A liberal think-tank, regulators, the government-sponsored enterprises, the President of the United States, even fintech firms have all called attention to appraisal bias.
But among them, one agency is taking the lead in spearheading the issue.
Earlier this year, President Joseph Biden charged Department of Housing and Urban Development Sec. Marcia Fudge with leading an inter-agency task force to root out bias in appraisals. Discrimination in appraisals “robs Black families of billions of dollars in home equity and household wealth,” HUD Sec. Marcia Fudge has said.
The task force, co-chaired by Fudge and the director of the United States Domestic Policy Council, Susan Rice, has convened high-level officials from entities including the Federal Reserve, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the Department of Justice and the Federal Housing Finance Agency.
The task force appointed Melody Taylor, HUD’s regional director for its Mid Atlantic Office of Fair Housing and Equal Opportunity. In her role as regional director, Taylor oversees programs and policies related to fair housing, economic opportunity, civil rights and nondiscrimination in the implementation of HUD programs.
Yet there are outstanding questions about the nature of bias in appraisals. It’s unclear how frequently bias figures in, if it is mostly conscious or introduced inadvertently, and what role historical discrimination plays.
Freddie Mac recently produced a novel analysis of appraisal reports — the first public research of their data — which found that appraisals in minority neighborhoods are more likely to fall short of the contracted sales price.
Fannie Mae has said it too is working on an analysis of its appraisal report data. Neither of the GSEs have made their trove of appraisal data publicly available for researchers to comb through.
Taylor agreed to answer HousingWire’s written questions about the progress of the interagency task force, and how HUD’s understanding of bias in appraisals is taking shape as they forge a final action plan. Here’s how Taylor, via email, responded to our queries.
Georgia Kromrei: How many complaints of appraisal bias has HUD received this year? What about last year?