New HUD process will allow FHA borrowers to request a second appraisal if they suspect their first appraisal was skewed due to an appraiser’s racial bias.
WASHINGTON, Fla. – Housing and Urban Development (HUD) Secretary Marcia L. Fudge announced that HUD, through the Federal Housing Administration (FHA), is creating a process that people seeking FHA financing can use to request a review of their property appraisal if they believe the results may have been skewed by racial bias.
A homeowner refinancing their home with an FHA-insured mortgage, for example, will be able to take steps to ensure that their appraisal is fair.
Fudge’s FHA policy change is, according to HUD, the first step to solidify processes lenders must follow when a borrower requests a Reconsideration of Value (ROV) review if their concern centers on unlawful discrimination. It gives borrowers a new option if they suspect bias in the appraisal process.
“This announcement is an important step forward in rooting out appraisal bias in this country,” says Fudge.
Under the Reconsideration of Valuation proposal, lenders will have clear guidance on what they should do if borrowers want an ROV during the application process for an FHA-insured mortgage financing.
It also provides guidance for obtaining a second appraisal when material deficiencies are documented and the appraiser is unwilling to resolve them. Material deficiencies include a Fair Housing violation or bias identified on a property valuation report.
FHA is asking for stakeholder feedback to identify barriers and impediments the draft ROV may impose on the lending process. Any interested party is welcome to provide input.
Stakeholders are encouraged to provide feedback on the Draft ML by emailing the Feedback Response Worksheet. The feedback period ends on Feb. 2, 2023.
© 2023 Florida Realtors®
©Florida Realtors®
Source link
