An article by HW discusses how FHFA is taking a swing at racial bias in appraisals.

The Federal Housing Finance Agency (FHFA) is the latest stakeholder to examine how racial bias may creep into property valuations.

In a Dec. 14 blog post, Fannie Mae and Freddie Mac’s regulator and conservator said it found examples of “overt references to race, ethnicity, and other prohibited bases under federal fair lending laws,” which FHFA said indicate the “continued presence of valuation bias.”

Appraisers are not supposed to base their analysis on protected classes, and in the Uniform Residential Appraisal Report, appraisers attest that “race and the racial composition of the neighborhood are not appraisal factors.” But when the FHFA hunted for examples of racial bias by keyword searching the free-form commentary section in millions of appraisal reports, it found thousands of references to race and ethnicity

Click here to read the entire HW article.