For most Americans, their home is their single most important financial asset and holds the key to wealth, stability, and opportunity for their family and generations to come. In addition, home values affect the tax base, school funding, and community investments. Moreover, time and again, our nation\u2019s economy and financial markets have been significantly impacted by home valuations, with communities of color often bearing the brunt of failings in the mortgage market and the home appraisal process. Given the importance of homeownership to American families, particularly families of color, governmental and private organizations have called for appraisal reforms and a comprehensive examination of the structure and governance of the appraisal industry. <\/p>\n\n\n\n
In response to these calls for reform, we have assembled the following resources, which we hope will encourage conversations among key stakeholders in the appraisal and housing industries to seek workable, sustainable solutions that benefit the whole of the housing market, including borrowers of color. In addition, we have provided resources to file a discrimination complaint if you think you received a discriminatory appraisal.<\/p>\n\n\n\n
Automated Valuation Models<\/strong><\/p>\n\n\n\n
NFHA partnered with the National Consumer Law Center (NCLC) to submit comprehensive comments to federal regulators on their Notice of Proposed Rulemaking (NPRM) regarding Quality Control Standards for Automated Valuation Models (AVMs). The dangers that can be posed by AVMs as they may perpetuate, amplify, and masquerade appraisal bias. Discrimination in the appraisal market is a safety and soundness risk and threatens our financial marketplace and economy. There is no question that discriminatory mis-valuations are a historical and present phenomenon, and AVMs \u2014 like any technology \u2014 can manifest bias that harms consumers and communities. Our joint comment urges federal regulators to use this opportunity to make it clear that federal statutes prohibit the use of discriminatory AVMs, and to require that AVMs must be reviewed for both disparate treatment and disparate impact. Our comment also makes the following points:<\/p>\n\n\n\n
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The Final Rule should use a principles-based approach to regulation;<\/li>\n\n\n\n
The Rule should be broadly applied to AVMs used for a wide variety of purposes; and<\/li>\n\n\n\n
Federal regulators should release loan-level appraisal data to ensure robust compliance with the law.<\/li>\n<\/ul>\n\n\n\n
![\"\"](\"https:\/\/nationalfairhousing.org\/wp-content\/uploads\/2022\/03\/appraisal-report-image-1.png\")
\n <\/figure>\n <\/div>\n \n \n\n An Analysis of the USPAP Standards and Appraiser Qualifications Criteria<\/span>\n \n