Is there discrimination in the appraisal process?

Aggressive enforcement of anti-discrimination laws and increased demand for minority housing will make it impossible for appraisers to run from the issue of discrimination. There is a significant possibility that concern about discrimination will expand beyond residential to business loans. In recen...

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Bibliographic Details
Published in:The Appraisal journal 1995-01, Vol.63 (1), p.87-90
Main Authors: Edmonds, Charles P, Hand, John
Format: Article
Language:English
Subjects:
Appraisers
Brochures
Economic aspects
Fair Housing Act 1968-US
Federal legislation
Guidelines
Housing discrimination
Loans
Low income groups
Market value
Methods
Minority & ethnic groups
Mortgage companies
Probability
Racial discrimination
Real estate appraisal
Real estate appraisers
Statistical methods
Studies
Theory
Valuation
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Summary:Aggressive enforcement of anti-discrimination laws and increased demand for minority housing will make it impossible for appraisers to run from the issue of discrimination. There is a significant possibility that concern about discrimination will expand beyond residential to business loans. In recent years, courts have recognized 3 methods of proving lender discrimination under provisions of the Equal Credit Opportunity Act and the Fair Housing Act. These are: 1. overt evidence of discrimination, 2. disparate treatment, and 3. disparate impact. Overt evidence of discrimination would occur if an appraiser openly discriminated on a basis specifically prohibited by law. Disparate treatment would occur if clients were treated differently based on one of the prohibited categories. Disparate impact would occur if a policy or practice were applied equally to all clients but resulted in a disproportionately adverse impact on a category of clients protected by anti-discrimination laws. For example, a policy that limits appraisals to properties with a value of $50,000 or more may have a disparate impact on a protected group.
ISSN:0003-7087