Appraiser Qualifications Board (AQB) to Host Virtual Forum to Explore Fair Housing Laws and Valuation Bias Education
On September 12, 2022 at 1:00 pm ET, the Appraiser Qualifications Board (AQB) of the Appraisal Foundation will host a virtual forum titled Forum to Explore Education Requirements: Fair Housing Laws and Valuation Bias Education. The goal of the forum is to obtain valuable feedback to assist the AQB’s decision-making process. The virtual event will also cover appraiser qualifications criteria changes related to education on fair housing laws and education related to valuation bias.
In addition to an open forum, a portion of the hearing will be devoted to receiving input from panels of individuals representing various constituencies within the appraisal profession, including but not limited to state appraiser regulatory agencies, professional appraiser organizations, education providers, and consumer, civil rights, and fair housing advocacy groups.
In December 2020, the Federal Housing Finance Agency (FHFA) issued a Request for Information (RFI) on appraisal related policies, practices and processes in an effort to collect input on how the enterprises can improve the appraisal process. The RFI requested details on the following:
- Appraisal modernization;
- Uniform Appraisal Dataset (UAD) and the design of appraisal forms;
- Automated Valuation Models (AVMs) and appraisal waivers; and
- Valuation differences by borrower and neighborhood ethnic makeup.
According to the FHFA, there are several key takeaways which should be noted. First, references to race, ethnicity, and other prohibited bases under federal fair lending laws in appraisals and other property descriptions persist, indicating the continued presence of valuation bias. Secondly, there is a continuous failure to address appraiser consideration of prohibited factors like race, as indicated by prohibited basis commentary within the free-text form fields of appraisals, which may result in valuation bias. Third, market participants must ensure that appraisals and other property valuations are compliant with fair lending principles, including in free-form text commentary. Appraisals should be fair and free of bias and offer a supported value for a family’s future or current home which mirrors equal treatment of the community in which the home is located.
As agencies across the country work diligently to fight against appraisal bias, here's what you can do. Join the Appraiser Qualifications Board of the Appraisal Foundation’s virtual conversation on September 12, 2022 to share your concerns and valuable suggestions. There isn’t one answer to preventing discriminatory practices in property valuation. However, we can all work together to help neutralize this crippling practice.
For more information on the Forum to Explore Education Requirements: Fair Housing Laws and Valuation Bias Education, visit www.appraisalfoundation.org.
Broadnax, C. and Wylie, J. (2021, December). Reducing Valuation Bias by Addressing Appraiser and Property Valuation Commentary. [blog post]. Retrieved from: https://www.fhfa.gov/Media/Blog/Pages/Reducing-Valuation-Bias-by-Addressing-Appraiser-and-Property-Valuation-Commentary.