Biden administration to fight racial bias in U.S. real estate appraisals

WASHINGTON, March 23 (Reuters) – The Biden administration will announce on Wednesday new steps to crack down on real estate appraisers who assign lower home price estimates to Black and Latino homeowners, senior officials said.

Mortgage finance agency Freddie Mac (FMCC.PK) found in 2021 that Black and Latino people were more likely to have their homes valued under the agreed sales price than white homesellers.

Such an appraisal can limit the size of a mortgage that can be written on a property, forcing homeowners to sell at a lower price or cancel a sale altogether. It can also reduce the amount available during a refinancing.

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Senior administration officials said they are working to bolster appraisal standards, increase the diversity of the workforce tasked with creating those estimates and make it easier to report discrimination that violates federal law.

U.S. Vice President Kamala Harris will announce the release of the plan on Wednesday during a White House event, officials said.

U.S. officials say the lower appraisals have contributed to the wide gaps in wealth between Black and Latino Americans and their white peers. White applicants were found to have received appraisals lower than their contracted sales price 6.5% of the time, compared to 9.5% for Latino and 8.6% for Black applications, according to Freddie.

Last June, Joe Biden became the first sitting U.S. president to visit the Tulsa, Oklahoma site where hundreds of Black Americans were massacred by a white mob in 1921 and their property destroyed.

During a speech there, Biden said he would “combat racial discrimination in housing” and address racially biased home appraisals. read more

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Reporting by Trevor Hunnicutt; Editing by Heather Timmons and Karishma Singh

Our Standards: The Thomson Reuters Trust Principles.

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