A woman is suing Bank of America and a Virginia-based appraiser for racial discrimination, the latest Fair Housing-related lawsuit alleging that lenders and appraisers undervalue homes based on the race of the occupants.
Darchelle Braxton, a Black woman who last summer attempted to secure a loan for home improvements on an investment property, claims an initial appraisal ordered by Bank of America valued her property at $135,000, but a subsequent second appraisal valued it more than 50% higher, at $208,000.
“Upon information and belief, Bank of America’s real motive in denying the loan was…intentional discrimination,” the lawsuit claimed.
At the federal level, the Trump administration has deprioritized many fair housing oversight and enforcement actions. But the impact of race-based discrimination in lending and appraisals is acknowledged by housing industry advocates and well documented in data.
A Bank of America spokesperson declined to comment on the lawsuit.
Other high-profile individual allegations of appraisal bias have made national headlines, with Black homeowners claiming they have to “whitewash” their homes or risk a lower appraisal. The federal government has also sued lenders and appraisers for alleged discriminatory practices related to appraisals.
Appraisers have often argued that differences in appraisals can be explained by numerous other factors, including property location and other technical nuances of the process, rather than bias or racism.
In her lawsuit, Braxton said she and the tenants of her property were both present for the appraisal, and claims the appraiser “did not like the idea that a black woman owned the home being rented by a white tenant,” without providing further details, context of evidence.
The appraiser named in the complaint and the company that oversaw the appraisal could not immediately be reached for comment.
Braxton claims that not only was the appraisal biased, but that bank employees and loan officers “engaged in disrespectful and unprofessional treatment,” including one loan officer who lied about not owning a phone as an excuse for why he did not return her phone calls. She also claims she was shuffled between four different loan officers, with little explanation as to why.
In the end, Braxton’s loan application was rejected, but she claims she then immediately went to Guild Mortgage, who approved the loan with “minimal hassle” after the second appraisal came in at around $208,000.
Braxton is alleging negligence, violations of fair housing laws, civil rights statutes and the Equal Credit Opportunity Act (ECOA), and asking for $250,000 in damages.
