Biden Claims on Racial Bias in Appraisals
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Over the past week or so, Presidential Candidate Joe Biden publicly called for more regulation and oversight over appraisers to combat racial bias. He specifically cited the Brookings Institute Study ”The Devaluation of Assets in Black Neighborhoods, The Case of Residential Property”. If you are unfamiliar with this study, in a nutshell, the findings accuse appraisers of undervaluing properties in black neighborhoods. The study is an easy read and can be found here. We will warn you, much of the data used in the study carries very little weight as Census Bureau (self-reported data) and information from Zillow were used.
We all know licensed professional appraisers cannot be biased and that no appraiser “values” a property. We are bound by strict regulation under State Law, USPAP, Dodd Frank and Appraisal Independence requirements outlined in the Truth in Lending. Appraisers report the market; we do not create the market. A clear lack of knowledge on what appraisers actually do by those involved with the Brookings Institute Study is evident! It is this type of misinformation why the appraisal profession is in its current state.
Two professional appraisal organizations have responded to Candidate Biden and his campaign via letters outlining our already over regulated profession. Jefferson Sherman, the 2020 Appraisal Institute President and Craig Morley, President of the National Association of Appraisers have both written to Candidate Biden and his staff. Please share these letters and/or write you own and post on social media, send it to your database, etc.
VaCAP has always advocated to teach others what appraisers do and our importance. Lending work has been free flowing lately and most of us are extremely busy with the recent rate drop. Please take the time to talk to others on why the professional appraiser is needed and how we are the gatekeepers of the financial and real estate markets. If we appraisers do not speak up and correct the misinformation, who will? Remember the last fix to a problem that did not exist resulted in appraisal management companies and loss of our clients and income.
Do we really need another fix to a problem that does not exist?