affluent African American
Majority County in the country.
Jacqueline Priestley is protective of
the county she's built her life here.
She's built a business here.
She even met her husband here
at Church no less.
I was with my mom
and church when Cassius and I met, and
I was like. Are you trying to,
you know, introduce himself on a
personal level? To me, in church and
and he was like
is it OK if I talk to you and Jackie
and cash is would eventually build a
life together in Prince Georges County,
including building a dream home filled
with enough rooms for their three growing
boys and extended family members.
They purchased land in Bowie, paid for
materials and other construction costs.
It would total $1.8 million.
But when the house had to be appraised to
complete a home loan application, it would.
Only appraise at $1.2 million.
Something wasn't adding up.
How
is it that this the the,
the wood and the walls and the
nails right that were used?
How are they worth less
than what they cost us?
When a neighboring counties.
We're building the exact same size
and type of home is worth twice as
much as what our home cost to build
the Priestley's asked for the
appraisal to be reconsidered.
It would only inch up $100,000
more to $1.3 million.
It still left them in the red,
nearly $500,000.
A similar scenario was playing
out at their neighbor's house,
just a few doors down.
We came here and soon as we opened
the door, we were like this,
is it? This is. Exactly,
I didn't have to go a step further.
This is exactly it was
that immediate immediate
a dramatic, winding staircase like this
would catch anyone's eye, and it did.
For the Taylors that were in the
market for a new home back in 2015,
we purchased the home for $1.45 million.
The pair was looking to expand
their growing healthcare business
to complete the transaction.
Their assets had to be
appraised to finalize the deal.
It meant an appraiser would
assess the value of their home,
but the call they got.
And the bank wasn't the one they
were anticipating, he said.
Steve, I got some pretty bad news
for you that the home your home
is not appraise for the value
that you're estimating it as.
And I said, well, what is it?
Just maybe a 50 to $100,000 less.
He's like no more like $300,000 less
than what you than what you paid for it.
About $500,000 less than what you
had estimated the value to be.
That was a total shock.
Could have been a deal killer.
Luckily they found another
way to make the deal work,
but the appraisal left them puzzled.
How would a home they bought four
years ago end up losing $500,000
in value during the height of
the market frenzy in 2021,
Kim remembered the call she
got from a neighbor.
I got a call in February of
last year as the HOA President
from one of our neighbors.
Well, he was building a house,
his family there forever home
at the top of the cul-de-sac.
And of course, during your building
process you have to get an appraisal and
the appraisal that they got was about.
I think 5 or
$600,000 less than what they
were paying to build the house.
You know who's walking around with
four or five $600,000 of cash,
a street lined with large homes
and homeowner after homeowner
saying that the appraisals kept
coming up short and by large sums.
And so I called my friend Melanie gamble.
You know she was. Another way to
become a president of the Prince
Georges County Association of
Realtors, and I said, what?
What are your thoughts about this?
She said Kim is going on
all over the county coming
up. If he's going through
that decision making,
there must be hundreds,
dozens of others daily
that are making the same
decision. So what can we
do about it? From problem
to action? How suspicious home appraisals
sparked a plan for change?
There was a family who had planned to build
a home in our community and their
appraisal was so low that they
were questioning whether to do so.
And then another neighbor said.
Well I got a low ball appraisal.
We're like how is everyone getting low
balled so significantly and coming
in at the same number roughly when
the houses aren't alike in size and
specs and construction materials it
was just they were just different.
They were just weren't meant to
be compared. When
appraisers review a house they
typically use comparable houses within
a particular neighborhood to justify
the value that they've assigned.
For instance, if I wanted to
sell a four bedroom house.
In this neighborhood,
the appraiser would typically use
other four bedroom houses within
a short distance to justify the
value they've assigned to my house.
Homeowners in this boy neighborhood tell
me that just about every house kept
appraising at roughly the same value,
even though the majority of them are
vastly different in terms of square footage,
the number of rooms and other amenities
when homeowners got wind of that,
they realized they needed to act.
I called my friend Melanie gamble.
She was on her way to
becoming president of the.
Prince's County Association
of Realtors and I said what?
What are your thoughts about this?
She said Kim is going on all over the county.
I'm like wow, OK,
So what can we do about it?
Melanie, so she called the National
Fair Housing Alliance next and
we met with them several times.
Then we started adding people Realtors.
She reached out to an appraiser.
I reached out to some of
our other neighbors. Have
you had this same experience and then
the ball started rolling? We started.
Forming this group. Thanks
again for joining us this morning.
The group would call itself the fair and
unbiased appraisal advocates or four.
They would even set up the
website blackhomesmatter.org.
It provided resources to other
families on how to combat low
appraisals or alleged bias,
and I'm going to share with
you a brief example of that.
The group would eventually get
in contact with singer Brookings
Institute fellow Dr Andre Perry,
his scholarly research focused on the
valuation of assets and black communities.
He said what these homeowners experience
is part of a larger systemic problem.
Our research shows that black neighborhoods,
particularly in in the Prince
Georges County area, where they're
losing about $48,000 of equity.
I'm simply because of
the color of their skin.
It has widespread implications
not only for municipalities,
but for the state as a whole.
Home appraisals are important because
the homes are tied to property taxes,
property taxes, fund, local
schools, fire departments.
Law enforcement and a
variety of local projects.
If home values in a particular
neighborhood aren't depressed,
that means less money, less resources.
Going to schools and public safety
departments that rely on adequate funding.
It also presents additional
issues for homeowners.
Lower home values, limit equity,
or the value of a homeowner's
interest in their home.
Home equity can be used to pay
for college home improvements
or even start a business.
That's the money people use to uplift
themselves when wealth is simply.
Distracted simply because of the
concentration or share of the black
population in a particular neighborhood.
You're really robbing people of
a chance at the American dream.
Everybody deserves a fair,
that's something fool.
Wouldn't stand for the fair and
unbiased appraisal advocates went
on to organize several community
forums to get the word out when it's
the same house that's built here.
The meetings were often charged.
How are we
going to pass down?
To our children and children's children.
Angelique Best attended one
of the meetings. She's been a
mortgage broker for over 20 years.
I have been fighting appraisal values for
years after the market crash and died.
Frank came out.
Now when we order an appraisal,
we have to order it through the
lenders appraisal management
company and so we don't have any
relationship with the appraiser.
We don't know even know
who that appraiser is,
or even where they're coming from.
The Dodd Frank Wall Street Reform
and Consumer Protection Act passed
in 2010 overhauling financial
regulations and put in place safeguards
to ensure what led to the 2008.
Housing crash didn't happen again.
There may be some racial
issues to that I'm not.
I'm not even gonna deny that.
That's probably a very very big piece of it,
and so consequently, when you have
an appraiser that comes in low,
it's extremely difficult to argue.
Ayako Marsh has been an
appraiser for the last 23 years.
I live in DC, but I praise in
in Maryland and DC and Virginia.
But my property is the same
property across the bridge.
Same design, same updates,
and it's worth double.
So the location does matter,
and even though we want to try to
say we want to get away from that,
it does matter.
But researchers say appraisers
share in the blame and analysis
from Redfin found appraisals can be
problematic because they can perpetuate
the cycle of racism by assigning
lower values to homes and black
neighborhoods than white neighborhoods.
Coming up things will change.
Lawmakers and the Biden
administration get involved in the
fight for fair home appraisals.
More on that when WS 9 reports returns.
I'd be pounding the table. I'd be
grabbing my realtor by the
necktie and say what is this? How
could a home that I built or maintained
be appraised at less than what
I put into building it? It
took brave families and our
reporting to get the attention of
lawmakers and once that happened,
things really kicked into high gear. First,
Maryland gubernatorial candidate and
the state's current controller Peter
Francho requested Attorney General Brian
Frosh launched an investigation into
allegations of biased home appraisals.
A spokesperson would not comment on the
request when we asked about its status,
then state, delegate and full member Marvin
Holmes went on to propose House Bill 1097,
which would form a task force to study
the effectiveness of policies and
laws that regulate home appraisals.
As a testament to the importance of advocacy.
Bring awareness to disparities and
to biases that stifle prosperity and
so it's not only important that we're here,
and it means a lot to us to be here,
but also to know that USA nine
and your work, specifically Larry,
helped to bring a lot of attention
and exposure to this issue.
His bill worked its way
through the house personally,
a little bit leery in making a
complaint because they fear there
may be ramifications in getting
the loan. It
passed the house and then began its
journey through the state Senate.
OK, I'm here. The delegate homes
and we just left the Judicial
Proceedings Committee where there
was a hearing with regard to HB 297.
It passed the Senate and although
Governor Larry Hogan did not sign
the bill because it wasn't vetoed
by the Governor, Maryland law
states that the bill becomes law.
On Capitol Hill,
the Biden administration was conducting
its own six month long investigation.
Secretary of Housing and Urban
Development Marcia Fudge and White
House domestic policy adviser Susan
Rice coordinated the paved Task Force,
an interagency coalition that examined
appraisal bias throughout the country.
In its 58 page report,
the task force added to research from
institutions like the Brookings Institute,
Redfin and Freddie Mac,
showing homes and majority black and
brown neighborhoods were being devalued
and by thousands of dollars. The
more that we are able to to really
highlight this issue to educate the
public in general about what is happening,
the more we will be able to be successful in
fixing the problem.
The report also detailed changes
aimed at addressing appraisal bias,
like requiring appraisers to
complete anti bias training,
diversifying the appraisal workforce.
That report show is 97% white and
addressing potential bias and emerging
technology based valuation tools. We
proudly live in Prince
Georges County, Maryland.
That paves news conference the
nation heard from Jacqueline
Priestley and two other families
affected by low home appraisals.
Mike Johnson from Ohio,
whitewashed his home after a low appraisal,
removing any signs his biracial
children or himself lived in the
house he shared with his white wife.
He saw the value of his home jump a
staggering $225,000 after erasing
any connection to his house. We
do everything by the book.
We're good parents.
We take care of our kids.
And so to potentially be told that.
You know we don't qualify based
off of the way our family looks
was was disheartening.
Secretary of Housing and Urban
Development, Marsha Fudge. There's
no question about it.
It is intentional.
Now, don't I'm not suggesting
that every appraiser is racist,
but when you have decades of of
of a community being undervalued.
When the person comes in today,
they're going to undervalue it too,
because that has been
its history. How do you get people to support
you? I mean there is an industry that's
been working to devalue the assets of
minority homeowners. For decades, we
have included banks and lending
institutions in this process
and basically said to them,
if we cannot get the appraisers
that you use trained in diversity,
trained in how to appraise housing
in these particular neighborhoods,
we expect for you not to use them.
Secondly, what we have.
That is, that every appraiser is to
get a certain kind of training before
they go out and appraise anywhere.
And thirdly,
the appraisal industry because of
our report has admitted they have a
problem. What does that measure
success look like for you when there
are no issues of appraisal bias?
Once we can get the industry to
admit that they have a problem to
get them to start to bring in more
diverse people to be appraisers for
us to really see them look at this
from a lens that is a lens of equity.
I mean, it's not going to happen overnight,
but little by little house by house
we're going to change it still to come.
Does
your neighborhood feel at
all a bit different now?
Do you feel like the type of life
that you're trying to give your boys
is now going to be more equitable
because of the work that you've been
doing for the past seven months?
You know, they've been on this journey
with us. We're
in the fight for justice and the
home appraisal industry takes
this group of activists to next.
When you love where you live,
it is nice to know that you've
poured back into your community
and to help others in this way,
and this is just one small part.
Whether or not the early action
announced by the Biden administration
is enough remains to be seen,
but the journey for fair,
unbiased home appraisals has
shown that these incidents.
Happening all over the
country from Marion County,
California and the West to Prince
George's County, Maryland.
Here in the east.
But my hope is there are measures put
in place that is able to sustain this
work beyond the current administration
and then in terms of
as the fair and unbiased appraisal advocates,
we're really proud of the attention that
we've brought to misvalued appraisals
here in Prince George's County.
But from our perspective,
we're just getting started
and there's a lot of work ahead
for our. Children, you know they've
been on this journey with us.
They ask questions and mommy,
what's that meeting you're going to?
Or how did you get invited
to the White House?
As a parent, it was a an eye opening
experience to bring our children on
this journey to learn to understand.
It's painful, honestly,
to have to explain what racial bias is,
but more than anything I'm
encouraged because our children
are able to see progress. So
what's next for the fair and
unbiased appraisal advocates?
They say more work and a lot more forums.
They have no intentions of slowing
down until alleged appraisal
bias is a thing of the past and
there's a lesson in all of this.
When we speak up, find allies and
commit to a plan, anything is possible.
I'm Larry Miller.
Thanks so much for watching.
We'll see you later.