CFPB Investigations in Alleged Appraisal Discrimination
The Consumer Financial Protection Bureau (CFPB) has started investigating alleged appraisal discrimination. This is a new development, as federal investigations had so far exclusively been by HUD. The CFPB is an aggressive investigator, and AMCs, large firms and lenders should be wary.
For the last year, 40% of my legal work has been occupied by issues concerning alleged discrimination – balanced between representing parties in fair housing investigations and helping clients improve compliance and decrease risk. It’s the CFPB that makes me most anxious for clients in the future. I addressed some of the details of what I’m seeing in the most recent issue of the Appraisal Institute’s Valuation magazine. Here’s a snippet: “in a recent investigatory demand, the CFPB demanded that an appraiser produce more than five years of appraisal reports and work files — comprising more than 35,000 separate documents and more than 100,000 pages.” In all, we produced about 150 gigabytes of data.
My impression is that the CFPB will be using such initial “small” investigations to work its way up the food chain – AMCs, larger firms and lenders may be at the beginning of some serious pain to be inflicted by the CFPB.
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