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Carlette was vindicated and excited. Both were relieved and angry.
She suspected she had been low-balled on two appraisals because she's Black. She asked a white family friend to stand in for her during the appraisal because of her suspicion.
Her home's value went up suddenly. A lot.
The first two people to visit her home in the historic Flanner House Homes neighborhood valued it at $125,000 and $110,000, respectively, during the early months of the coronaviruses.
The third appraisal was different.
To get that one, Duffy, who is African American, had the white husband of a friend stand in for her during the appraiser's visit and stripped her home of all signs of her racial and cultural identity.
The home's value has increased.
She said that she had to go through all of that to say that she was right. "This is true."
She wants justice. The Fair Housing Center of Central Indiana has joined with her in filing fair housing complaints against the mortgage lenders and the appraisers.
Residential real estate has historically been marred by discrimination. Black Americans own homes that are more expensive than homes in comparable white neighborhoods, according to a study.
anecdotal evidence of housing discrimination can be found around the country according to a senior fellow for the Brookings Metropolitan Policy Program.
It's almost when people see Black neighborhoods that they see more crime than they actually are. "They see worse education than there actually is." I think this is what's happening when people see Blackness. They devalue the asset. They devalue the property.
If you suspect discrimination in home appraisals, what to do?
There are complaints.
The Fair Housing Center of Central Indiana filed complaints with the U.S. Department of Housing and Urban Development. She wants the federal agency to investigate the appraisals.
Two of the company's employees are among the respondents in the complaints.
They are accused of violating fair housing laws by allowing race and color to affect their appraisals. The complaints said that the comps were pulled because of their race.
Tim Boston denied the allegations.
My appraisals are data-driven. He said he could not care less about culture or sexual orientation. It's all about bricks and sticks.
IndyStar could not reach the remaining respondents.
There are red flags in the wording.
When she sought the first appraisal on her home, she didn't do it to sell the house.
She wanted to use the equity in her home to buy her grandmother's house and take advantage of the low interest rates on her mortgage. The property was supposed to be passed along to her daughter.
The real estate market in Central Indiana was very busy despite the public safety orders. The interest rates were kept low by the Federal Reserve. Her sister had her home valued at $198,000 in 2019.
"So I'm thinking, 'Okay, well, maybe I can get the equity out of my house to purchase my grandmother's house, so that I can keep that house in the family,'" Privacy and safety concerns made the Fair Housing Center refuse to reveal her address.
She purchased a $100,000 mortgage for the refinancing.
According to the HUD complaint, the process didn't go as she expected. In March and April 2020, he worked with CityWide and Jeffrey Pierce. Her home was valued at $125,000.
Neither CityWide nor Pierce could be reached for comment.
In an interview, she said she initially wasn't sure what to think about the assigned value, until she read the appraisal report.
The wording sent out red flags. The quality of construction of the other homes was more superior to the quality of my home, it said.
She pulled property cards from the comps.
She noted that Ransom Place and Old Northside are nearby. What is the difference between those neighborhoods and my neighborhood?
The complaint said that CityWide encouraged Duffy to challenge the value of her home to see if mistakes had been made. She gave the lender the market analysis that concluded a possible list price of $187,000 for her home.
The complaint said CityWide wouldn't make a change based on the documentation she provided.
The Fair Housing Center of Central Indiana photographed Carlette Duffy on May 6, 2021.
I lost $15,000 in my home value.
Between May 2020 and July 2020 she worked with Freedom Mortgage on her second attempt to refinance her home.
She was assigned Tim Boston of the Appraisal Network. The home was assessed at $110,000, which was $10,000 more than the purchase price and $15,000 less than the first appraisal.
She was confused by the second appraisal, which was assigned less than two months after the first appraisal. She asked how she lost $15,000 in her home value.
She asked the lender for an explanation, but she didn't get it.
"That's equity, the cash in my home that was stolen from me, is what I felt like," she said. What happened to it?
Freedom Mortgage did not reply to IndyStar inquiries. Boston said that he followed the rules for the job.
There are affordable housing, lack of inventory issues in Indiana, according to a survey.
He said that his license is at risk if he doesn't do it correctly. From the appraisal management company to the bank, those appraisals go through statistical packages, a logarithm type software to test my value. It will kick back if it's not within a certain range of software programs.
He said his appraisals are reviewed for accuracy.
Boston told IndyStar that his appraisals are based on factors such as a home's square footage, architectural style, neighborhood values, cost to build if brand new, and surrounding comparable properties.
He said that market is what drives an appraisal.
At the time, Boston's appraisal was challenged by Duffy. She said she was told that no changes would be made. She decided to leave.
Boston doesn't recall getting any more documentation from Duffy.
Something else is happening.
In the months that followed, she told her friends and family about her experience and her suspicions that racism played a part in her appraisals.
I had a lot of resistance from family, friends, and friends in real estate who were saying, "Maybe that's just the value of your home, you know?" This is how things are.
None of those arguments convinced me that I was wrong. I felt like something else was happening that we weren't seeing.
She couldn't not be bothered by what happened.
It was more than just the appraisals that made the alarm go off. During the process, she was quoted interest rates of 4%, 3% and 5%.
Buying a home in Indianapolis has a crazy market and there are 3 things to look for.
The interest rate on her current mortgage loan was 3.9%.
Freddie Mac data shows that the 30-year and 15-year mortgage rates had fallen below 3.5% in April.
She worked to improve her credit after purchasing her home so she could get a conventional loan. She said pulling her credit scores multiple times had an adverse effect on her credit score.
I couldn't do a conventional when I tried again at the end of the year. She said that she could only do an FHA. When I didn't declare race or gender in the application process, I got an anaglyph rate of 2.9%.
I'm not crazy.
Amy Nelson, executive director of the Fair Housing Center of Central Indiana, discussed banking consent decrees at a community meeting in the fall.
Nelson mentioned a New York Times article about a Black woman who suspected racial discrimination when she and her husband, who is white, sought to have their ranch-style home in Jacksonville, Florida, reappraised. A friend had also sent the article to Duffy.
She saw a report about how race and class can affect economic mobility in Indianapolis, and she believes they were all signs that she needed to fight what happened to her.
The Fair Housing Center of Central Indiana held a news conference to announce a program to protect renters' rights.
After her credit had recovered from the previous attempts, she started the process again in October and November. She did not declare her race or gender as part of the application process as she did before, according to the complaint.
She kept the email and phone interactions to herself when she was assigned an appraiser. She removed her African American art and books that might identify her race after taking down photos of herself and her family.
She said she staged her home to look neutral. I was numb to it because I was just going through the process and not crazy. I'm not crazy. I'm not crazy.
More about how COVID-19 affects whether to sell a home or stay put.
The before-and-after photos shared with IndyStar show a home with identical living rooms and kitchens.
She said she would be out of town and that her brother would meet with the new appraiser. On the day of the appraiser's visit, Duffy gave her friend the password to the internet so he could get work done.
He said nothing about the visit was extraordinary when she came back. The new appraisal was worth $259,000 and was received two days later.
Boston had no explanation for the 40% difference between his appraisal and the final one.
He said that they should have to look at the appraisals to figure out why there is a big difference.
The HUD complaint publicly released by the Fair Housing Center contains the identity of the third appraiser. He wondered if that party is certified.
Nelson said that since there was no complaint against the third person, the center did not need to identify them.
It feels like Duffy is vindicated.
She said that she was excited, vindicated, relieved, angry, and upset since she couldn't say the other expletives that were running through her at that point in time. It is hard to prove that this is real.
The Fair Housing Center of Central Indiana photographed Carlette Duffy on May 6, 2021.
The neighborhood is historic.
It's not lost on her that she lives in a historic African American neighborhood constructed in response to discrimination in the 1950s and 1960s.
The historic Flanner House homes were built on a 178-acre tract of land west of downtown.
The neighborhood was created as a sweat equity project in which male heads of household constructed their and their neighbors' homes, according to Paul Mullins, a local historian and IUPUI anthropology professor.
It was meant to get Black Indianapolis residents locked out of suburban white communities due to race, a chance at home ownership. The neighborhood of Flanner House homes had a Black middle class heritage due to the families that wanted to live there.
The homes were modest and bore no distinctions from the suburban homes of white Indianapolis residents, according to the genealogy and history of the neighborhood. The federal government and Flanner House collaborated with local community leaders.
The housing market is hot and these Indy-area neighborhoods are among the hottest.
A Korean War veteran who couldn't afford a down payment on a home, got into the Flanner House program, and that's how he ended up in the house that is now Duffy's. The house was completed in about 1956 and was lived in by Childress until 1988.
The house was destroyed by a fire and was exposed to the elements before being rehabilitated.
The neighborhood is being gentrified. The 16 Tech project is a mixed-use biosciences district with office space, a food court, commercial and retail space. A major university, student housing, high-rise offices and luxury apartments are all there.
Ramifications.
Nelson of the Fair Housing Center said that the problem is decades old.
She was getting the first two appraisals done when the market was already appreciated. Why weren't those appraisals showing that? They didn't.
She said that the appraisal industry works in a questionable way. The redlining process was supported by the industry, which is why the neighborhoods were built as a "sweat equity project".
"I think there is a lot of science there, but the appraisal industry has been able to give this perception of it being an art and science that then results in them to be able to run almost unchecked or unable to be verified as to whether or not they're following recommended guidelines,"
The research was done on how racial bias distorts the housing market. He compared home prices in neighborhoods with a higher share of Black population to neighborhoods with a lower share.
Others are reading about the firings at the Indianapolis location.
Home prices could be affected by crime, walkability and other factors. The homes in Black neighborhoods were underpriced by 23%. There was a loss of $160 billion in lost equity.
The Real Estate Valuation Fairness and Improvement Act of 2021, which was introduced in the U.S. House of Representatives in April, was preceded by research by Perry. The bill addresses racial differences in real estate appraisals.
Discrimination in appraisals can be both systemic and individual.
He said that the price comparison model is called systemic. "When you only compare homes to peers in neighborhoods that have been discriminated against, you essentially just recycled discrimination over and over again." There are more systemic reasons why you have individual acts of racism. They are robbing people of their wealth.
Contact IndyStar reporter Alexandria Burris at aburris@gannett.com She can be followed on the social media site:@allyburris.
Indianapolis homeowner says appraisal doubled when she hid her race.
