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CFPB Prioritizing Resources Against Racial Bias in Home Appraisals

July 02, 2021 / Source: CFPB

CFPB Prioritizing Resources Against Racial Bias in Home Appraisals

By Patrice Alexander Ficklin – JUL 02, 2021

As the Bureau’s Fair Lending Director, I am pleased to highlight that the CFPB has prioritized resources to focus on the role of racial bias in home appraisals, a growing topic of conversation within our communities.

Home ownership is a key building block of wealth. It is illegal to discriminate against someone because of race at any stage of the mortgage process, including property appraisals. When a home is improperly undervalued by an appraiser, that hurts the homeowner and the surrounding community. Undervaluation of homes based on race helps drive the racial wealth divide.

At the same time, overvaluation of homes can also put family wealth at risk and lead to higher rates of foreclosure. Ensuring that the appraisals used to make lending decisions are accurate and free from bias is essential if families of all races and income levels are to prosper and pursue successfully the American dream of homeownership.

The CFPB recently hosted a roundtable to look closer at the role of racial bias in home appraisals, a growing topic of conversation within our communities. We were joined at the roundtable by our partner agencies from the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Department of Housing and Urban Development (HUD). We listened to civil rights activists, consumer advocates, and local leaders who see these biases in their communities every day. They offered valuable insights and creative ideas, sparking important conversations across the Federal government about how we can work together with stakeholders to tackle racial bias and other inequities in housing. We also heard from experts about how unconscious biases can play out in the appraisal process.

Last month, President Biden announced a new interagency initiative to address  inequity in home appraisals, designating HUD to lead the effort. The Bureau is pleased to participate in this important interagency initiative, and I am pleased to represent the CFPB on this initiative. I am also pleased to note that we have dedicated additional resources to evaluate tools and approaches to address inequities in home appraisals.

If you feel you have been a victim of appraisal bias, you can submit a complaint with HUD’s Fair Housing and Equal Opportunity office  to get help.

You may also contact the Appraisal Subcommittee Appraisal Complaint National Hotline  to submit a complaint.

If you believe a lender discriminated against you, including by using an improper appraisal, you can submit a complaint to the CFPB.

The CFPB also has numerous tools available for those seeking or maintaining a mortgage. The CFPB has also partnered with other agencies on a joint housing website for those needing help with paying their mortgage or rent, particularly in light of the CDC moratorium expiring on July 31, 2021.

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