Appraisals and ValuationsReal Estate

Waters demands investigation following racist appraiser email

Congresswoman Waters also pledged to introduce legislation

An appraiser who wrote a racist email to a researcher has received a response — but not likely the one he wanted.

In an emailed tirade, appraiser Dave LaVigne lambasted appraisal bias researcher Elizabeth Korver-Glenn for her research on appraisal bias. He wrote that the intensified focus on appraisal bias will backfire, and lead appraisers and lenders to avoid making loans to minority borrowers. He also complained of names given to minority children, and bemoaned minorities being paid to raise illegitimate children.

LaVigne, whose LinkedIn profile shows he is the managing owner at LaVigne Appraisals, provides residential and commercial appraisal services in North Carolina, South Carolina, Virginia and Georgia.

LaVigne did not respond to a request to comment.

Korver-Glenn, in a response to HousingWire, said the email was “merely one example of the systemic racism in the contemporary appraisal industry,” which she said has been repeatedly substantiated by research. She urged regulators and industry stakeholders to “investigate and mitigate this racist appraisal system that includes and trains appraisers like the one who emailed me.”

The email incident first surfaced on Korver-Glenn’s social media account, but it has now caught the attention of California Democratic congresswoman, Maxine Waters, who chairs the House Financial Services Committee.

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In a prepared statement, Waters said the email “shines a spotlight on the racist stereotypes and harmful lines of thinking prevalent in an industry which systematically devalues the homes of Black people and other people of color.”

Waters is planning legislation to address systemic appraisal discrimination, she said. But she is also pushing for action that won’t wait for a bill to pass.

The congresswoman demanded the Department of Housing and Urban Development Sec. Marcia Fudge investigate the specific incident and launch a “systemic fair housing investigation into housing valuation discrimination.” Waters asked the other recipients of her letter, the Appraisal Subcommittee, the Appraisal Foundation and the Appraisal Institute, to work with state appraisal regulatory agencies and boards to investigate the incident and assess whether any appraisals LaVigne conducted may have run afoul of fair lending laws.

The Appraisal Foundation, the appraisal industry’s de facto private regulator, did not respond to requests to comment. The Appraisal Subcommittee did not immediately comment.

A HUD spokesperson, in a statement, declined to say whether HUD’s appraisal task force had already been looking into the matter as part of its ongoing work to address appraisal bias.

“HUD looks forward to working with various stakeholders and Congress to ensure that we all live up to the ideal that was cemented into law decades ago through the Fair Housing Act,” an agency spokesperson said.

In a joint statement with the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, the International Association of Assessing Officers, the Massachusetts Board of Real Estate Appraisers and the National Society of Real Estate Appraisers, the Appraisal Institute wrote that it condemned the “thoughts, language, and tone of this email in the strongest possible terms.”

The groups also said they would address issues of bias and discrimination in a “constructive manner, with respect for all views and participants in the conversation.”

While the appraisal groups condemned the racist email, it’s not clear if anyone will be auditing the appraisals LaVigne has already conducted.

Fannie Mae and Freddie Mac both declined say whether they had acquired loans with appraisals from LaVigne, or if they would look into those loans if they had.

It’s not clear if either of the GSEs have a process for automatically detecting whether an appraisal has been tainted with bias, although both GSEs claim to review appraisals for quality.

Freddie Mac and Fannie Mae say they routinely conduct random and targeted quality control reviews of appraisals on loans they acquire. In cases of substandard appraising, Fannie Mae can share its findings with state regulators. It also occasionally sends out educational letters to appraisers, to encourage them to improve their process.

It’s not clear if any of those oversight processes were triggered by LaVigne’s appraisals. Neither Freddie Mac nor Fannie Mae said whether they would review LaVigne’s past work.

Addressing appraisal bias is a key priority of the Biden administration, in light of a growing body of research, including Korver-Glenn’s own work, indicating the presence of bias in valuations. 

It’s unclear how widespread appraisal bias is. Appraisers have often been skeptical of whether the problem is systemic. A lack of publicly available appraisal data has made that question more difficult to answer.

The GSEs have repeatedly declined to share the appraisal data they have been collecting since 2011, when appraisals were made digital. HUD has also declined to provide statistics on complaints. Lenders, too, have been tight-lipped about how many complaints of bias they receive. Advocates, researchers and industry stakeholders have all asked for the release of data on appraisal bias.

In 2021, HUD launched an interagency task force to root out appraisal bias. The task force’s final report is expected in early 2022.

Editor’s note: This article has been updated to clarify Freddie Mac’s appraisal review process.

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