Posted on March 24, 2022

Biden Administration to Fight Racial Bias in U.S. Real Estate Appraisals

Trevor Hunnicutt, Reuters, March 23, 2022

The Biden administration on Wednesday announced new steps to crack down on U.S. real estate appraisers who perpetuate property inequalities by assigning lower home price estimates to Black and Latino owners.

Mortgage finance agency Freddie Mac found in 2021 that Black and Latino people were more likely to have their homes valued under the agreed sales price than white homesellers.

Such an appraisal can limit the size of a mortgage that can be written on a property, forcing homeowners to sell at a lower price or cancel a sale altogether. It can also reduce the amount available during a refinancing.

“Bias in home valuations limits the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap,” the White House said in a statement {snip}

Senior administration officials said the aim is to bolster appraisal standards, increase the diversity of the workforce tasked with creating those estimates and make it easier to report discrimination that violates federal law.