Leading Civil Rights and Consumer Advocates Urge Congress to Enact Meaningful Appraisal Reform

FOR IMMEDIATE RELEASE

September 9, 2022

Media Contact: iwoodruff@nationalfairhousing.org

Groups urge Congress to remove The Appraisal Foundation’s ability to set standards and criteria while enhancing the power of the Appraisal Subcommittee 

Washington, D.C. — The National Fair Housing Alliance (NFHA) and other leading civil rights and consumer advocates called on the House Financial Services Committee, the Senate Banking Committee, and the Biden Administration to support meaningful appraisal reform legislation. The systemic failures of the nation’s property valuation system continue to stifle wealth creation for too many people and communities and undermine our nation’s economy. Most importantly, the advocates urged Congress to transfer rulemaking authority for the Uniform Standards of Professional Appraisal Practice (USPAP) and the Real Property Appraiser Qualification Criteria from The Appraisal Foundation to the Appraisal Subcommittee. The advocates raised concerns that any other approach would be cumbersome, ineffective, and fail to provide meaningful reform.  

“As Fair Housing advocates, we urge Congress and the Biden Administration to reform the home valuation system to stop appraisal bias and the economic injury it causes,” said Nikitra Bailey, Executive Vice President at NFHA. “Removing The Appraisal Foundation’s ability to set appraisal standards and appraiser criteria while enhancing the power of the Appraisal Subcommittee will help create a fair appraisal system.”  

Earlier this year, NFHA was commissioned by the Appraisal Subcommittee to undertake a study about Appraisal Criteria and Appraiser Standards including appraisal bias. In that study, NFHA documented systemic challenges that drive appraisal bias and highlighted a number of areas of concern. NFHA also provided recommendations to overhaul the appraisal system to address discrimination and inequities. 

“Appraisal reform is something our nation and communities desperately need as the lack of oversight has led to an acute shortage of qualified appraisers and decades of unfair and biased practices,” said Ms. Bailey. “HUD has been inundated with complaints of appraisal discrimination. Just recently, yet another appraisal bias lawsuit was filed involving two Black professors from Johns Hopkins University who had to White-wash their home to get a fair and accurate appraisal. We ask that Congress and the Biden Administration move as quickly as possible to support robust, comprehensive appraisal reform legislation.”

NFHA and other leading civil rights and consumer advocates strongly believe that six key reforms are necessary for appraisal reform legislation:

• Governance. Provide the Appraisal Subcommittee with rulemaking authority for appraisal standards and appraiser qualification criteria (instead of The Appraisal Foundation) for all appraisals of real property in connection with a mortgage transaction. 

• Barriers to Entry. Provide the Appraisal Subcommittee with the authority to promulgate rules to establish reasonable criteria for entry into the appraiser profession, and to establish a nationwide registry and a unique ID system. Provide HUD with the authority to establish an appraiser equity grant program for appraisers to ensure diversity and service to underserved areas, including rural areas.

• Fair Housing Training. Provide the Appraisal Subcommittee with the authority to require appraisers to attend comprehensive fair housing training.

• Appraisal Standards. Provide the Appraisal Subcommittee with the authority to promulgate rules for appraisal standards to ensure that real property appraisals are fair, transparent, and data-driven.

• Accountability and Enforcement. Increase funding for HUD’s Fair Housing Initiatives Programs (“FHIP”) and Fair Housing Assistance Programs (“FHAP”) to ensure private fair housing organizations are sufficiently resourced to provide support and services to all consumers who experience discrimination in the appraisal process. 

• Home Valuation Data and Research. Provide the CFPB with the rulemaking authority under HMDA to require mortgage lenders to provide valuation data, to develop a publicly-available database, and to create a Trusted Researcher Program. “Trusted Researchers” would have access to the fields where the availability to the general public is limited due to privacy concerns. 

This letter was issued jointly by the following organizations:

• National Fair Housing Alliance
• Americans for Financial Reform
• Consumer Action
• Joint Center for Political and Economic Studies
• The Leadership Conference on Civil and Human Rights
• NAACP Legal Defense and Educational Fund, Inc. (LDF)
• National Action Network
• National Association of Real Estate Brokers, Inc.
• National Coalition for Asian Pacific American Community Development (CAPACD)
• National Consumer Law Center, on behalf of its low-income clients
• National Urban League
• UnidosUS

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The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities