The Federal Housing Finance Company (FHFA) isn’t doing all that it might to forestall appraisal bias, according to the company’s Workplace of Inspector Normal.
In a report issued on Wednesday, the watchdog stated the regulator of Fannie Mae and Freddie Mac, which itself printed a report that drew consideration to racial bias claims in December 2021, ought to notify state regulators and licensing authorities when it finds instances of appraisal bias. It must also alert regulators and licensing authorities when it information complaints in opposition to value determinations, the OIG stated.
The OIG discovered that the FHFA in 2022 made 17 referrals and supplied 25.6 million energetic appraisal information to the U.S. Division of Housing and City Improvement (HUD), however didn’t take additional motion.
“The Affiliate Director of FHFA’s Workplace of Truthful Lending Oversight knowledgeable us that the Company doesn’t file complaints with the state licensing authorities and has no coverage in place on the topic,” the report stated.
The OIG additionally stated that whereas the FHFA recognized value determinations that made overt references to prohibited bases like race or colour in sure appraisal reviews it reviewed, the “FHFA has not decided the extent to which the Enterprises are utilizing value determinations that improperly think about bases which are prohibited by federal truthful lending legislation.”
The FHFA agreed to correctly file complaints with state regulatory businesses for every appraisal specified within the December 2021 evaluation. It additionally advisable that the FHFA coordinate with Fannie Mae and Freddie Mac to find out which value determinations have detected bias. The brand new insurance policies are to be in place by Might of 2023.