HUD Charges Appraiser, AMC, and Lender With Discrimination


On July 15, 2024, HUD charged an appraiser, an appraisal management company, and a lender with housing discrimination for allegedly issuing a biased appraisal and then denying a refinance loan application in Denver, Colorado.

In the Charge of Discrimination (“the Charge”), HUD alleges that the appraiser prepared an insupportably low appraisal of a duplex owned by a Black woman in a predominantly White area. HUD also cited two previously existing appraisals of the same property that were higher and had consistently increased in value, yet the appraisal the defendant prepared was dramatically lower, despite the Denver market experiencing sizable growth in home values at that time.

HUD asserts that the low appraisal contained numerous inaccuracies and unsupportable methodological choices (such as relying on comparable properties in neighborhoods with greater Black populations and excluding potential comparable properties in neighborhoods with greater White populations) that not only artificially lowered the appraised value but deviated from the appraiser’s own methodology and findings about the relevant neighborhood in appraising similar, nearby properties with White owners. The Charge also states that neither the appraisal management company nor the lender caught any of these inaccuracies upon review and that the mortgage company dismissed the complainant’s concern that the extent of the inaccuracies coupled with the low appraised value could indicate discrimination.

In March of 2023, NAR wrote to HUD requesting that it completes its review of cases alleging discrimination in valuation with due haste so NAR could use the guidance to create best practices, training and education. This is the first case HUD has ruled on, and we look forward to further decisions and guidance as we move forward.

Review HUD’s Press Release



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