"Altadena is not for sale!" What's the Alternative? Foreclosure, Bank Sale, Homelessness, Monetary Losses? by Mary Cummins Real Estate Appraiser

altadena, gentrification, mary cummins, eaton fire, land value, insurance, los angeles, california, home, house, value, fires, destroyed, black, latino. Photo of Mary Cummins doing property inspection in front of home burned in 2025 Los Angeles fire.

"Altadena is not for sale!" is the rallying cry from some Altadena residents. Some don't want fire destroyed properties to be sold to developers to rebuild. They fear the neighborhood will change and become "gentrified." What is the alternative? Should properties stay vacant for years? Should homeowners lose their properties to foreclosure and lose all their investment? Some people clearly haven't really thought this through. I personally believe the people yelling this are probably renters and not homeowners. They also don't know the true history of Altadena.

Altadena has been changing for many years. It originally belonged to Native Americans. Spain stole their land through conquest starting around 1492. Mexico then owned the land after the Mexican Revolution in 1820. California later became part of the USA after the Mexican American War in 1848. The original Altadena pioneers were farmers. The area was later turned into home development starting around 1880. 

Some areas of Altadena and the rest of the US had "whites only" covenants. This meant no Blacks, Mexicans, Jews, Indians, Asians ... could buy or own the properties. Starting around 1940 Altadena started to decline as residents moved to newer nicer areas. Around this same time Courts started to uphold the Fourteenth Amendment making deed restrictions unconstitutional and unenforceable. Soon after antidiscrimination, anti-segregation and Fair Housing Acts followed and anyone could live in any community they could afford. This coincided with what was called "white flight" from some older less expensive areas. This is also called "reverse gentrification" which correlated with property decline and property value declines. All types of lower income people moved to this area because it was now more affordable.

Real estate all over the world goes through cycles from growth, stability, decline to revitalization and repeat. Some call the last stage "gentrification" which is now a dirty word in real estate. It's just a real estate cycle when properties in the area are improved and values increase. It has nothing to do with race or culture. From 1940 to 1990 Altadena was still in decline. As home prices increased in surrounding areas people were pushed out of for example more expensive Pasadena into less expensive Altadena. This caused the revitalization stage to begin. Over the last 20 or so years homes and the community have been improved and values have risen. The makeup of Altadena continued to change.

People who make less money have less money and buy and own less expensive homes in less expensive areas. Whites make more money than Blacks, Latinos. The reason is socioeconomic factors and not race. The makeup of Altadena began to change as property values rose. The current census shows the current population is 41% white, 16% black and 28% Latino. Years ago there were more blacks because area was less expensive. Many years ago it was all white. All areas change over time. And to the people spreading the fake conspiracy theory that the Eaton fire was arson to push black people out of Altadena, stop, just stop. Latinos and whites who are the majority also lost their homes.

Property values have been increasing. The median home is now $1.3M. If you bought the median home with average down payment, your mortgage would be $7,200/month. Property taxes would be about $1,400 and insurance $550 for a total of $9,100/month. You'd have to have a gross income of about $30,000 a month to be able to afford that home today. This is why the population has been becoming more white again over time. People buy what they can afford. Blacks and Latinos have been willingly selling their homes to white people for huge profits. The people who complain about home price increases are tenants and not homeowners.

If the median home was worth $1.3M and burned down, you are only left with the land. Land in the area was worth about 70% of the total value before the fire. We have a high land to total value ratio in Southern California. Before the fire that $1.3M home had a land value of $910K. After the fire the land is worth a lot less. The main reason is no bank will finance a loan right now on burned land. There is no fire insurance. That means you'll have to pay all cash. All cash transaction mean a discount of 20% or $728K land value. The land still has to have the debris removed, foundation dug up, top soil removed, toxicity tests on the soil... The utilities also need to be restored to the property and entire area. A lot of the supporting facilities have been destroyed not to mention damage to the streets, signs... This will take 18 months to two years minimum to repair. Time is money because of holding costs. The property will also have stigma for years to come which negatively affects property values.

At this point with clean up costs and all cash purchase only a developer would be able to buy the burned land. They expect a 20% return on investment after all costs and fees. Building homes is a job just like a police officer or teacher has a job that pays wages. This means the land is now worth $546,000. That's about what the recent burned lot in Altadena just sold for. The ex homeowner can sell their property, pay off their mortgage and either rent for a while or buy a new less expensive home, condo.

If the owner of a burned home has a mortgage, they still must pay the monthly mortgage and property tax even if the home burned down. Property tax is .0125% of assessed home value per year. People can have it reassessed after the fire if it burned down. If the homeowner had fire insurance, they could use that money to pay off the mortgage or build a new home. Most fire insurance policies don't give you enough money to build a new home. The depreciated value of the median home before the fire was maximum $350K. Median home size in Altadena was 1,721 sf. Insurance companies generally give you about $100 to $200/sf in Altadena for your home or $172,100 to $344,200. New homes cost more than that to build. I'd say it's about $250/sf today and up to $400sf if you're on a slope or want very good quality. That's $430K to $688K to build a new home. That could be more than double what insurance will give you. Unless you've got a ton of cash sitting around you can't afford to build a new home. You also have to pay for a place to live for two to three years in the meantime besides paying your old mortgage and property tax. No one can afford that. Most can't even afford that in the Palisades fire area.

This is why most homeowners of burned properties are in a very tough position. Unless you have a ton of cash you can't afford to rebuild your home. If you had no fire insurance, you're in an even worse position. I'm sure all of those without fire insurance didn't have it because they couldn't afford it. They at least didn't have mortgages. If you have a mortgage, you must have fire insurance to protect the lender. Generally the fire insurance money is used to pay off the mortgage to the lender. That's why lenders force people to have fire insurance, to cover the bank's investment.

This brings us back to "Altadena is not for sale!" Why the hell not? Do you expect the homeowners to have enough money to pay for their old mortgage, property tax, rent for two to three years and the cost to build a new home? Most in the area can't afford that. This is not a very affluent area based on income. Only developers can afford to buy the land today. The only alternative would be foreclosure by the bank. The bank would then sell it to a developer. Then the homeowner could lose everything. If the homeowner had no loan, the lot would just sit vacant bringing down property values in the neighborhood. The homeowner still has no home in which to live and must pay property tax.

I believe the only people yelling "Altadena is not for sale!" are renters or clueless idiots who don't give a shit about the homeowners. They probably only care that they no longer have a cheap place to live and must pay more or live elsewhere. Maybe some were just living for free with grandma who bought the home many years ago when it was far less expensive. Anyone who cares about the homeowners will tell them to do whatever they want with their own home to protect their investment and money. A lot of the people who lost their homes were older and have no desire to go through three years of construction and stress. Let the homeowners do what is best for them.

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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Cause of Lack of Trees in South Los Angeles, Mary Cummins, Real Estate Appraiser

I just read the LA Times article "Study reveals attitudes about lack of trees in South LA." FTR I live in South Los Angeles in an area that has both a lot of trees and no trees. I choose my walking route based on the streets that have trees that can provide me with sun protection and protection from the summer heat. I can feel the huge temperature difference when I walk the two blocks with no trees to get to the one block with trees. The areas in SLA with trees have nice well maintained homes. The areas without trees have less well maintained homes, apartments, commercial and industrial buildings.

My first issue with the article is it starts off with a very racist comment by an alleged community leader. It's as follows: "Our lack of trees is not an accident or coincidence. It is a result of historic patterns of discrimination, disenfranchisement and racist planning practices." This is false. There is a lot more to the history of South LA and trees. Yes, racism and discrimination exist in Los Angeles but there has never been a policy where no trees were planted in areas because of race.When you automatically accuse everyone of racism and discrimination they are less inclined to want to help. You are attacking the people from whom you are asking for help which makes no sense.

First some history. Originally this land belonged to Native Americans for tens of thousands of years. Later the Spaniards stole the land from the Native Americans calling it New Spain in 1542. Spain claimed the specific area of California in 1769 and Los Angeles was established in 1781. Mexico got their independence from Spain in 1810 and controlled the land. California became a nation in 1846 independent from Mexico. In 1850 California became a US state. California was a free state and didn't have slavery but did have Native Americans and Mexicans.

Southern California was mainly rolling hills with sage scrub and grassland. Most of South Los Angeles didn't have a lot of trees naturally. The area is mainly flat land. It was used for farming because it was flat with few trees. The few trees were near creeks and rivers or in the higher hills. We are in Sunset Climate Zones 18–24. Only very hardy small trees, shrubs grow in the flat areas naturally though we have larger oaks, sycamores, pine trees, fan palm trees... near areas with more water. We are not a forest but a drier desert area without a lot of natural trees.

Around 1880 they started building a lot of homes. Most developments cut down native plants, trees then planted a lot of non native trees around the homes and lining the streets on the parkways. Some still exist today but sadly trees don't live forever so many have died. Many trees were not good choices for our climate, drought conditions so they died. 

From 1880 to 1940 most of South LA was middle class to more affluent. Around 1900 some more expensive developments didn't allow blacks, Mexicans, Indians... The LA Sugar Hill case ended housing segregation in 1945. School segregation ended 1947. Fair Housing Act was 1968. This happened all over the entire US.

Starting around 1945 some people left South Los Angeles and moved to more affluent newer areas. The reasons are because the housing stock was getting older and dilapidated as most homes were built 1880-1920. It was caused partly by the real estate cycle of decline. People wanted to move to newer developments. It was also caused by scaremonger tactics from real estate investors who scared some white people causing "white flight." They were told their properties would be worth pennies once other people such as blacks lived near them. Property values went down and continued to go down as the area fell into disrepair which is called decline in real estate cycles. People weren't maintaining the homes or the trees.

As the property values went down making it more affordable the percentage of blacks, Latinos went up. There is a correlation between income and race. Whites make more money than blacks, Latinos. People who make more money have more money and buy more expensive homes in more expensive areas. This has nothing to do with the Planning Department. Over time more POC lived in these more affordable areas of South LA. Over time the population has become mainly Latino then white then black. LA City Census shows 64% Latino then white, black equally. It varies by poll type and specific area. Little Honduras is more Latino. 

Lower income people tend to live in cheaper smaller homes, duplexes and apartments. For this reason there is a higher density of people in lower income areas. Because of income correlation this means there are more blacks, Latinos in these areas. People buy what they can afford. There are also lots of poor whites here. This explains the people to tree ratio in the Times article. It's not racism but economics 101.

Some people, neighborhoods, cities, organizations would plant new trees as older ones died from age, bark beetles, drought, damage from utility line tree maintenance programs... Those are generally middle income areas and up in Los Angeles. Many times the homeowner, property owner planted a new tree to replace dead ones in front of their property. Legally property owners are responsible for maintaining the parkway and trees in front of their property. That is the little strip of land between the street and sidewalk. People are supposed to maintain the city trees on their parkway though the city will trim it. Many in lower income areas do not maintain the trees on the parkway. Most people are lower income tenants in these areas. Tenants don't maintain anything. Landlords don't live there and don't really care. Not as many are owner occupied homes. Property owners are the main reason there are no living trees on the parkways in those areas. 

Property taxes from specific areas generally pay for city repairs and improvements in those specific areas. These areas have lower values so they have less revenue from property and other taxes. They have less money in their budgets for tree planting. Generally politicians will pass new programs based on what the constituents want. They take polls. The people living in the areas wanted more police protection, general clean up, affordable housing, parks, school improvements... They did not want the few city dollars spent on new trees. It's what they wanted. Tenants and landlords vote equally.

After many years with no new trees planted and older ones dying there are fewer trees in South LA today. Some nonprofits and neighborhood organizations started fundraising to buy and plant trees in South LA. They planted some trees. Many were not watered or cared for and they died. Some were stolen. Others were vandalized. I've seen all of this first hand. I'd replant the ones ripped out by vagrants. I'd water some. I picked up two that were knocked over by cars, replanted and restaked them only for them to later be stolen. I saw someone load one in a truck but he had no license plate so I couldn't report it like that would have done anything anyway.

Some see new trees as a sign of "gentrification" so they destroy the trees which is crazy. Gentrification is just the real estate cycle of revitalization. It's been happening all over the world since the beginning of time. People get pushed out of more expensive areas so they move into adjacent areas which are more affordable. This causes home prices and rents to go up in those areas. Some existing tenants will have rent increases as the area improves. I've found in my area which is mainly Latino that more affluent Latinos are replacing less affluent Latinos. It has nothing to do with race or color but money. It's based solely on economics. In one case middle income Latinos moved into an area of lower income Latinos. The lower income Latinos broke windows, graffiti'd the businesses of the middle income Latinos because they didn't want their rent to rise. What really gets me is the lower income people who own the property are happy as hell to sell for 10x what they paid for it. It's only a few tenants who complain. Since the beginning of time people would just move to another area they can afford but today they protest and blame others and call people racists.

All that said we do need more trees in South Los Angeles and other areas with few trees. The City of Los Angeles has had tree planting programs called "City Trees," "Million Trees LA" for years. They give away free trees all the time. In 2006 the goal was to plan a million trees in a few years. It was not that successful because people didn't care for the trees and they died. They were also not the best trees. I saw one which was a purple potato vine bush pruned into a tree. They are ugly if you don't prune all the time and they provide no shade. I think the tree provider just wanted to make a lot of money off the city.

Any program for new trees must work with the community where they will be planted. People need to sponsor and volunteer to maintain the trees block by block. I can only handle the blocks I walk which is two miles a day. It should probably be a paid group of tree guardians which would also provide some jobs to locals. They need to talk to the homeowners and the homeless people living around the trees. The city, block club, tree group, community organization...can all work to plant and cultivate the trees but if homeless people, vagrants, others steal and destroy them, there will never be enough trees. As areas are revitalized there will be more successful tree plantings.

After I wrote this I took a walk in my area of SLA. I noticed trees were dead in front of apartment buildings, commercial buildings more than homes. Apartment and commercial building owners don't generally live at the property they own. They don't care about trees. They also probably don't realize it's their responsibility to maintain the parkway. No one enforces maintenance of the parkway or trees. One idea to aid in enforcement would be using Google maps street view. You can clearly see if there are trees just looking at the maps. They now even have green colored areas for trees on the maps. Sure Google would write a quick script to get addresses that don't have trees so notices about free trees could be sent with their property tax statements. Or maybe the city can instead of giving away free trees for people to plant on their private property they can go plant some on the parkways where they are missing. They will need to maintain them and should be drought tolerant, hardy and a type of tree people won't want to steal. No one waters the parkway in lower income areas. 

An education campaign about maintaining the parkway might help. Another idea would be to make it mandatory to have a tree of certain species on parkways every so many feet maybe 25'. Average lot is 50 wide so two trees in front of each house away from street signs, utility wires sounds good. One would just have to enforce the tree mandate. If someone doesn't plant or request to have a tree planted by the city or doesn't maintain a tree, they can be fined, have a fee added to their property tax. A professional organization can then be paid to plant and maintain trees. At the last house I owned I added a sprinkler system to my parkway. I also paid an arborist to give me advice to make my tree healthier. 

The problem with my idea is that lower income people will complain about having to pay a fine or do work to plant or maintain a tree. They will scream discrimination and blame it on the "racist" city. I have no faith that anything can be done because the people complaining about lack of trees don't want to do anything about it. They don't even want to maintain the parking strip which is their legal and financial responsibility. After following the tree issues for years I throw my hands in the air on this one.

Here is the LA Times link or you can read it for free via Yahoo news by searching the title. 

https://www.latimes.com/environment/story/2024-10-11/there-is-no-easy-fix-study-reveals-attitudes-about-lack-of-trees-in-south-l-a

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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Promoting People like Julian Glover who Promote the False Narrative of Allegedly Racist Appraisers is Racist and Wrong

Julian Glover was recently on the San Francisco Association of Realtors DEI panel. While I promote DEI (Diversity Equity and Inclusion), BLM, antiracism, civil rights, fair housing ... I don't promote racist people who promote racism. Promoting the false narrative of the allegedly "old white male racist appraiser" who allegedly "lowball blacks, latinos" is racism, ageism and sexism against appraisers besides an outright lie. I say this as a 58 year old female light skinned Latina appraiser.

When Julian Glover was a total unknown small time reporter in Northern California he intentionally sought out and promoted stories about unverified racial bias in real estate appraisal. He publicly stated in writing in the ABC website that people should send him stories about real estate and race. He was officially the "ABC7 News Race and Social Justice Reporter Julian Glover." In his bio linked above he states "In 2021 and 2022 my reporting on discrimination in the home appraisal process and devaluation of Black neighborhoods prompted action by the Biden-Harris administration and spurred legislation in Congress to address longstanding inequities." There was no devaluation of black neighborhoods. His articles didn't prompt the action.  It was George Floyd's death in 2020, BLM and DEI. I followed his stories and did the research as an appraiser with over 40 years of experience as a licensed real estate appraiser and broker in California. 

I would be the first person to go after a racist appraiser which is why I investigated the facts. I initially was like "WTF appraiser did this?!" Then the facts proved the values were market value. If only an alleged reporter would have done the same research and sought out an expert appraiser. Julian Glover didn't because it would have ruined his fake story and path to promotions, media attention and more money. He saw how people loved to get irate over articles about alleged racism. He got a lot of traffic and more ads were sold. It was his ticket to fame and fortune.

Julian Glover didn't even have to seek out an expert, request a review appraisal or request a new historical appraisal. I emailed him my research about the properties and appraisals in question proving they came in at market value, see links below. Just because a POC, anyone gets an appraisal value less than what they want does not mean it's automatically racism. I researched all his stories for a while then started writing my own articles because he never replied or corrected his stories. They're all in this blog.

Julian Glover then worked on the false and misleading televised program "Our America: Lowballed" which has been totally debunked by research and facts. This fake documentary covered all the fake cases which have been proven wrong by independent researchers. I wrote articles about every fake case as did others. Glover promoted the fake paper by Andre Perry. AEI proved Andre Perry's paper was false and incredibly misleading. White owned homes aren't worth more than black, Latino owned homes because "racist" appraisers went out and lowballed blacks, Latinos to "steal" their money. There weren't even any appraisers, appraisals involved in Andre Perry's values. They were done by robots, software programs specifically Zillow. Zillow is extremely inaccurate. Even Zillow states it's not an appraisal and not be relied upon for anything.

Here are the facts. Whites make more money than blacks, Latinos. People who make more money have more money. People who have and make more money buy more expensive homes in more expensive areas. That's why most white owned homes are worth more than black, Latino owned homes. Whites also own more expensive cars. Maybe people should sue "racist" Kelly Blue Book and CarMax. The issue is the income gap. Appraisers have nothing to do with the income gap. Neither does the housing industry. You can yell at, sue, be racist to appraisers all day long and it won't change anything. Fix the income gap and you'll fix the wealth gap!

Julian Glover, Andre Perry, ex HUD Marcia Fudge, Jillian White, Junia Howell and others have promoted these false racist narratives for their own agendas. Their agendas are to promote themselves and make money which they did. They were promoted and now receive more money for books and speaking engagements. Now they're even DEI "experts!" If I were as unethical and racist, I too could write a book, article, make a video about how all "races" other than Latinos are "racist" and lowball Latinos. I won't because I'm not a lying, unethical, racist person. How do these people live with themselves? They claim they want to fight racism yet they are the ones who are racist and inciting others to also be racist. 

Here are the fake Julian Glover articles I covered. Someone probably saw a high Zillow value not realizing Zillow isn't accurate. When you have an older smaller home in fair condition Zillow value will be much higher than actual because it's averaging values of all homes in the area. Below are some of Julian Glover's fake articles and the Lowballed program I covered. I know I covered at least two more. I'll try to find them.

Cora Robinson

https://mary--cummins.blogspot.com/2021/07/racial-discrimination-alleged-by-cora.html

Shaheed

https://mary--cummins.blogspot.com/2021/06/alleged-racial-discrimination-case-in.html

Lowballed which I did finally watch

https://mary--cummins.blogspot.com/2022/10/abc-will-be-airing-false-misleading-our.html

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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HUD Bias Complaint Against Appraiser by Mary Cummins Real Estate Appraiser

UPDATE 01/09/2024 The appraiser involved in the case just had their license revoked. The revocation doesn't appear to have anything to do with bias, discrimination, malpractice or the original complaint. It was for a license violation. The press release is not that clear. It states there were allegedly other appraisers and non appraisers allegedly doing appraisals or signing appraisals. Some may have been from out of the country. I don't know if this is a mentor situation or what. I see two license numbers but only one exists. Someone just told me it was a trainee issue along with out of the country report writer. This is why I always say NO to trainees and out of country assistants. The press release also says "personal property auction" and this is real estate appraisal. 

When one is investigated for a complaint HUD asks for ALL appraisals in last year or some time period. They review them all. It appears to me they were looking for something, anything if they couldn't find discrimination. Discrimination is almost impossible to prove. I believe if there were discrimination they could prove, they would have released that news instead. Everyone, make sure every single report is as perfect as can be. Never use those cheap assistants in India or anywhere else. If this involves a mentor, consider the risks of mentoring before becoming a mentor. I would never be a mentor for a million reasons. Legal liability is just one of those reasons. You have nothing to gain and everything to lose. 

12/05/2024: Rocket Mortgage just sued HUD in a new lawsuit 24-cv-03368. They claim they are not responsible for third party AMCs and appraisers. The DOJ provided the borrower named of Francesca Cheroutes. Rocket gave Francesca Cheroutes two chances to do a Reconsideration Of Value ROV or appraisal appeal. She declined. The address provided by DOJ is 749-751 Ash Street, Denver, Colorado. Owner lives in one unit and rents out the other. 

Rocket Mortgage's main argument is that Rocket did not have a duty to "correct" the appraisal. Appraisers, AMCs are independent third parties. The government is the one that mandated that appraisers, appraisals be independent. They don't want lenders pressuring appraisers. Legally Rocket is not allowed to "correct" an appraisal. They are not allowed to even try to influence an appraiser, appraisal per the law. They further argue that they told borrower they could send in an ROV to the AMC which gives it to the appraiser but borrower refused. Failure to mitigate a claim. Lender can't send in the ROV. I agree with Rocket Mortgage.

*Everything in this article is based on public records such a building records, public MLS/rent listings, the public filed lawsuit and the public DOJ report. 

Per DOJ, borrower and Zillow subject is two units, six beds, four baths, 3,550 sf and each unit is two floors. That's almost double the actual finished GLA and bed/bath count. The units are 2 beds, 1 bath 1,500 or so sf total with full basements which are not 100% finished. There is one floor and a basement level. Credit was given for the basement. Duplex comps with similar basements used. This is an area where properties would all have full basements. Zillow/Trulia value today December 2024 after three years of appreciation $826,000 based on 6+4 3,500 sf. Then I doubt it was worth $860,000 in January 20, 2020. RedFn says $797,000 with same wrong bed/bath. I obviously put no weight in Zillow, RedFn values. Clearly the borrower wanted the incorrect Zillow bed/bath count and value. Borrower claims she had a no inspection "valuation" March 2022 for $885,000. Sounds like an AVM or free broker CMA BPO for listing which would be higher than market value.

Multifamily properties are different than SFR. They generally include GBA Gross Building Area. That can include other areas if it's 100% finished. The most important thing is to compare apples to apples. In this area most duplexes, SFRs have full basements. Some are finished, some have "legal" beds/baths and some don't. The appraiser used similar comps and included basement adjustments. 

I did not do the original appraisal. I live in an area where basements and especially full basements are very uncommon in Los Angeles, California. They are never in GBA of 2-4 units. They are generally never 100% finished. At most they are crawl spaces or small utility basements. We have/had a high water table and basements would flood which is why we don't have them. Most of them have no windows or legal exits from all rooms. You need a legal sized window exit from bedrooms to legally be a bedroom. You don't want to get trapped in there in a flood or fire. 

It turns out the black female attorney was happy with a few previous refinances of the property. They still have their mortgage with Rocket including the servicing. They didn't go get another loan with a new lender. This appears to be another false claim of bias and discrimination. This woman filed complaints in a few places. Read the documents and come to your own conclusion.

Per DOJ January 2021 $640,000 appraisal value. Appraisal from previous year was allegedly $860,000. It appears the previous value was perhaps too high. Francesca lied to the DOJ about requesting a reconsideration of value. She didn't request one. She should have requested a ROV. Then the issue of GLA, GBA could have been clarified. Borrower stated she merely complained about racial discrimination and demanded a higher value. It would have taken her half an hour to submit a ROV. She should have done that. Failure to mitigate damages, if there were any damages. We also don't know if her credit score, debt ratio, income levels, job history, judgments, liens, payment history ... affected her credit rating. There are many reasons to be denied a loan. The appraisal value is just one of them. If you have great income, great credit, little debt, long time job history ... a lower appraisal value wouldn't matter as much especially as this is owner occupied. 

Here is the property per Zillow with size of 3 bed, 2 bath1,550 sf. That value is $557,000 today. It shows only one unit. The actual units are about 2 bed, 1 bath 700-800 sf GLA each with additional basement. One place even lists this as four units. I think they took the data from a rental offering of one unit. See how inaccurate Zillow can be.

https://www.zillow.com/homedetails/749-N-Ash-St-Denver-CO-80220/2067840283_zpid/?

Zillow value adding basement. It shows two units adding basements to first floor. Basement was given credit in the appraisal. There were no beds, baths in the basement per original appraisal. It's just laundry, exposed water heater, exposed furnace, electrical outlet on outside of wall, pipes on outside of ceiling. Maybe the owner has since updated the basement. It's listed as full basement but not 100% finished.

https://www.zillow.com/homedetails/749-751-Ash-St-Denver-CO-80220/2054732090_zpid/

Property data https://www.denvergov.org/property/realproperty/summary/0606314009000/

One unit was offered for rent for $3,000 October 2024. Looks like it had upgrades in 2022. It was previously listed for $3,500 then $3,400 then $3,200.  It states recent renovations. https://www.trulia.com/home/749-n-ash-st-denver-co-80220-2067840283

One unit was offered for rent for $2,800 November 2021. You can see the basement level. Photo from that listing. Half size windows so a lot less light. Legal basement egress windows must be at least 24 inches tall and 20 inches wide. I can't tell if that is 24 inches but maybe it isn't. The window must be minimum 5.7 sf area and no more than 44" off the floor. Again, it may not be big enough. As I look at interior, exterior photos I don't know if the windows meet those minimums. People need to be able to escape in a fire or flood. I don't see the current basement bedroom windows. These pics are recent after a remodel with new carpet, paint... I see exposed plumbing, electrical so not 100% finished. I see some wonkiness in an interior wall under the window which looks like water damage. Again, I'm not the appraiser and haven't seen the property.
https://www.zumperrentals.com/apartments-for-rent/12060314p/3-bedroom-hale-denver-co?gallery=#media-447399980

Here is the racial bias accusation. She had a Black Lives Matter BLM sign on the property and appraiser walked by it. Sounds like the woman just wanted the lender to give her a higher value so she could refinance her loan again. She may have tried to go to another lender with another appraisal and that appraisal was probably also low so she didn't refinance. Perhaps she was able to pressure the previous appraiser. It sounds like she was trying to pressure the appraiser in this case. 

 https://www.prnewswire.com/news-releases/rocket-mortgage-sues-united-states-department-of-housing-and-urban-development-302323839.html

Link to the complaint.

https://drive.google.com/file/d/1YY7L-lJ-8nQBsBEJA9H7U-K0Y1i3deWP/view?usp=sharing

Below is the court docket for the current case.

U.S. District Court - District of Colorado

District of Colorado (Denver)

CIVIL DOCKET FOR CASE #: 1:24-cv-03368-REB

Rocket Mortgage, LLC v. United States Department of Housing and Urban Development

Assigned to: Judge Robert E. Blackburn

Cause: 05:0706 - Judicial Review of Agency Action

Date Filed: 12/04/2024

Jury Demand: None

Nature of Suit: 899 APA Review/Appeal

Jurisdiction: U.S. Government Defendant

Plaintiff

Rocket Mortgage, LLC represented by Angelica Rankins

Goodwin Procter LLP

1900 N Street NW

Washington, DC 20036

202-346-4000

Email: 

ATTORNEY TO BE NOTICED

Brooks R. Brown

Goodwin Procter LLP

100 Northern Avenue

Boston, MA 02210

617-570-1000

Email: 

ATTORNEY TO BE NOTICED

Keith Eric Levenberg

Goodwin Procter LLP

1900 N Street NW

Washington, DC 20036

202-346-4000

Email: 

ATTORNEY TO BE NOTICED

Jeffrey Brian Morganroth

Morganroth & Morganroth, PLLC

344 North Old Woodward Avenue

Suite 200

Birmingham, MI 48009

248-864-4000

Fax: 248-864-4001

Email: 

ATTORNEY TO BE NOTICED

V.

Defendant

United States Department of Housing and Urban Development

Date Filed # Docket Text

12/04/2024 1 COMPLAINT against United States Department of Housing and Urban Development (Filing fee $ 405,Receipt Number BCODC-10018454)Attorney Jeffrey Brian Morganroth added to party Rocket Mortgage, LLC(pty:pla), filed by Rocket Mortgage, LLC. (Attachments: # 1 Civil Cover Sheet, # 2 Summons, # 3 Summons, # 4 Summons)(Morganroth, Jeffrey) (Entered: 12/04/2024)

12/04/2024 2 CORPORATE DISCLOSURE STATEMENT identifying Corporate Parent Rocket Companies, Inc., Corporate Parent Rocket, LLC for Rocket Mortgage, LLC. (Morganroth, Jeffrey) (Entered: 12/04/2024)

12/04/2024 3 NOTICE of Related Cases by Plaintiff Rocket Mortgage, LLC (Morganroth, Jeffrey) (Entered: 12/04/2024)

12/04/2024 4 NOTICE of Entry of Appearance by Brooks R. Brown on behalf of Rocket Mortgage, LLCAttorney Brooks R. Brown added to party Rocket Mortgage, LLC(pty:pla) (Brown, Brooks) (Entered: 12/04/2024)

12/04/2024 5 NOTICE of Entry of Appearance by Keith Eric Levenberg on behalf of Rocket Mortgage, LLCAttorney Keith Eric Levenberg added to party Rocket Mortgage, LLC(pty:pla) (Levenberg, Keith) (Entered: 12/04/2024)

12/04/2024 6 NOTICE of Entry of Appearance by Angelica Rankins on behalf of Rocket Mortgage, LLCAttorney Angelica Rankins added to party Rocket Mortgage, LLC(pty:pla) (Rankins, Angelica) (Entered: 12/04/2024)

12/05/2024 7 Case assigned to Judge Robert E. Blackburn. Text Only Entry. (agryan) (Entered: 12/05/2024)

12/05/2024 8 SUMMONS issued by Clerk. (Attachments: # 1 Summons, # 2 Summons, # 3 Magistrate Judge Consent Form) (agryan) (Entered: 12/05/2024)

DOJ case which lists name of owner and address. We now have address, values and dates.

https://www.justice.gov/opa/media/1374081/dl?inline

Below is heading of DOJ v Rocket case 24-cv-02915 Denver, Colorado. Francesca is listed as a Plaintiff intervenor with attorney andy@newman-mcnulty.com So far the case was reassigned a few times then Rocket filed the Motion to Dismiss 12/04/2024. Below is Francesca's complaint. Francesca publicly shared her identity and home address. She shares misinformation and articles about the false narrative of the alleged "racist white appraiser" in her complaint. October 2024 USA Today, NY Times mentioned her in their articles about the case. Here is one article with a photo of Francesca. She shared this information publicly so she is legally liable for defamation. There is no litigation privilege when you share false information publicly. This is why the Maryland appraiser sued the property owners. https://www.nytimes.com/2024/12/06/realestate/rocket-mortgage-lawsuit-appraisals.html

https://drive.google.com/file/d/1REwJ4TECl1g_1JzcVytpBAMK3i6k2hTw/view?usp=sharing

U.S. District Court - District of Colorado

District of Colorado (Denver)

CIVIL DOCKET FOR CASE #: 1:24-cv-02915-GPG-TPO

USA v. Rocket Mortgage, LLC et al

Assigned to: District Judge Gordon P Gallagher

Referred to: Magistrate Judge Timothy P O'Hara

Cause: 42:3612 - Civil Rights in Housing -- Enforcement by Secretary

Date Filed: 10/21/2024

Jury Demand: Plaintiff

Nature of Suit: 440 Civil Rights: Other

Jurisdiction: U.S. Government Plaintiff

Plaintiff

As I read the DOJ complaint the borrower believed maintenance items were improvements. They also did the craziest "appraisal" math using cost per bedroom of final value to give value to basement areas. They used average price per square foot of Denver area, average appreciation...many things an appraiser would not use. They mention the 10, 15, 25% guideline adjustments. Those are not mandatory. The issue was she could not refi her apx $550K loan with a value under $860K. Borrower does mention GLA, GBA issue. She complained about racial discrimination but did not file a ROV even when offered twice. She should have filed a ROV to deal with her issues. 

ORIGINAL 07/16/2024: "HUD Charges Appraiser, Appraisal Management Company, and Lender with Race Discrimination WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) announced today that it has charged multiple entities with housing discrimination for issuing a biased appraisal and then denying a refinance loan application in Denver, Colorado. HUD’s Charge against the appraiser, M* M*; appraisal company, M* Appraisal Group; appraisal management company, Solidifi U.S. Inc.; and lender, Rocket Mortgage, LLC, alleges that the appraiser issued a discriminatory appraisal that undervalued a Black homeowner’s property on the basis of her race. The Charge further alleges that, when the homeowner complained to Rocket Mortgage, Rocket Mortgage would only proceed with her refinance loan application based on the appraised value that she alleged was discriminatory."

This is the first complaint HUD has investigated in years. The lack of finished investigations is probably one reason why Marcia Fudge was shown the door. As usual there is no property address or borrower/owner name so we can't ascertain if the appraisal values were accurate or not. Of course there are no appraisals just values and dates. When we know the name or address we appraisers have been able to tell if the appraisal values were accurate or not. This is intentional so the public will never know and we must just believe the HUD press release. 

This case sounds a lot like the Oakland case. Sounds like an area going through revitalization. Some homes are fully renovated and some are not. Values vary greatly based on specific location and condition per the data we have. HUD again brings up race of area. Appraisers never look at census records or race data. Race of area is from census records. Census has to do with who lives there and not who owns the property. There is the race income wealth correlation which means areas with more white occupants are probably worth more because they are probably fully renovated and in slightly better locations. This is an assumption based on research which shows white areas are worth more than black or Latino areas. I really wish they'd include the address so we wouldn't have to just guess and speculate. We will probably never know but based on my experience the higher ones are generally wrong. Lower ones are generally correct.

I predict the lender, AMC will settle for a slap on the wrist without admitting or denying guilt. They'll release a press release saying that have always been and always will be committed to fair housing. The appraiser will sadly settle without paying money because he can't afford to litigate. He will be forced to watch the mockumentary Lowballed strapped to a chair and attend a bias class by a private fair housing organization who was a friend of ex HUD chief Marcia Fudge. HUD will release news of the settlement stating they are helping POC obtain fair housing and loans. No one will ever know which appraisals were correct and which were not. No problems are solved. No one is helped. Things haven't changed. The PAVE task force was just a lot of talk and more administrative paperwork for lenders and appraisers.

https://www.hud.gov/press/press_releases_media_advisories/HUD_No_24_181

The charge 

https://www.hud.gov/sites/dfiles/FHEO/documents/Charge_08-21-3530-8.pdf

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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Important Alleged Discrimination Case Against Wells Fargo, Comment by Mary Cummins

wells fargo, racial discrimination, lawsuit, cv 00990, mortgage discrimination, mary cummins, real estate appraiser, real estate appraisal, credit, black, latino, white,complaint

Peter Christensen just wrote an article about this very important legal case. Wells Fargo is being sued for racial discrimination for rejecting mortgages of some black, Latino applicants. The lawsuit is based on appraisals and credit. They cite Andre Perry's false and misleading paper as evidence. This looks like a shakedown lawsuit to get WF to cough up a few bucks "without admitting guilt." This is what the false narrative of the alleged racist appraiser and real estate industry has given us. The government promoting the false narrative for their political agenda has caused this frivolous lawsuit. We all know based on AEI's research that blacks, Latinos are more likely to be rejected for loans based on socioeconomic factors and appraisal value. Blacks, Latinos have less income, less wealth, lower credit scores which is why they buy less expensive homes in less expensive areas. 

"In March 2022, Bloomberg News published an article entitled “Wells Fargo Rejected Half Its Black Applicants in Mortgage Refinancing Boom” (registration required). Bloomberg’s researchers had combed through the data for 8 million conventional loan refinance applications in 2020 reported by lenders under the Home Mortgage Disclosure Act. The researchers saw stark differences in Wells Fargo’s approval rates for White, Black and Hispanic refinance applicants. They found that Wells Fargo approved 72% of applications from White applicants but only 47% from Black applicants. In contrast, Rocket Mortgage approved 86% of White applicants and 79% of Black applicants. For Hispanic borrowers, Wells Fargo’s approval rate was 53% versus a 79% industry average for Hispanics. Some might jump to an explanation here like “Black and Hispanic borrowers may not have the same average financial means as Whites.” Bloomberg’s research, however, showed that Wells Fargo’s approval rate was lower for Blacks in high income brackets than for Whites in low brackets.

After publication of the article, a half-dozen class actions were filed swiftly against Wells Fargo by Black and Hispanic borrowers who had been denied loans. The Federal District Court in Northern California consolidated these cases earlier this year under the new title In re Wells Fargo Mortgage Discrimination Litigation, U.S. District Court, N.D. Cal., Case No. 3:22-cv-00990.

The primary legal claims in the consolidated case are brought under the federal Fair Housing Act and Equal Credit Opportunity Act. And, the alleged damages could be substantial – borrowers denied loan refinances in 2020-2021 may have lost out on saving tens of thousands of dollars on their mortgages by being unable to lock in historically low interest rates. The operative complaint in the case principally alleges a story about disparate treatment and impact in Wells Fargo’s mortgage determinations, including the bank’s use of flawed “centralized, universal, race-infected lending algorithms” or “digital redlining.” But part of the plaintiffs’ theory is also based on alleged bias in the appraisals relied on by the bank.

Here’s a key allegation pertaining to appraisals:

Wells Fargo knowingly incorporates, without adjustment, appraisals that have been shaped by years of race-based valuation standards or appraisals affected by race-based criteria. Homes in majority Black neighborhoods are worth an average of 23% less than homes in neighborhoods with “very few or no Black residents” and of similar home quality. (Citing Dr. Andre Perry’s research at Brookings “The Devaluation of Assets in Black Neighborhoods.”).

As a result, the plaintiffs allege that “Wells Fargo’s discrimination . . . has forced those who received below-market appraisals from Wells Fargo to abandon the process with Wells Fargo and turn elsewhere.”

"Plaintiffs Aaron Braxton, Paul Martin, Gia Gray, Bryan Brown, Elretha Perkins, Christopher Williams, Ifeoma Ebo and Terah Kuykendall-Montoya, individually and as representatives of a nationwide class of similarly situated applicants for original purchase mortgage, refinance and other home mortgage loans (collectively, “Plaintiffs” or the “Class”), 

Go to the below link for the rest of this important article and lawsuit.

https://www.valuationlegal.com/2023/08/the-most-significant-appraisal-discrimination-case-doesnt-name-an-appraiser-as-a-defendant/

Copy of lawsuit from same site.

https://www.valuationlegal.com/wp-content/uploads/2023/08/In-re-Wells-Fargo-Discrimination-Amended-and-Consolidated-Complaint-Fair-Housing-ECOA-3-24-23.pdf

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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AEI Report Shows Andre Perry's Paper is Fraudulent. Same Difference in Home Values in White Areas.

This is from an email from Jeremy Bagott, MAI. AEI used Andre's Perry own dataset and methodology to study race and home values.  February 2023 the report was updated. Andre Perry previously stated the main difference in home values between white and black is race alone. Perry blamed that on home valuations. AEI's research has proven the main difference is caused almost entirely by socioeconomic factors and not race. I've been yelling this from the mountain tops since Perry's paper first came out but AEI has nailed it down with facts and independent research. People who make more money have more money and buy more expensive homes in more expensive areas, period. 

Maybe lower income white people should be yelling about home value differences compared to higher income white and black people. Maybe they should be demanding money, free homes, cheap loans, debt relief like Andre Perry and his following have been doing. "Rich white people have stolen $46,000 from every poorer white person's home value in the US!" Maybe all poor people need their own type of reparations for being trapped by low wages and poverty for generations. It won't solve the problem because the income gap is the main cause for everyone but the story will probably sell online media ads. We need to reduce the income/wealth gap among everyone. AEI stated this in their summary but the government will not listen to facts for some reason on this issue.

https://mailchi.mp/0b513ed845f9/report-finding-of-bias-in-home-valuations-fails-by-own-measure-8037698

"REPORT: FINDING OF BIAS IN HOME VALUATIONS FAILS BY OWN MEASURE

VENTURA, Calif. (August 11, 2023) – In an updated refutation of the findings of Brookings Institution researcher Andre Perry, Edward Pinto and Tobias Peter of the AEI Housing Center demonstrated just how broken the Brookings research was.

Perry’s 2018 research, titled “The Devaluation of Assets in Black Neighborhoods,” pinned the nation’s racial wealth gap on 80,000 state-licensed real property appraisers.

Unfortunately, these now-discredited findings have been levered by housing-industry lobbyists, partisan policymakers, agitators and grievance groups to malign the nation’s 80,000 real property appraisers and hollow out America’s mortgage underwriting safeguards.

A dataset provided to Pinto and Peter earlier in the year by Perry allowed the AEI Housing Center to fully refute the latter’s conclusions.

While their original refutation was still largely correct, Pinto and Peter have now updated their key findings and takeaways using the new dataset. To the surprise of no one, their redacted study found that what Perry et al. had characterized as race-based differences in home valuations were almost entirely due to socio-economic status, not racial bias by real estate appraisers.

Using the dataset and Perry’s own methodology, Pinto and Peter created a simple case study of so-called “entirely white” tracts (tracts demographers rate as 97.5% white or greater). In those tracts, racial animus, by definition, is ruled out as a factor. The duo then compared high and low socio-economic status in these so-called all-white neighborhoods and found differences as large as – or even larger than – the ones Perry et al. incorrectly attributed to racial bias.

But much damage has been done by Perry’s now-discredited findings. Perry’s 2018 report took the nation’s real property appraisers from the table and onto the menu. The flawed findings have most recently served as a pretext to justify the current administration’s whole-of-government effort to insert race into every corner of the mortgage underwriting process, including collateral valuation.

Pinto and Peter determined:

• That while lower socio-economic status may leave blacks at a large income (and wealth) disadvantage relative to most whites, this is not due to any statistically relevant bias in home appraisals

• The primary remedy would be policies that work to address the income and wealth gap, not those that scapegoat appraisers.

• The focus should be on increasing financial security, creating generational wealth, and shrinking the socio-economic gap through sustainable home ownership. This is largely a buying power issue, not a valuation one. To do otherwise risks repeating the mistakes of the past."

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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AEI Response to PAVE Task Force AVM. Appraisers Are Not Racists and Don't Lowball Blacks, Latinos, comments by Mary Cummins

UPDATE 11/03/2023AEI proves once again that HUD, US Government lied about appraisers allegedly low-balling people of color. This is exactly what appraisers have been saying all along. "We find that seemingly large differences in the share of under-valuations–appraisals where the appraised value is below the contract price– received by people of color are almost entirely or entirely due to differences in geographies where people, regardless of race or ethnicity, reside. When comparing appraisals for people of color to those for non-Hispanic white people within the same census tract, we find that there are no or minimal differences.

This analysis suggests that commonalities in people’s experiences in buying a home (e.g. first-time home buyer status) or local market conditions (e.g. the presence of a market frenzy or seller concessions) are far more important than differences in people’s race or ethnicity when it comes to determining who receives an under-valuation and who does not. This suggests that studies by FHFA, Brookings, or Freddie Mac with their singular focus on appraiser racial bias have misdiagnosed the issue." #AEI #americanenterpriseinstitute #marycummins #realestateappraiser #realestateappraisal #HUD https://www.aei.org/research-products/report/confirming-alternative-explanations-for-appraisal-under-valuations-new-evidence-from-appraisal-level-data/

ORIGINAL: American Enterprise Institute (AEI) made some important independently researched statements in their comment letter about the PAVE Task Force, AVMs and real estate appraisers. It shows with verified facts the flaws in the research cited by PAVE. The research cited by PAVE was poorly done by the Urban Institute, Andre Perry then twisted to meet the agenda of UI, Perry. I have no issues with promoting the interests of black people. I'm Latino and promote the interests of Latinos, Blacks, Asians, women, lower income, homeless... I do have a problem with people falsifying research to promote an agenda with racist lies which hurt innocent people. Below are a few important issues raised in AEI's comment letter to the PAVE Task Force.

1. AEI stated First Time Buyers (FTBs) tend to overpay for properties. There are also more seller concessions. This would explain appraisals being at market value which is lower than contract price. I see this all the time because I appraise in these areas. It's not the result of biased, racist appraisers.

Urban Institute, HUD, PAVE stated that "racist old white male" appraisers were intentionally low balling blacks and Latinos. Their "proof" was a difference in contract price and appraisal values in census tract areas with more Blacks, Latinos. I'd commented at the time it was probably because there is a correlation between race and income. Whites make more money than blacks, Latinos. People who make more money have more money and buy more expensive homes in more expensive areas. Areas which are predominantly black, Latino are lower income areas with many first time buyers. 

"The presence of first-time homebuyers (FTBs) or the use of seller concessions could affect the sale price relative to the AVM. Our analysis in “Exploring Alternative Explanations for Appraisal UnderValuation” shows a significantly higher share of FTBs in tracts with lower levels of non-Hispanic White residents. This is significant because the literature shows that FTBs tend to overbid for a home by approximately $3,000, or about 1% of the contract price for the average home compared to repeat buyers and that they use a higher share of seller concessions, which can amount to 2.01-3% of the property price."

2. The letter noted that homes in lower priced areas that are more likely to be predominantly black, Latino are generally in lower rated condition which would be C4, C5 rating as opposed to C3 and above. I see this every day in my inspections of these areas. Again, it has to do with money. The more money you have, the more you will spend to properly maintain and upgrade your home.

"Even though the paper controls for home quality as measured by an exterior condition rating, we found in other work that exterior condition ratings can be quite different from interior condition ones. We also found that home interior quality can be a significant factor in the difference between an AVM and a home’s sale price and that for a small number of properties with extreme conditions that difference was significant."

3. The letter also again stated that AEI found no effect of race on appraisal value. 

"We have pointed out serious flaws in numerous studies that purport to show widespread appraiser bias or systemic devaluations of neighborhoods." https://www.aei.org/research-products/report/exploring-alternative-explanations-for-appraisal-under-valuation/

They suggest "To better measure and document appraiser racial bias, we once again propose reviewing every appraiser for racial bias and deliberate inaccuracies based on a comprehensive review of their past refinance appraisals. To that end, we have demonstrated a working methodology in “A Blueprint for Mass Screening Appraisers for Racial Bias and Inaccuracy Based on an Atlanta, GA Study” that could be implemented today by either FHFA, Fannie Mae, or Freddie Mac.Ultimately, the goal of public policy should be to identify biased and inaccurate appraisers and to prosecute the former and to educate and retrain the latter."

I fully support this. Please, fairly audit everyone's appraisals. I'd be the first to take racist appraisers out behind the woodshed. Take away their license, charge them with actual crimes and send them to prison. Stop blaming every appraiser for racism and bias. What really irks me is that these people are claiming racism and bias when they are doing exactly that to real estate appraisers. If you're against racism, bias, you should be against ALL racism or bias against everyone or else you're a hypocrite.

https://www.aei.org/research-products/report/a-response-to-the-recommendations-of-the-pave-working-group/

https://www.aei.org/wp-content/uploads/2023/08/A-Response-to-the-Recommendations-of-the-PAVE-Working-Group-FINAL-1.pdf?x91208

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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Fed Michael Barr: AI could 'perpetuate or even amplify' racial bias in mortgages, by Mary Cummins

Michael Barr of the Federal Reserve stated artificial intelligence AI could perpetuate or even amplify racial bias in mortgages, mary cummins, real estate appraiser, real estate appraisal, los angeles, california, michael barr, racial bias,federal reserve, fed, loan origination, race, black, white, bias

Artificial Intelligence (AI) is now being accused of racial bias. They're basically stating math, statistics, numbers themselves are racially biased. Again, the correlation between race and home value is caused by the income gap. If you have less money, you buy a less expensive home. Same with credit scores. The less money you have, the lower your credit score. POC make less money than whites. I'm just glad they're not still falsely accusing appraisers of AI's bias like they did previously with Andre Perry's fraudulent paper. No appraiser was involved in his data only robot Automated Valuation Methods (AVMs) which were basically accurate.

https://www.americanbanker.com/news/feds-barr-ai-could-perpetuate-or-even-amplify-bias-in-mortgages

"Fed's Barr: AI could 'perpetuate or even amplify' bias in mortgages

By  Kyle Campbell

Michael Barr, vice chair for supervision at the Federal Reserve, said in a speech Tuesday that artificial intelligence in mortgage underwriting could exacerbate racial bias if left unchecked.Bloomberg News

The Federal Reserve's top regulator is wary of the use of artificial intelligence in mortgage underwriting. 

Speaking at the National Fair Housing Alliance's national conference Tuesday morning, Fed Vice Chair for Supervision Michael Barr said advancements in mortgage origination technology could lead to discriminatory lending practices."

Just did some Googling on racial bias in loan origination. 98-99% of the difference in loan origination between blacks, whites explained by credit scores and leverage. Did they consider LTV on the home or all debts? There's more to credit than credit score and LTV ratios. They include savings, how long at current job, debts, monthly financial responsibilities, single vs married, children... AEI research considered those factors.

"How much does racial bias affect mortgage lending? We assess racial discrimination in mortgage approvals using new data on mortgage applications. Minority applicants tend to have significantly lower credit scores, higher leverage, and are less likely than white applicants to receive algorithmic approval from race-blind government automated underwriting systems (AUS). Observable applicant- risk factors explain most of the racial disparities in lender denials. Further, we exploit the AUS data to show there are risk factors we do not directly observe, and our analysis indicates that these factors explain at least some of the residual 1-2 percentage point denial gaps. Overall, we find that differential treatment has played a limited role in generating denial disparities in recent years."

https://www.federalreserve.gov/econres/feds/how-much-does-racial-bias-affect-mortgage-lending.htm

I'm thinking this is just showboating for political reasons. The banks, credit unions don't want to give up credit scores. They correlate highly with ability to repay loans. 

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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