WASHINGTON—NAFCU sent a letter to the House Financial Services Committee ahead of its hearing examining bias and discrimination in the home appraisal process, sharing support for alternative appraisal processes such as appraisal bifurcation, desktop appraisals, and exterior only appraisals.
Vice President of Legislative Affairs Brad Thaler called on Congress to require HUD to permanently permit the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) to accept desktop and exterior only appraisals for all approved mortgages.
Thaler further recommended the FHFA work with government-sponsored entities (GSEs) and other federal regulators to modernize the appraisal process and also work with the Appraisal Foundation (TAF) to diversify the appraisal industry workforce.
“The ability to use desktop appraisals or other alternatives as well as automated valuation models and appraisal waivers in rural areas will decrease the strain placed on NAFCU’s member credit unions and their member-borrowers when it comes to financing the purchase of a home through the mortgage loan process,” wrote Thaler.
Other Challenges
Thaler also pointed to the increased appraisal challenges credit unions continue to face in servicing rural areas, where the appraisal process is often less efficient.
In addition, Thaler expressed the association’s support for efforts to expand the diversity of the appraiser workforce as well as efforts to create a more streamlined and accurate valuation process. “There is a need for consistent reliable technology to simplify the appraisal process, make it more efficient, and reduce bias and discrimination.,” added Thaler. “At the same time, regulatory agencies charged with ensuring the integrity of algorithmic valuation models should take care not to develop rules that will chill innovation or prevent smaller community financial institutions from embracing new technology due to compliance costs.”
The Biden Administration last week announced its action plan aimed at reducing home appraisal bias, as part of a larger effort to address the sprawling racial wealth gap.
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