Maryland Commission on Civil Rights and the SCREA Unite to Address Discriminatory Housing Appraisals
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The Maryland Commission on Civil Rights (MCCR) and the MD State Commission of Real Estate Appraisers, Appraisal Management Companies, and Home Inspectors (SCREA et.al.) announced an interagency cooperation regarding fair housing issues and complaints as they relate to real estate appraisals. The main goal of this agreement is to better enforce Title 20, Subtitle 7 of the Annotated Code of Maryland as it pertains to appraisal bias.
Recent research suggests that there are racial and ethnic differences in home valuations. According to the Federal Housing Finance Agency’s 2021 appraisal statistics, 23.3% of homes in high minority tracts (80.1-100%) experienced undervaluation. This is compared to 13.4% of homes in White tracts (0-50%) and 19.2% in minority tracts (50.1-80%). Bias plays a major factor in this statistic. While home appraisals are supposed to be independent, fair and objective estimates of market value so lenders can accurately evaluate risk, the results depend upon the appraiser’s expertise and familiarity with the neighborhood. The appraisal industry remains one of the country’s least diverse professions; 98 percent of appraisers are White, according to the U.S. Bureau of Labor Statistics.
“This is one of the major economic barriers that prohibit people of color from gaining generational wealth,” said Cleveland L Horton, II, Deputy Executive Director of MCCR. “By MCCR and SCREA et.al. formally working together, we can improve the appraisal process and create an equitable system that can be used to lift all Marylanders up the proverbial economic ladder.”
A formal memorandum of understanding solidifying this interagency cooperation between MCCR and SCREA will be signed on February 26th @ 10 a.m. in MCCR’s headquarters (6 St Paul Street, Suite 900, Baltimore MD 21202.)