Philadelphia home appraisals exhibit racial bias, a new study uncovers
In a concerning development, homeowners in predominantly Black neighbourhoods in Philadelphia are facing challenges when attempting to secure lower mortgage rates or use a mortgage calculator to take cash out of their mortgages, according to federal data. Applications from these homeowners are more likely to be rejected due to collateral concerns, hindering the generation of wealth in these communities.
The lower appraisals in these neighbourhoods also make it harder for buyers to secure mortgage loans and for homeowners to pull equity out of their properties using a mortgage calculator. According to Ira Goldstein, senior advisor of policy solutions at the Reinvestment Fund, this issue is a significant barrier to wealth creation for homeowners in these areas.
New research from the Reinvestment Fund suggests that racial bias may be a factor in home appraisals in Philadelphia's predominantly Black neighbourhoods. Home appraisals, which are predominantly carried out by white men, play a crucial role in the mortgage-lending process. Mortgage lenders often contract with appraisal management companies, which in turn contract with individual appraisers operating as solopreneurs.
The report, released Thursday, focuses on home appraisals and found that independent valuations in these communities were more likely to be lower than the property's market value. This disparity could potentially lead to buyers being required to purchase private mortgage insurance, potentially raising the amount due each month.
Carlo Batts, principal of Rittenhouse Appraisals and immediate past president of the Philadelphia chapter of the Appraisal Institute, stated that the findings imply some measure of bias in appraisals or appraisal methodology. Batts, a veteran appraiser who is Black, believes that mortgage lenders are largely to blame for the issue of racial bias in home appraisals, not the appraisers themselves.
Batts supports efforts to diversify the appraisal industry but believes that removing racial bias in mortgage lending will require a systemic approach that dissects the entire mortgage-lending process. He suggests that efforts should be made to level the playing field for the real estate industry as a whole.
The specific institutions or persons involved in the appraisal industry in Philadelphia and their influence on racial bias in appraisal results are not directly identified in the provided search results. However, the issue remains a significant concern, with potential implications for wealth creation and homeownership in predominantly Black neighbourhoods.
Read also:
- chaos unveiled on Clowning Street: week 63's antics from 'Two-Tier Keir' and his chaotic Labour Circus
- Skechers Debuts First American Stores Focused on Athletic Footwear Performance
- Racing ahead in Renewable Energy Dominance: Changzhou, Jiangsu Pushes for Worldwide Renewable Energy Ascendancy
- Funds Amounting to Over Two Hundred Million Rupees Collected on Impact Guru to Aid Punjab's Flood Victims in Reconstructing Their Homes
