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| allendale, oakland, california, mary cummins, real estate appraiser,bias, discrimination, real estate, appraiser, appraisal, real estate appraiser, fair housing,redlining, |
This morning I received the results of a California State Information Act Request I made regarding an alleged case of racial bias in Allendale, Oakland, California which was settled May 2024. I requested any and all documents in the case involving the appraiser because I didn't have the complainant's name or property address. I only had the appraiser's name which I won't post in text.
Complainant stated appraiser told them they should remove security bars from windows. Complainant stated this is evidence of "racist discrimination" based on "racism/includes hairstyle and hair texture." Security bars on bedroom windows which don't release from the inside are against code in California since about 1995. All appraisers, lenders tell everyone to remove the bars because it's the law and prevents people especially children from burning to death in a fire.
Response to State Information Act Request. They redacted name and address.
https://drive.google.com/file/d/1muiicnMhbJfi7F5L2vcltoYvdw8HbIXq/view?usp=sharing
Summary of response. They redacted name and address.
https://drive.google.com/file/d/15KPOXRBORCfL9LknvGr5TiWwObqoHvRJ/view?usp=sharing
Press release from Fair Housing Advocates of Northern California about the case.
I was hoping for an address or name so I could check the values by doing historical valuations. No such luck but I did get other vital information from the complaint, see below. This information shows the first appraisal probably wasn't biased but the second higher one probably was. I will say that census tract 4070, Allendale, Oakland, California is an area going through revitalization and rapid home appreciation. ( FHANC are the ones who stated the tract. Appraisers don't look at tract information. I'm looking at it now because FHANC mentioned it in their complaint. Allendale is almost exact same area as the tract) If you look at the census map linked directly above, the MacArthur Fwy 580 goes through the tract. Generally freeways are initially built through areas which had lower values because it's cheaper for the city, county, state to purchase the land. Allendale is across the bay from much higher priced San Francisco. People priced out of SanFran have been pushed over into Allendale, Oakland for years now. This is why prices in Allendale and the surrounding area have been increasing rapidly especially for fully renovated properties. Properties near freeways vary more in value based on proximity, view of the freeway. This is a map of Allendale on Google. Here is Zillow (I know, I know) chart of home appreciation in Allendale over time. Zillow is okay for trends but not for specific home values.
We do know that the subject property needed repairs. An older property in an area going through revitalization is a more complex appraisal. It will be worth less than similar properties which have been fully renovated. The cost to renovate an older home in this area can easily run $250,000. Most of these homes, duplexes were built 1900-1930.
FHANC states Allendale is a "black neighborhood" which is a racist statement. Census docs state the inhabitants are mainly Latino, Asian, White, Black in that order of percentages. "Black" is actually the smallest percentage of the population in that area. This shows a false statement and bias by FHANC. Census docs state median value of owner occupied homes in area today May 2024 is $702,200 ±$68,592. 78% of homes worth $500-$1M. Only 8% worth over $1M. The home was worth less at the time of appraisal 2021. Median prices for the area were lower then.
The owner stated she had two recent previous and one subsequent appraisal on the property. That's a red flag right there. Why did she make so many recent loan applications? Clearly the previous loans were probably denied or she wouldn't be seeking yet another loan. This would also cause more credit inquiries which make it more difficult and expensive to get a loan. A good loan agent would have explained all of these things to her before doing a credit check or appraisal. Sometimes you need to work on credit or the property before doing a credit inquiry or appraisal or you'll just get rejected and have to wait six months minimum to reapply.
The owner stated the property needed work. "Ms. Trent applied to a mortgage company to refinance her home loan and to use some of the equity to finance needed repairs and renovations." "I was relying on being approved for the loan to in order to make improvements to my heating and bathroom going into the winter." Many banks will not give a conventional loan on a property if it needs major repairs or is in less than average or fair condition. The appraisal value is not the only reason why a loan could be denied. Sometimes lenders just state that when it's not true to deflect blame, complaints and lawsuits. Even if the loan to value ratio were higher than the borrower desired, the borrower could get a higher LTV ratio loan if they had good credit and/or paid a higher rate.
One interesting note is that the complainant states she was discriminated against based on her "Race (includes hairstyle and hair texture)." She claims she was "Denied equal terms and conditions; Denied loan/home owners insurance." She claims the appraiser made racist, racially charged statements which were "critical of her and her home specifically that her security bars should be removed." Unreleasable security bars must be removed from bedroom windows because people can die in a fire. They can be replaced with bars which release from the inside so people can escape a fire. That's not racist but California Health and Safety, Building Code and the law since 1995-1998! Here is the Oakland security bar law. I've said that to everyone with security bars even when I don't see or know what the owner looks like.
She claims the appraiser adjusted sold comps down $150,000 to $200,000 based on their superior condition. She stated her home needed work. We're supposed to adjust for condition. She stated appraiser only used two comps in area with more "white people" unlike her area. She wanted "white" comps just like the last case in Oakland. Again, it's the race income home value correlation and not race home value. Whites make more money than Latinos, blacks. People who make more money have more money and buy/own more expensive homes in more expensive areas. The correlation is not race/color = home value.
She goes on to mention "redlining" maps from 1935-1968. Here's an article I wrote about redlining. The maps were made by the government's Home Owners Loan Corporation to determine property risk factors so the government could give people cheaper loans to help the economy. It included many factors which we still use today. Some maps included race, nationality of inhabitants, not owners of the properties getting the loans. Race, nationality were omitted in 1968. Race, nationality were a mere correlation to value, risk because of income. They were not a direct factor which caused the property owner to be considered high risk and be denied a loan. There were red zones which had no black people. It wasn't black=redzone=loan denied. It was high risk=redzone=loan could be denied.
She said her property was in a yellow zone almost 100 years ago. ( HOLC aka "redline" Map of Oakland 1936-39) Makes sense as it was closer to new then and there was no 580 freeway. She said appraiser cut off comp properties at the 580 freeway. 580 built 1960 after home was built. That makes total sense as that is the edge of Allendale. She wanted the appraiser to choose only certain higher comps in a circle around her. We shouldn't always choose a perfect circle around the subject because neighborhoods aren't laid out that way. She said appraiser only chose comps from specific areas. That's what we're supposed to do. She said appraiser chose comps based on 100 year old redlining map. I doubt the appraiser has even seen the redlining maps from 100 years ago. Research has also shown that redlining affected the white property owners mainly. Research has shown that redlining does not affect properties today in a negative manner. Those areas have actually appreciated the most through revitalization which some incorrectly call "gentrification."
She states appraiser lives in the Bay Area. She also I assume Googled the appraiser after the appraisal. There is allegedly a photo of the appraiser in San Francisco in front of the Gadsden flag with a caption that states "Don't tread on me! A warrior of light never accepts the unacceptable." She states that's racist. The phrase is the opposite of racist. The first part "don't tread on me" is a message to the British not to trample on the rights of Americans. The second part is from "Excerpt from Warrior of the Light: A Manual by Paulo Coelho." The phrase is against antisemitism and Hitler and other ills of the human race. The Gadsden flag flies in the Civic Center of San Francisco. "The Gadsden Flag is a historical American flag with a yellow field depicting a timber rattlesnake coiled and ready to strike, beneath which are the words “DON’T TREAD ON ME.” Its creator, Christopher Gadsden, designed it in 1775 during the American Revolution as a warning to Great Britain not to violate the liberties of its American subjects." She is clearly racist. She sees racism in everything. I realize people who have been discriminated against in the past will assume everything they don't like is racism but it's not.
First appraisal December 8, 2021 at $785,000. Second was a month or so later at $1,125,000. This sounds exactly like the other Oakland case of alleged bias. It's also directly related to an article I just wrote on why appraisal values can vary. That is a huge difference. It appears the second appraiser used properties in a more expensive neighborhood/area farther from the 580 freeway and subject which were in superior C2-C3 renovated condition. I believe the second appraiser was incompetent and trying to avoid a complaint. Higher value means happy borrower and no complaint even if the appraisal is riddled with mistakes and is bank fraud. It takes a good experienced ethical appraiser to come in at market value in these situations knowing there could be a nightmare frivolous meritless complaint like in this case.
Sadly we don't have enough information to know if there was any discrimination in the valuation process beyond what I just stated. Based on the complaint there was no discriminatory behavior. I think the differences in values were due to the second appraiser selecting comps in a different area and not properly adjusting down for inferior subject condition. They may have done that because they knew they were the second appraiser and didn't want a complaint or lawsuit. Maybe the owner told them about the first lower appraiser and said she's filing a complaint. The second appraiser should have been reported to BREA and sued for bank fraud.
Based on my experience researching these cases discrimination is not the issue. The borrower just wanted a higher value. She probably got real estate agent, Zillow postcards in the mail saying "a "similar" home just sold for $1,500,000." "Find out what your home is worth today!" She assumed her home in fair condition would be worth the same when it's not. Agents do this to drum up business. If anyone has more information on this case, please, let me know.
Below is the main three page complaint from owner/borrower. The one from FHANC is almost identical. This is also in the pdf above.
Appraiser John Dorie sent me this information about fire code.
"The International Residential Code, IRC, Section R310 dictates the MINIMUM specifications for
a Sleeping Room. The International Fire Code, IFC, Section 1031 also specifies the minimum
regulations for Emergency Escape and Resue from Sleeping Rooms. Both Codes work in concert
without disagreement.
IRC Section R310.1 and IFC Section 1031.3 require all, “Basements, habitable attics, and every
sleeping room shall have not less than one operable emergency and rescue opening.”
IRC Section 310.2.1 and IFC Section 1031.3.1 and .2 require a minimum of 5.7 sf (net clear
height min 24", net clear width min 20") for the emergency and rescue opening.
IFC Section 1031.6 focuses on “bars, grills, covers and screens” covering possible escape and
rescue windows and doors and is specific stating, “Such devices shall be releasable or
removable from the inside without the use of a key, tool or force greater than that which is
required for normal operation of the emergency escape and rescue opening.”
Below is a sample State Information Act Request, Freedom of Information Act Request. Most Government Departments have forms you can fill out and submit online. You generally request the documents from the Public Records Act contact. I've been doing this with the cases I've covered in my blog.
"Dear Custodian of Record,
Pursuant to my rights under the California Public Records Act Government Code Section 6250 et seq., (or Freedom of Information Act if federal department) I ask to obtain a copy of the following, which I understand to be held by your agency:
(List specific and general items such as all communications, documents, data, files written and otherwise concerning person, address, complaint, lawsuit....)
I ask for a determination on this request within 10 days of your receipt of it, and an even prompter reply if you can make that determination without having to review the records in question.
If you determine that any or all or the information qualifies for an exemption from disclosure, I ask you to note whether, as is normally the case under the Act, the exemption is discretionary, and if so whether it is necessary in this case to exercise your discretion to withhold the information.
If you determine that some but not all of the information is exempt from disclosure and that you intend to withhold it, I ask that you redact it for the time being and make the rest available as requested.
In any event, please provide a signed notification citing the legal authorities on which you rely if you determine that any or all of the information is exempt and will not be disclosed.
If I can provide any clarification that will help expedite your attention to my request, please contact me. I ask that you notify me of any duplication costs exceeding $50 before you duplicate the records so that I may decide which records I want copied. I would prefer to receive the records including audio by email at ***.
Thank you for your time and attention to this matter."
Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.
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