Shortly after Thursday’s announcement by six federal agencies revealing a proposed rule that would enforce quality control standards governing the use of automated valuation models (AVMs), Vice President Kamala Harris weighed in.
Thank you for reading this post, don't forget to subscribe!“Today, I am proud to announce that we are developing a rule that will require financial institutions to ensure that their valuation algorithms are not biased, for example, that they do not favor homes owned by people of color. Let’s not underestimate him,” Harris said in a Thursday call with reporters. “We are also issuing guidance to make it easier for consumers to appeal what they suspect to be a fair assessment.”
white House added his own comments to the newly-announced initiative, saying the proposed rule follows goals set by the president in addressing issues of racial bias that have widened the homeownership and wealth gap.
“These standards will require financial institutions, pledgers 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 safeguards, conflicts of interest, and random sample testing and review,” the White House said on Thursday. “In addition, the proposed rule explicitly includes a non-discriminatory quality control standard. “
In his remarks, the Vice President said that the administration’s focus on this issue is because of the role that home ownership plays in building a family’s wealth.
“Millions of people rely on the equity in their homes to put their kids through college, to fund a startup, to retire with dignity,” Harris said, according to NBC News. “We also know that for generations many people of color have been prevented from taking full advantage of the benefits of homeownership.”
Harris also shared the story of a black family receiving a low initial appraisal and later a notably high appraisal before “whitewashing” their home.
Sharing the story, Harris said, “systemic change is needed,” reports The Hill.
also had to address the impact on the ability of households to create assets U.S. Department of Housing and Urban Development (HUD) Secretary Marcia Fudge.
“Owning a home provides a path to the American dream. Yet, that dream has been deferred to black and brown people because we have consistently undervalued the homes we own,” Fudge said in a statement. said in. “The undervaluation of your home is more than just a number on a page. It can be the difference between getting a loan and not getting one – between having or not having enough money for retirement. Through the President’s PAVE Task Force, the Biden-Harris Administration is taking bold action to address assessment bias — and renew our commitment to do everything in our power to root it out once and for all. Is.
The Biden administration also announced that it would expand the ability for homeowners to renegotiate the value (ROV), adding that federal banking agencies would “require financial institutions to review ROV policies and controls based on their current evaluations.” are in the process of issuing proposed guidance on how they can be integrated into our processes,” the White House said.
HUD and federal housing finance agency (FHFA) “are launching a working group to increase coordination and develop more consistent standards for HUD’s ROV procedures. federal housing administration (FHA), fannie maeAnd Freddie Mac lenders,” the White House said.
According to the White House, the FHFA will also update the Uniform Appraisal Dataset (UAD) aggregate statistics with the new appraisal data in an effort to make appraisal-related data more publicly accessible.
moreover, Interagency Task Force on Property Appraisal and Appraisal Equity (PAVE) has published an online dashboard designed to expand the appraisal profession by clarifying certain requirements.
,[T]The PAVE Task Force is publishing a dashboard that shows which states impose education, exam, and experience requirements to become an appraiser that are more stringent than the federal minimum requirements and reduce unnecessary barriers to entry. Asking the states to make appropriate changes to do so. appraiser profession,” the White House announced.
