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Black homeowner files complaint after home value doubled when white friend stood in for appraisal

A black homeowner in Indianapolis has filed a complaint after her home value more than doubled after she had a white friend stand in for her during a third appraisal.

Carlette Duffy believed the first two appraisals she received at the beginning of the coronavirus pandemic were too low and were given based on her skin color.

Her home was in the Flanner House Homes neighborhood was appraised for $125,000 first in March and April 2020, before dropping down to $110,000.

Flanner House Homes is a historically black neighborhood listed on the National Register of Historic Places 

For the third appraisal, Duffy kept communication to email and eliminated indicators of her racial identity from her home before having the white husband of a friend stand-in for her during a visit.

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Carlette Duffy (pictured) has filed a complaint after she alleges her home was undervalued by several appraisers last year due to her race

Pictured: Duffy's home from several years ago, which was ultimately appraised for $259,000

That time, the home was appraised for $259,000, more than double the value of the initial appraisal.

'I had to go through all of that just to say that I was right and that this is what's happening,' Duffy told the Indianapolis Star.

In conjunction with the Fair Housing Center of Central Indiana, Duffy has filed a complaint with the U.S. Department of Housing and Urban Development against the mortgage lenders and appraisers involved in allegedly undervaluing her home.

She's asking for the appraisals to be investigated by the federal agency. The complaints allege that the appraisals were racially-motivated and unfair comps were pulled in regards to the appraisals.

The respondents in the complaint include appraiser Tim Boston, appraiser Jeffrey Pierce, CityWide Home Loans and employee Craig Hodges, lender Freedom Mortgage, and two employees of Freedom Mortgage.

Duffy took away indicators in her home that may have revealed her racial identity

She also had a friend stand-in for her during an appraisal, giving the impression the home was owned by a white homeowner, rather than a black one

Boston denied the allegations, saying, 'My appraisal reports are data-driven. I could care less about culture or sexual orientation.'

'My appraisals are always supported by data because my license is at risk if I don't do it correctly,' Boston added. 'From the appraisal management company to the bank, those appraisals go through statistical packages, a logarithm type software to test my value. If it's not within a certain range of those software programs, it'll kick back.' 

The other respondents in the complaint have not publicly responded to the allegations.

Duffy first received an appraisal so she could refinance her mortgage loan, as interest rates were low due to the pandemic.

She purchased her home mortgage in 2017 for $100,000.

Duffy has filed a complaint with the U.S. Department of Housing and Urban Development, asking for the initial appraisals to be investigated

Duffy's sister, who lives close to Duffy, at her home appraised in 2019 for $198,000. 

But her first appraisal in the spring of 2020 from CityWide and Jeffrey Pierce of Pierce Appraisal came in at just $125,000 according to the HUD complaint. 

'The wording in it just it sent out red flags,' Duffy told the IndyStar. 'It said there were comps within the half mile, but it said the quality of construction of the other homes were far more superior to the quality of construction of my home.'

After Duffy looked at the comps herself, she chose to purchase a market analysis of her own home and give it to CityWide, which concluded the list price of her home could be $187,000.

CityWide refused to budge on their appraisal, leading Duffy to turn to Freedom Mortgage to refinance her home.

Between May and July 2020, Freedom Mortgage and Tim Boston of the Appraisal Network appraised her home at an even lower value of just $110,000, according to the complaint.

Duffy (pictured) had her home appraised for $125,000 and then $110,000 before her third attempt sent the value soaring

'How did I lose $15,000 in my home value?' Duffy asked, without receiving a satisfactory answer.

Duffy handed over the market analysis to Boston, though Boston denies receiving additional documentation from Duffy.

Throughout this, Duffy was also receiving interest rate quotes above the 3.9 percent rate on her current mortgage loan. 

'I had a lot of pushback from family, from friends, from friends in real estate who were like maybe that's just the value of your home, you know — maybe you're wrong, that there's nothing nefarious occurring,' Duffy said about the second appraisal. 

'But none of those arguments convinced me that I was wrong. I just felt like, no. Something else is happening here that we're just not seeing.' 

Duffy had to go through the Federal Housing Administration at the end of 2020, where she 'didn't declare race and gender in the application process,' leading to a 2.9 percent APR.

After becoming aware of different reports about regarding race and housing, Duffy gave it another shot in October and November 2020 with an unidentified company. She did not declare her race or gender to the company.

She only communicated via email and removed photos and art from the walls of her home.

Pictured: The Flanner House Homes neighborhood, where Duffy's home is located

'I staged my home to look as ethnically neutral as possible,' Duffy said.

On November 4, the white husband of her friend - who Duffy told the appraiser was her brother - stood in for Duffy, who claimed to be out of town for the appraisal.

On November 6, Duffy received the new $259,000 appraisal.

Boston questions the redaction of the appraiser's name in the complaint and their certification, but said, 'We should have to look at those appraisals to figure out what why there's such a big difference.'

Duffy says she is 'excited, vindicated, relieved, angry, [and] extremely peeved' about it all

Amy Nelson, executive director of the Fair Housing Center, said that nothing nefarious was going on and that the appraiser wasn't identified because they weren't the subject of a complaint.

Duffy says she is 'excited, vindicated, relieved, angry, extremely peeved since I can't say the other expletives that were running through me at that point in time — destroyed that I had to go through all of that.'

According to research from The Brookings Institution, owner-occupied homes in African American neighborhoods are undervalued by an average of $48,000 per home, adding up to $156 billion in cumulative losses for the community.

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