|HUD No. 22-054
HUD Public Affairs
March 24, 2022
WHAT THEY ARE SAYING: STAKEHOLDERS, ADVOCATES, ELECTED OFFICIALS APPLAUD PROPERTY APPRAISAL AND VALUATION EQUITY TASK FORCE ACTION PLAN
Appraisal Institute President CEO Jody Bishop: "Our organization stands ready to work with the bank regulatory agencies, loan guarantee agencies and other stakeholders to develop a more accountable, actionable and efficient regulatory structure.”
Harvard Joint Center for Housing Studies: @Harvard_JCHS: A home appraisal is a critical part of the homebuying and lending process but bias in home valuations limits the ability of Black and brown families to enjoy the financial returns associated with homeownership and contributes to the racial wealth gap. https://t.co/9U471ZzHEU
Housing Policy Council (HPC): “HPC congratulates the PAVE task force on the release of a detailed Action Plan, following a six-month intensive and inclusive process to examine disparities in the valuation of residential properties. As the report highlights, the steps that federal agencies take to address these disparities will advance the Administration’s critical work to shrink the homeownership and wealth gaps affecting households and communities of color. HPC and our member companies support these efforts and PAVE’s goal to root out discrimination in the appraisal and homebuying process and are pleased to see that the Plan embraces several of the actions recommended by HPC.
The PAVE task force has set forth a series of initiatives that should have a meaningful impact on the quality and accuracy of appraisals, identifying ways to address regulatory challenges, improve consumer understanding, expand and enhance data and research, and update the professional qualifications to become an appraiser. We look forward to continued close engagement with the PAVE task force as it embarks on the critical work to pursue the actions identified in the Plan.”
MBA President and CEO Bob Broeksmit: "MBA welcomes the release of the report of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE), which provides a detailed and comprehensive action plan to combat appraisal bias. While the role of mortgage lenders in the appraisal process is limited by design, MBA and its members are committed to working with policymakers and other stakeholders, including appraisers, to develop solutions that ensure borrowers receive a fair and accurate estimate of the value of their homes.
"MBA and its members have made improving the appraisal process a top policy issue, and have prioritized it both as part of our CONVERGENCE initiative to promote more sustainable, affordable housing for minority and low- to moderate-income families and communities, and as part of our Building Generational Wealth Through Homeownership campaign.
"We appreciate the work that the PAVE task force has undertaken to document the historical foundations of inequitable property valuations and to identify ways to address problems in modern appraisal processes. Many of the initiatives announced today can be an important step in the fight toward eliminating biases, improving appraisal accuracy, and opening access to more affordable, sustainable homeownership opportunities for minority borrowers.
"While the report notes that many of the reforms can be put in place under existing authorities, it will be important for Task Force agencies to provide ample notice and comment opportunities for stakeholders during the implementation process."
NAACP Legal Defense Fund Director of Policy, Lisa Cylar Barrett: “We commend the Biden-Harris Administration for taking this important step to change the long-standing practice of undervaluing the homes owned by people of color, especially those in Black and Brown communities. This practice has had a profound, multi-generational impact on the ability of Black and Brown Americans to build wealth. “Homeownership is touted as part of ‘the American Dream’ and is a sound wealth-building practice, but ongoing discrimination in appraisals has led to immense losses. By some accounts, in majority-Black neighborhoods, those loses are well over $150 billion. “LDF looks forward to continuing to work with the administration and other stakeholders on this effort and others to ensure that Black and Brown Americans have the rights and protections needed to work, live, and thrive without barriers to equality.”
National Association of Federally-Insured Credit Unions: @NAFCU: #TODAY: Property Appraisal and Valuation Equity (PAVE) announced the #PAVEActionPlan to address home #appraisal bias in a final report. A few findings from the report: https://pave.hud.gov/actionplan
The report found an evident market value gap between majority-Black and majority-White neighborhoods spanning decades, noting that undervaluation often results in a negative impact on both the seller and buyer, sometimes causing the sale to fall through.
Home undervaluation can also result in a downward price renegotiations, leading to a reduction of the seller’s financial gains.
PAVE included several actions targeted at reducing appraisal bias such as expanding the use of alternative traditional appraisals as well as modernizing the appraisal process, something NAFCU has been supportive of.
PAVE is also looking to build a well-trained, diverse appraiser workforce, and wants to empower consumers to take actions regarding appraisal bias.
.@FHFA Director Sandra Thompson, who spoke about appraisal modernization at NAFCU’s #2021Caucus, applauded PAVE co-chairs @SecFudge & @AmbRice46 “for their leadership of the PAVE Task Force and the development of this final report.”
NAFCU’s Regulatory Affairs team has engaged with lawmakers & several agencies to modernize the appraisal process. In a letter to @FHFA on its 2022-2026 strategic plan, NAFCU said the use of tech is a start to addressing appraisal bias. https://bit.ly/3Nd34Wl
NAFCU encourages credit unions to reach out with any questions regarding the #PAVEActionPlan. Read the full report here. https://bit.ly/3IsQOxq
National Association of Realtors® President Leslie Rouda Smith: "REALTORS® are committed to upholding fair housing laws in all real estate activities, including appraisals," said Leslie Rouda Smith, President of the National Association of REALTORS®. "We are proud of the part we played in this report, including meeting with the PAVE Task Force to propose solutions on how the Biden Administration, REALTORS®, and the broader appraisal industry can work together to address concerns and improve public trust in the appraisal profession without undermining the soundness of the market. Historically, many groups have faced unfair home undervaluation. Addressing those wrongs is key to providing financial stability to not only homeowners, but entire communities, and benefits the nation as a whole."
National Community Reinvestment Coalition (NCRC) General Counsel Brad Blower and Senior Director of Policy Megan Haberle: Today the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) issued its action plan to root out racial and ethnic bias in home valuations, a widespread problem that helps drive the racial wealth gap. The action plan is a bold leap forward in documenting the impact of such bias and setting out specific solutions. It identifies the historical role of racism in the valuation of rental property, examines various forms of bias in property valuation, and lays out a roadmap of concrete action steps under a whole-of-government approach. …
The action plan is a significant step forward in addressing appraisal bias. NCRC commits to working with the federal government and the appraisal industry to bring the Plan’s commitments into being – and to get us all to a better place, where discrimination does not stand in the way of financial security and fair treatment.
National Fair Housing Alliance (NFHA) President and CEO Lisa Rice: “The appraisal industry is crucial in setting home values and shaping the financial well-being of millions of American families for whom a home is their main financial asset. NFHA applauds the bold leadership of Secretary Marcia Fudge and Director Susan Rice in issuing this comprehensive, well-researched Action Plan to address the systemic devaluation of homes of Black, Latino, Native, and AAPI consumers. Although the Fair Housing Act was passed in 1968, recent news stories and studies have shown that appraisal discrimination continues to restrict homeownership and lending opportunities for borrowers of color. In fact, the Black/White homeownership gap is larger than it was when redlining was legal, and it remains high for other communities of color. Because homeownership is the key to building wealth in the United States, it is not surprising that the racial and ethnic wealth gap also remains large and persistent. The PAVE Task Force’s Action Plan is a major step forward in identifying concrete measures that can ensure a fair, transparent, and reliable appraisal process, as well as the means of expanding inclusive homeownership opportunities, particularly for borrowers of color.
“As the NFHA Consortium found in its recent report, the appraisal industry has operated with little scrutiny or oversight. By comparison, other sectors of the mortgage market have evolved to engage substantive reforms and adopt less discriminatory practices. Without honest conversations about appraisal bias, coupled with meaningful reforms, the homeownership and wealth gaps will remain stubbornly entrenched. We hope that the findings in the PAVE Action Plan and the NFHA Consortium report will promote steps among key stakeholders in the appraisal and housing industry to seek workable, sustainable solutions that benefit the whole of the housing market, including communities of color. We call on Congress, federal regulators, the industry, and fellow advocates to work together to enact the meaningful changes necessary for real reform. Any entity with a role in the appraisal process has a responsibility to help address these inequities.”
Senator Sherrod Brown, Chair of the Senate Committee on Banking, Housing, and Urban Affairs: “Black and brown families face greater barriers to homeownership at every turn – including in the appraisal process. The PAVE Task Force’s Action Plan lays out a clear path to identify and address systemic bias in appraisals, strengthen fair housing oversight, expand and diversify the appraiser workforce, and empower consumers to call out bias. I look forward to working with Secretary Fudge and the Biden-Harris Administration to ensure all homeowners can access the same benefits from homeownership.”
U.S. House Committee on Financial Services: @FSCDems: Today the Biden Admin’s Interagency Task Force on Property Appraisal & Valuation Equity (PAVE), composed of 13 Fed agencies & offices, released their action plan to ensure all Americans can benefit fairly from the equity built through homeownership: pave.hud.gov
Rep. Ruben Gallego: @RepRubenGallego: For Black, brown & Indigenous Americans, the housing market is riddled with discriminatory obstacles that make it an uphill battle to build generational wealth. Thanks to @SecFudge and the #PAVEActionPlan for working to end biased home appraisals.
Rep. Emanuel Cleaver: @repcleaver: As Chair of the Subcommittee on Housing, last year I called on @POTUS to immediately begin working to address these historically harmful barriers that have limited communities of color. Thrilled to have advocates like @SecFudge & @VP leading this effort. Cleaver, Klobuchar, Warnock, Colleagues Urge Federal Financial Institutions Examination Council to Address Racial Disparities in Housing Appraisal Industry
@repcleaver: Combating biases in the appraisal industry is essential to closing the racial wealth gap & creating a more equitable America. Good to see @POTUS & @VP focused on this issue. Now, it’s time for Congress to step up to the plate and codify protections for Black & Brown homeowners. Biden administration to fight racial bias in U.S. real estate appraisals (yahoo.com)