The proposed guidance, subject to a60-day public comment period, will advise on how financial institutions may respond to consumer concerns about their appraisal and design policies and controls around ROV requests to appraisers.
Federal banking agencies are in the process of issuing proposed guidance on how financial institutions may integrate ROV policies and controls into their current appraisal processes. Agencies are taking actions to promote industry-wide consistency for ROV processes and increase consumers’ knowledge about the option to pursue an ROV: Consumers obtaining an appraisal for a mortgage are often unaware that they have options when they receive a lower-than-expected valuation. Empowering consumers to take action against appraisal bias. When consumers encounter potentially inaccurate or biased appraisals, reconsiderations of value (ROV) provide an opportunity to challenge potentially inaccurate appraisal valuations when obtaining or refinancing a mortgage. In addition, the proposed rule expressly includes a nondiscrimination quality control standard. These standards would require financial institutions, mortgage originators, and secondary market issuers that use AVMs to adopt and maintain policies and other safeguards to ensure greater confidence in valuation estimates, protect against data manipulation, avoid conflicts of interest, and conduct random sample testing and reviews. The proposed rule, subject to a 60-day public comment period, would establish quality control standards to help ensure AVMs are accurately and fairly assessing home values. In recent years, AVMs have spread across the housing finance marketplace. Six agencies are issuing a proposed rule regarding Automated Valuation Models (AVMs), the algorithmic and computational models used to assess the value of homes. Preventing algorithmic bias in home valuation. Today, on the anniversary of the creation of the PAVE Task Force and the start of National Homeownership Month, the Biden-Harris Administration is announcing a set of meaningful actions to deliver on the PAVE Action Plan and ensure that every American who buys a home has the same opportunities to build generational wealth through homeownership: #FULL OVERLAY CABINETS CRACK#
Since its release in March 2022, the Biden-Harris Administration has made critical progress towards fully implementing the Action Plan, including by empowering consumers with new tools to address appraisal bias leveraging data to identify trends and crack down on offenders of appraisal bias and supporting a well-trained and more representative appraiser profession.
As its first order of business, the Task Force developed and released the most wide-ranging set of actions ever announced to advance equity and root out racial and ethnic bias in home valuations – the PAVE Action Plan. Two years ago today, on the centennial of the Tulsa Race Massacre, President Biden announced the creation of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE): a first-of-its-kind interagency effort to root out bias in the home appraisal process. For far too long, bias in home valuations has limited the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap. Homeownership remains a central part of the American dream and the primary contributor to generational wealth building and housing stability for millions of families.
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