appraisal bias

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The Department of Housing and Urban Development (HUD) recently charged multiple entities with housing discrimination based on an asserted biased appraisal and denial of a mortgage refinance loan application based on the appraisal. Charges were brought against the appraisal company, Maverick Appraisal Group; the appraisal management company, Solidifi U.S. Inc.; the lender, Rocket Mortgage, LLC; and the individual appraiser.… Continue Reading

The U.S. Department of Housing and Urban Development (HUD) announced that it has entered into an historic Conciliation Agreement (Agreement) with The Appraisal Foundation (TAF), an organization responsible for setting standards and qualifications for real estate appraisers and providing voluntary guidance for appraisers. This Agreement resolves a Secretary-initiated complaint against TAF alleging discriminatory barriers preventing qualified Black people and other persons of color from entering the appraisal profession on the basis of race in violation of the Fair Housing Act.… Continue Reading

On June 26, 2024, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) released its annual Fair Lending Report (the “Report”) for the calendar year 2023. The reporting period ran through December 31, 2023, so any subsequent fair lending developments are not included.

The first section of the Report covers the CFPB’s fair lending enforcement and supervision activities in 2023.… Continue Reading

Federal banking regulators recently began adopting a final rule that requires, among other things, supervised mortgage originators and secondary market issuers to ensure that automated valuation models they use follow quality control standards, including a requirement that they comply with nondiscrimination laws. The final rule will be effective on the first day of the calendar quarter following the 12 months after publication in the Federal Register.… Continue Reading

The U.S. Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), recently issued Mortgagee Letter 2024-07 addressing reconsideration of value (ROV) policies in connection with appraisals for FHA insured mortgage loans under the Title II forward mortgage loan and reverse mortgage loan programs. The amended Mortgagee Letter may be implemented immediately but must be implemented for FHA case numbers assigned on or after September 2, 2024.… Continue Reading

The CFPB published a blog discussing a few key takeaways from a series of public hearings addressing appraisal bias.

For background, the Federal Financial Institution Examination Council’s (FFIEC’s) Appraisal Subcommittee (ASC) has held four public hearings throughout 2023-2024 to facilitate discussions regarding bias and lack of diversity within the appraisal business.… Continue Reading

The U.S. Department of Housing and Urban Development (HUD) recently issued a press release announcing a 2023 update to its Equity Action Plan. The Equity Action Plan is part of HUD’s efforts to implement President Biden’s Executive Order on “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.”… Continue Reading