It is time again for that occasional modern American ritual, the mortgage refinance. Interest rates seem to have plateaued, and the spread between available rates and my current mortgage once again makes refinancing an option worth the headache of going through the process.
Like so many modern American rituals, the mortgage refinance is primarily a white American ritual and not so much a Black American ritual. This is true in part because 73% of white households own the homes in which they live, compared to only 44% of Black households. However, I was about to find out that this stark differential is not the only reason that Blacks refinance less frequently than whites.
We’ve owned three houses over the course of our marriage, and between purchase mortgages, bridge loans and refinancings, we’ve been through the mortgage-approval process often – I’d guess about ten times. We know the drill.
The most consistently disappointing part of the process has been the appraisal. Every time we apply for a mortgage, the appraisal comes back low, sometimes ridiculously low. When we were moving from West Hartford to Glastonbury, for example, we happened to hit a lull in the West Hartford real estate market and were unable to sell our house as the closing for the new house approached. Our new lender offered a bridge loan to provide the cash needed to close. The appraisal on the West Hartford house came back over $100,000 less than we knew our house was worth. We convinced the lender to get a second appraisal, which was high enough to proceed with the transactions. Ultimately we sold West Hartford for essentially the asking price.
When we bought our current house, we negotiated the purchase price down about $25,000, and that was after the seller already had shaved $30,000 off the asking price. Still, the appraisal came in $30,000 less than the price we had agreed to pay. Each of two subsequent appraisals has undervalued our current house by more than $100,000. Once, the appraiser compared our house to one on the other side of Wethersfield, in a less desirable neighborhood and with none of the amenities our house offered. That “comparable” wasn’t comparable at all; it alone reduced the appraisal by more than $50,000.
Last Thursday, I scheduled the appraisal in connection with our latest refinancing. The appraiser would arrive at 9 a.m. on Saturday. I began preparing myself for a disappointment that might prevent us from doing the deal.
Then my appraisal world changed forever. On Friday morning the Hartford Courant published an abbreviated version of an article previously published by the New York Times. The headline read, “Discrimination in appraisals.” There it was: strong anecdotal evidence that houses owned by Blacks are appraised for less than houses owned by whites. The article told the story of a Black man in a Hartford suburb whose appraisal came in unusually low. Prior to a second appraisal, he hid every family photo in the house, so that there was no evidence that a Black family lived there. On the day of the second appraisal, he left the house, and one of his white neighbors waited to meet the appraiser. Voila! His new appraisal was $40,000 higher.
A mixed race couple in Jacksonville had a similar experience, in this case removing the photos and leaving the white husband alone at home on the day of the second appraisal. BINGO! The appraisal went up $130,000.
Carolyn doesn’t get involved in our refinancings; she just has to listen to me complain about the appraisals. If she had been doing the refinancings, as a Black woman, she probably would have at least suspected that race had something to do with the consistently low appraisals. It never occurred to me, a white male.
Do we know for sure that we have been the victims of racially discriminatory practices? No. It would be impossible now to go back and reconstruct enough evidence to establish anything of the sort. I can tell, you however, that no appraisal ever over-valued our house, and practically none was in the right ballpark.
What we did know was that in less than 24 hours, an appraiser was coming to our house to decide, for all intents and purposes, whether we would refinance. What we did know, for the first time in our home-owning lives, was that in the home appraisal process, race matters. Would our appraiser care that Carolyn was Black, and would it affect the appraisal? We had no way of knowing. Still, we decided it would be foolish to ignore the possibility
And so, on Friday afternoon, we patrolled the house, taking every Black-family picture off the walls, the shelves, the table-tops. Our family! We hid every evidence of our Black family, leaving only our white-family photos in place.
Every photograph of Carolyn and me, gone. No wedding photo, no honeymoon photo, no portraits from later years, no travel photos, nothing.
We rearranged the shelves and table tops so that the absence of photos was less obvious. We retrieved old, unwanted pictures from the basement and the attic and hung them on the large upstairs wall that minutes earlier had been a fabulous family gallery.
It was humiliating.
And then, on Saturday morning, Carolyn left her home. My wife had to sneak out of her house like a common thief. My wife is not some kind of criminal.
Later, I called Carolyn to give her the all clear. She reminded me that we had left the Black Lives Matter sticker on our front door. After all of our work, we may have been outted by a two-inch square sticker.
Really, America? Really? Does any of this make sense? We escaped unharmed; we got the highest, fairest appraisal I can remember, but that’s not the point. Who among us deserves to be treated like this?