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The AC Phoenix March 2003 Page 3 ly/VTfL JUSTICE Rams Do own APPRAISERS *STEAL VALVE* By Rodney Sumler A recent article in Knight Ridder/Tribune, outlined the practice of ‘pushing value’ imposed on some appraisers when appraising the value of real estate. The opposite is the case in too many black neighborhoods. Too many appraisers ‘steal value’ from black property owners. Black Americans are spending 500 billion dollars every year on everything from houses, cars, clothing, entertainment...you name it. But our biggest investment is our greatest example of economic injustice— housing and its true value. How much equity do you have in your home, if you are a home owner? Since the Depression, appraisals have been used to reassure a lender that a property can be resold if the borrower defaults on the mortgage. But black homeowners who have an ounce of knowledge on property value, knows that their property is routinely under valued. Appraisers report being pressured to “make value” in about 5 percent of the deals—appraisals they do, often in refinancing and “for saie by white owner” deals. They blame lenders who control the ordering and review of appraisals. Who can the black home owner blame? Is it racism? Appraisers have launched a nationwide campaign to petition the Federal Financial Institution Examination Council to review the issue of ‘pushing value’. Who can black home owners petition to eliminate the ‘steal value’ issue? The Executive Director of the Councils Appraisal Subcommittee that oversees the licensing activities of state government said, “we do not have authority over ienders. We refer them to the state or federal agency that has supervisory authority.” There have been complaints about ‘pushing vaiue’ the past four to five years. Over 50 percent of the appraisals of property owned by blacks and low income whites are victims of ‘steal value’ by some appraisers. Appraisers say the “pushing the value” is a widespread practice that provides a short term windfall but leaves property owners with unnecessarily large payments. Their properties are re-sold, often at a loss. The practice also undermines the checks and baiances in the mortgage industry. But who’s concerned about the checks and balances of equity rich biack communities victimized by appraisers who ‘steal value’? There are some companies that push real estate agents to push the values up. There are some appraisers who will do “pushing value” or “stealing value” because they get 30 to 40 appraisals a month from lenders. For black consumers looking to buy property or refinance or who are just wondering what their homes are worth according to Knight Bidder, here’s a primer on the appraisal process: Appraisals cost about $325 for a two page long format and $225 for the increasingly popular one page short form. The are valid for six months. By iaw, an appraiser must review the last sales contract before inspecting the property. In valuating the property, most appraisers use the market comparison method. They typically choose three nearby properties, called comps, that were sold within the last year. Appraisers deduct for composition roofs older than 10 years or those that need repair. They also subtract value from homes in busy or noisy areas, be it a road, airport or interstate traffic. After all adjustments are made, the resulting values are averaged to calculate the cost per square foot of the property being appraised. Total adjustments can’t exceed 25 percent and net adjustments can’t exceed 15 percent of the values without a written explanation for breaking the rule. Appraisers must choose comps within a two mile radius, uniess there are special circumstances, such as historic properties and rural areas that have few sales. It would be fair to black property owners if there were special circumstances for some inner city properties too. But appraisers can intentionally skew the values by choosing only comps that are at the high end of a neighborhood price range. When they “steal value” they choose comps at the low end of a neighborhood. It’s time to stand up for economic justice and demand the “true value” of your home. Use your equity to educate your chiidren, upgrade your home or get a loan for your business. Maybe you will join me and my equity rich friend who recently retired from R.J. Reynolds— -if your appraiser tries to steal your home value—your equity, don’t pay him! is the abilitj to build jours. is yiars tciiii of A/R I unUiig, Itw. i soW jIk- .tbiUjv to ^ iimwr - more for i!»nr . m»«rc for tbcir i.ottomor'. ori'l Wire for tl>cir )«r rlu-nt.s enjoj Ao tiui out f1 rHw!>ic fiatdNii; nx-drodk prmuk-. And ratosi from to l.WiporfooiftogpirVxlfifrjrovUng OH yoiur .Kinurl voluiitc rnd rolloi !•(*» cveir). Jt's I'jst to tro t*4iy foKfir^ ytnr KCOi)nU nv WibU Fwidnig: in«k«soli good ftnincul VTH1-. Rewireefvl | f-la-tihSe | Kthahie lWj;Vni*l * >flkc W/rrS rjrnr Cr«wb»«>. Nt ZM)7 «»«.• H6 Hi Wib ( STfSTJOTW *irvvn^',arfim>lk>|'1 oni WWW jrfundkij^i-uR) Offering your business ^ nr rates as Ian as 1,32. /O
The AC Phoenix News (Winston-Salem, N.C.)
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March 1, 2003, edition 1
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