The action plan contains 21 steps to improve oversight and accountability
The president of the Mortgage Bankers Association (MBA) has welcomed the report by the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) with open arms.
In a September report, Freddie Mac revealed appraisers are more likely to undervalue homes in Black and Hispanic neighborhoods. The PAVE Action Plan aims to help eliminate racial bias in the home-lending and appraisal process.
Established in June 2021, the task force created an action plan that features “the most wide-ranging set of reforms ever put forward to advance equity in the home appraisal process,” according to the Department of Housing and Urban Development (HUD).
It contains 21 steps to improve oversight and accountability, including a legislative proposal to modernize the governance structure of the appraisal industry. Among the initiatives is to empower consumers with information through appraisal bias training to ensure that home valuation systems will prevent algorithmic bias.
Bob Broeksmit, president and chief executive officer of MBA, said an improvement of the appraisal process remains a top policy issue for the association, alongside its efforts to promote generational wealth creation through homeownership.
“MBA welcomes the release of the report of the Interagency Task Force on PAVE, which provides a detailed and comprehensive action plan to combat appraisal bias,” Broeksmit said. “While the role of mortgage lenders in the appraisal process is limited by design, MBA and its members are committed to working with policymakers and other stakeholders, including appraisers, to develop solutions that ensure borrowers receive a fair and accurate estimate of the value of their homes. “
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The action plan has the PAVE Task Force engaged with more than 150 stakeholder groups, but Broeksmit still urged them to provide opportunities for stakeholders to comment on the action plan during the implementation process.
“We appreciate the work that the PAVE task force has undertaken to document the historical foundations of inequitable property valuations and to identify ways to address problems in modern appraisal processes,” Broeksmit said. “Many of the initiatives announced today can be an important step in the fight toward eliminating biases, improving appraisal accuracy, and opening access to more affordable, sustainable homeownership opportunities for minority borrowers.”
