‘Deep structural issues’: New report calls for appraisal industry reform, blasts lack of diversity

A groundbreaking report released by the National Fair Housing Alliance on January 19, 2022, is calling for sweeping reforms in the appraisal industry and highlights a lack of diversity in the field, among other challenges.

The post NFHA’s President and CEO Discusses Groundbreaking Report on Appraisal Bias in Real Estate (ABC7 San Francisco) appeared first on NFHA.

Updated on: February 15, 2022 | READ THE FULL ARTICLE HERE

Black Americans frequently face challenges achieving homeownership, even in areas with large Black populations, according to a 2021 LendingTree study. Those fortunate enough to overcome financial hurdles to become homeowners may face a different obstacle: appraisal discrimination.

The newest LendingTree survey finds that more than 1 in 5 Americans who’ve had to get a home appraisal — typically to refinance or sell a home — believe the value was too low at least once in their lifetime. And 21% of these current or past homeowners suspect the subpar value was based in part on their race, gender, sexual orientation or religion.

LendingTree surveyed 2,100 consumers, including more than 900 who have commissioned a home appraisal. Researchers asked about their appraisal experiences to learn what steps they took — and what steps they think need to be taken — to overcome concerns about home appraisal discrimination…. READ FULL ARTICLE HERE

The post LendingTree: “32% of Black Homeowners Believe Their Home’s Value Was Unfairly Appraised” appeared first on NFHA.

View the full blog on CFPB’s website

Home ownership is one of the best paths for building intergenerational wealth. But for some homebuyers and owners, a home’s valuation may be skewed by one’s skin color or the demographics of the surrounding community. A biased home appraisal can worsen racial inequities and distort the housing market. That’s why, for more than 50 years, federal law has forbidden racial, religious, and other discrimination in home appraisals. But we still see reports of appraisers who don’t follow the law and base their value judgments on biased, unfounded assumptions about borrowers and the neighborhoods in which they live.

We have also seen the organization that sets the standards for appraisers, The Appraisal Foundation (TAF), fail to include clear warnings about the requirements of federal law in the standards it sets, and in the training it provides for appraisers. TAF is a private, non-governmental organization, and the only entity with the power to set professional standards for appraisers. However, TAF has yet to highlight these important laws even though it frequently revises its standards. These actions undermine a fair and competitive market free of bias and discrimination…. READ FULL BLOG HERE

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The post DOJ, HUD, FHFA, Federal Financial Regulators Comment Letter to The Appraisal Foundation appeared first on NFHA.

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The appraiser has the power to determine the value of a mortgage borrower’s most important financial asset, which can hold the key to determining whether that borrower’s family can purchase a permanent home rather than rent, access credit on reasonable terms, or build wealth for their family and generations to come. Over time, Americans have seen many crises related to homeownership (the Savings and Loan Crisis, the Great Recession, the COVID pandemic) and each time, the housing market players were heavily scrutinized and regulated to prevent harm to the American consumer’s greatest asset. Given the importance of homeownership to so many people, the reforms were welcomed by homeowners and largely embraced by key housing market players, such as mortgage bankers, who understood the importance of protecting the housing market and saw borrowers of color as the future of the market.

The post Identifying Bias and Barriers, Promoting Equity: An Analysis of the USPAP Standards and Appraiser Qualifications Criteria appeared first on NFHA.