Appraisals

A headline-grabbing 2022 lawsuit alleging racial bias by home appraisers has been quietly dismissed for lack of evidence. At the same time, the Trump administration is rolling back many of the policy changes involving home appraisals that the Biden administration put in place.

President Trump and his administration have begun to scrap new mortgage lending guidelines that made it easier for home buyers and sellers to dispute property appraisals, finding that homes owned by racial minorities are routinely valued lower than comparable homes with white owners. But despite the promised regulatory relief, many mortgage lenders say the regulatory changes will not impact their lending practices.

The legislation is a direct response to HUD's effective elimination of the PAVE task force and comes amid ongoing debates over DEI policies in the federal government.

Rolling back PAVE signals a return to evidence-based housing policy and a rejection of flawed claims of systemic appraisal bias, say co-directors of the AEI Housing Center.

The Department of Housing and Urban Development reiterated it has withdrawn a number of FHA mortgagee letters related to appraisals.

The new integration supports the upcoming Uniform Appraisal Dataset 3.6, which becomes available in September, with mandatory use 14 months later.

New research found limitations in current appraisal tools and methods contributing to inconsistencies that may result in incorrect property valuations.

Companies are starting to leverage tools such as artificial intelligence and machine learning as part of the property valuation and review process.

Plaintiffs alleging the lender manipulated home valuations ten years prior argued the interpretation of the rule cited in determining the case's standing was a stretch.

The Department of Justice argues that mortgage lenders, including Rocket Mortgage, should be held accountable for the work of third-party appraisers.

Companies' new uses for AI, regulators' responses to past cyber incidents and wider acceptance of digital collateral were among the year's top developments.

Positive feedback from participants in existing programs led to the decision to expand them in order to assist more lenders.

Melody Taylor, the executive director of the Property Appraisal and Valuation Equity task force, said the interagency group went above and beyond expectations. She also defended it against common attacks from working appraisers.

The interagency Property Appraisal and Valuation Equity initiative, which was tasked by the Biden administration with rooting out bias in home valuations, appears to have run its course. But experts say it could be years before the group's efforts bear fruit.

The final rule governing the use of automated valuation models for home assessments is substantially similar to the initial proposal made last June.

Rocket Mortgage relied on a biased appraisal when it denied a borrower's refinance application in Denver three years ago, the housing agency claims.

In the three years since the Surfside condo collapse, Fannie Mae and Freddie Mac have made policy changes intended to address safety concerns.

The announcement comes as the bureau's director regularly voices doubts about whether algorithmic models can be entirely nondiscriminatory and warns companies of potential enforcement from violations.

The inclusion of policy addressing potential bias or discrimination in AVM models drew both support and criticism, with some stakeholders calling for the creation of an independent nonprofit to help ensure compliance.