On April 16th
, Rep. Emanuel Cleaver (D-MO) and Rep. Ritchie Torres (D-NY) introduced the Real Estate Valuation Fairness and Improvement Act of 2021, to address racial disparities in the residential and commercial real estate appraisal profession. Specifically, the act would establish an interagency Task Force to analyze federal collateral underwriting standards and provide more funding for programs that promote diversity and inclusion.
The Task Force on real estate valuation would be comprised of fourteen (14) stakeholders from various federal agencies. This Task Force would work toward addressing six key areas:
- Harmonizing collateral underwriting standards, covering both appraisals and property valuation alternatives;
- Addressing areas where harmonization cannot occur, in a report to Congress;
- Establishing specific definitions for limited or inactive markets where there is a dearth of comparable sales data;
- Aggregating Task Force member data to determine whether and to what extent racial disparities exist in the value of homes used as lending collateral;
- Where they exist, identify and address causes of racial disparities or, where more statutory authority is required, report as such to Congress; and,
- Evaluating barriers to entry into the appraisal profession, such as the minimum qualifications established by the Appraiser Qualifications Board.
The Task Force would also establish an advisory committee of various stakeholders in the appraisal, lending, civil rights, and consumer rights spaces.
The Act also provides grant funding to be administered by the Appraisal Subcommittee to promote diversity and inclusion in the appraisal profession, and for appraiser education to address implicit bias.
The House Committee on Financial Services will hold a markup session on April, 20th to offer any amendments.
ASA appreciates having an opportunity to provide feedback during the development of H.R. 2553, and support its holistic approach in assessing ways the housing finance system can work better for everyone.
To read H.R. 2553, click here.