An article in last week's real estate section stated that the Society of Real Estate Appraisers had agreed to remedy past practices that were discriminatory in settling a civil rights case with the Justice Department. The society did not acknowledge such practices but agreed to reiterate its standing policy on non-discrimination with its members a spokesman said. A Justice Department spokeswoman said the agency "took dismissal of the lawsuit based on their agreement to issue the policy statement, which requires appraisers to implement objective standards" and not to show racial bias in appraising neighborhoods.
A three-year-old federal civil rights case against the mortgage lending and real estate appraisal industries was closed in the latter part of 1979 with out-of-court settlements with two major lender groups, the Mortgage Bankers Association and the U.S. League of Savings Associations.
The two other defendents, the American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers, settled out of court in 1978. The four associations, representing the majority of their industries, had been charged with promulgating discriminatory appraisal practices and enforcing standards that lowered property values in racially or ethnically integrated neighborhoods. The government said those actions violated the Civil Rights Act of 1968.
As a condition of dropping the suit, the Mortgage Bankers Association agreed to publish a policy statement emphasizing that its members must not use discriminatory appraisal practices. The U.S. League agreed to "continue its practice of providing forums for alternative points of view, conducting educational programs and informing its members through its publications.
The appraiser groups had already agreed to remedy past practices that were allegedly discriminatory.
During proceedings in the U.S. District Court for northern Illinois, a mortgage banking testbook prepared by MBA was cited by the government for its assertion that the appeal of a neighborhood was based partially on "the race and nationality of the individual families who live there."
In its new policy statement to members, the MBA declared: ". . . the value attributed to the property is not dependent upon the homogeneity of racial, religious, or ethnic characteristics of the neighborhood does not cause a diminution of value."