Appraisers under fire for alleged bias, lenders on notice

Depending on which experts you believe, the prevalence of racial and ethnic bias in the property appraisal business is either rampant or entirely overblown by politicians and the media.

The issue is an important one, particularly since regulatory agencies have made it clear that lenders, including credit unions, are responsible for the accuracy of appraisals. The agencies also have said that mortgage lenders are responsible for informing borrowers who are unhappy with appraisals that they may ask for a reconsideration of the estimate.

Reports of bias were serious enough for the Biden Administration to form a high-profile inter-agency task force in 2021 named the Interagency Task Force on Property Appraisal and Valuation Equity. The National Credit Union Administration and the Consumer Financial Protection Bureau are members. The NCUA is represented by Chairman Todd Harper; CFPB Director Rohit Chopra also is a member of the task force.

“Homeownership is often hindered by inequities within current home lending and appraisal processes, which research shows disproportionately impact people in communities of color,” the task force wrote in its initial action plan. “Though this broken system was created decades ago, perhaps the biggest drivers of the racial and ethnic wealth gap today are the racial and ethnic disparities in rates of homeownership and in the financial returns associated with owning a home.”


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