Published: February 2023

Ensure borrowers understand their right to seek a second home appraisal; address bias in the re-appraisal request process

Advocates wrote to HUD supporting the agency’s plan to issue guidance on reconsiderations of value (ROV)—a mortgage borrower’s request for a new appraisal because they disagree with the appraiser’s initial valuation—but urging substantial improvement to the guidance to ensure that borrowers are aware of their ROV right and that bias in the appraisal process is addressed and tracked.

Consumer Action was one of a dozen advocacy organizations to sign on to a letter to the U.S. Department of Housing & Urban Development (HUD) regarding the agency’s guidance on Reconsideration of Value (ROV) requests made by borrowers to lenders offering FHA loans. The appraisal ROV process allows a consumer to dispute an appraiser’s valuation of a property. This is an important right because, despite the 1968 Fair Housing Act barring discrimination in home appraisals and other housing-related transactions, bias in appraisals still exists. If the borrower disputes the appraisal, the lender can ask the appraiser to reconsider the appraised value based on the concerns and any new information. In some instances, the lender can also order a second appraisal from a new appraiser. Unfortunately, lenders have not standardized the steps in the ROV process, often leaving consumers confused or unaware of their rights. While the groups support HUD’s plan to issue guidance on ROVs, they noted that the guidance needs substantial improvement to ensure that borrowers are aware of their appraisal dispute right and how to seek an ROV, and that lenders implement procedures that eliminate the chances of bias in handling ROVs. Among the groups’ suggested changes is to require lenders offering FHA loans to collect data on borrower ROVs and bias complaints so that HUD can better identify patterns of discrimination.

Lead Organization

National Fair Housing Alliance

More Information

Click here to read the coalition letter.

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