Appraiser discrimination targeted in Albany bill

TRD New York /
May.May 21, 2008 01:56 PM

A wide-ranging investigation of five mortgage lenders and other real estate professionals suspected of bias in lending has led to draft legislation that would prohibit appraisers from discrimination, state officials said.

The state Division of Human Rights is leading the investigation. It has taken aim at appraisers, who have been blamed for aggravating the foreclosure crisis by colluding with lenders and brokers to inflate property values to levels that homeowners could not afford.

A bill drafted by the agency and introduced last month in the state Senate adds appraisers to a list of real estate professionals who are prohibited from discrimination based on race, disability, age or other factors included in the state’s Human Rights Law.
 
“Those who work together in a conspiracy to peddle predatory products in the state of New York will be held liable for their conduct,” said Tom Shanahan, deputy commissioner for external affairs at the Division of Human Rights.

Shanahan would not identify the lenders or provide additional details on the ongoing investigation, but said it involved “all aspects of predatory lending.”

In March, state Attorney General Andrew Cuomo cited the close relationship between appraisers and lenders as a cause of inflated loans that later led homeowners to slip into default. Cuomo then struck a deal with Fannie Mae and Freddie Mac, forcing the government-backed financiers to buy mortgages only from lenders who used independent appraisers.

The proposed bill, which carries civil but not criminal penalties, was introduced April 24 by western New York Senator George Winner, the Republican chairman of the committee which will consider the bill.

A companion bill was expected to be introduced in the Assembly, Shanahan said.

The division operates an administrative court which can levy fines and order changes to business practices, he said. A company can appeal to The County State Supreme Court if it objects to the findings.

Joel Leitner, president of the Metropolitan New York Chapter of the Appraisal Institute, said his members must follow an ethical standard that prevents discrimination. He said he was unaware of any cases of abuse among his members.

“If the bill gets bad-acting appraisers off the streets, then it is a good thing,” he said. But he added he “really never heard of predatory appraisers.

However, if there are appraisers out there that are not doing the right thing, then the bill is a good idea and we should support it.”

Real estate appraiser Daniel Houlihan, president of Houlihan & O’Malley Real Estate Services, Inc., said that he did not oppose the bill, but challenged the idea that appraisers made biased valuations.

“The notion that appraisers pick people of color or the handicapped to discriminate against is ludicrous,” he said. 


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
20 West 33rd Street (20West33rd)

Furnishing firm picks up 4 condos at 60 Guilders, Carlyle’s Midtown South project

Furnishing firm picks up 4 condos at 60 Guilders, Carlyle’s Midtown South project
902 Drew Street and 400 East 58th Street (Google Maps)

New York’s multifamily sales improve in Q3

New York’s multifamily sales improve in Q3
Bank OZK CEO George Gleason (Unsplash; Bank OZK)

Bank OZK’s lending up in third quarter

Bank OZK’s lending up in third quarter
The number of mortgage borrowers in Covid-19 forbearance plans ticked down again this week. (iStock)

3M homeowners remain in forbearance

3M homeowners remain in forbearance
Phil Collins wants to sell his Miami Beach mansion for $40M, but his ex-wife won’t leave

Phil Collins wants to sell his Miami Beach mansion for $40M, but his ex-wife won’t leave

Phil Collins wants to sell his Miami Beach mansion for $40M, but his ex-wife won’t leave
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...