HUD releases new requirements for appraisal reconsideration

The Department of Housing and Urban Development announced Wednesday that lenders in its Single Family program must clearly explain how borrowers can request a reconsideration of a property appraisal.

The information released to borrowers must include how long an appraisal reconsideration may take. The information must be provided when someone fills out a mortgage application, and again when the property appraisal is presented to a borrower. For lenders, the new policy includes a requirement that loan underwriters be trained to identify appraisal problems, including allegations of racial or ethnic bias.

The new requirements are the latest step by the Biden Administration to address reports of racial bias in the appraisal industry. In June 2021, administration officials announced the formation of an inter-agency task force to address that bias. The task force has been working on such issues as bias in automated valuation and diversity in the property appraisal industry.

The National Credit Union Administration is a member of the task force and agency Chairman Todd Harper has endorsed its efforts.

 

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