• DOI:10.1023/A:1007727716513
• Corpus ID: 152452718

Are Minorities or Minority Neighborhoods More Likely to Get Low Appraisals?

@article{LaCourLittle1998AreMO,
  title={Are Minorities or Minority Neighborhoods More Likely to Get Low Appraisals?},
  author={Michael LaCour-Little and Richard K. Green},
  journal={The Journal of Real Estate Finance and Economics},
  year={1998},
  volume={16},
  pages={301-315}
}

• Michael LaCour-Little, Richard K. Green
• Published 1 May 1998
• Economics
• The Journal of Real Estate Finance and Economics

We empirically examine the role of appraisal in the residential mortgage lending process—in particular, the incidence, consequences, and determinants of appraisal below contract purchase price. Using the Boston Federal Reserve Study data set, we find that, as expected, low appraised value significantly increases the probability of mortgage loan application rejection. We find no evidence that low appraised value is related to census tract racial composition, an important finding given the history of the appraisal industry; however, low appraised value is related to proxies for neighborhood quality. Moreover, properties securing adjustable rate mortgages, condominiums, and properties purchased by African American buyers show an increased probability of low appraisal, though the race effect result is highly sensitive to model specification.