14 THE NAFCU JOURNAL MAY–JUNE 2022 firmly committed to doing everything in our power to promote racial equity in housing,” said Jake Williamson, Fannie Mae’s Senior Vice President, Single- Family Collateral Risk Management. “Racial equity includes helping all borrowers receive a fair and impartial appraisal.” “While Fannie Mae’s longstanding policy explicitly prohibits discriminatory appraisal practices, Fannie Mae’s work to understand and combat appraisal bias is part of our ongoing commitment to identify and knock down barriers to homeownership, as well as part of our strategy to address inequalities in the housing finance system,” said Williamson. “NAFCU recognizes that property value is a key determinate of borrower credit risk and an important aspect of the mortgage process,” said Aminah Moore, NAFCU Regulatory Affairs Counsel. “NAFCU supports Fannie Mae’s initiative to address and minimize appraisal bias, and NAFCU further supports modernization of the appraisal process and the continued use of technology to assist in removing bias from the equation.” In 2021, Fannie Mae scanned 14 million appraisals from 2019 and 2020 to determine the extent of appraisers using terms specifically prohibited in Fannie Mae’s Selling Guide. In response to this work, the company took two immediate actions. 1. Fannie Mae’s June 2021 quarterly Appraiser Update newsletter featured tips on avoiding bias—or even a perception of bias—in an appraisal report along with a list of potentially problematic words or phrases that might imply demographics influences an outcome. In addition to research, other efforts to reduce opportunities for bias include enhanced monitoring of appraisal quality, increased industry engagement to gain additional perspectives, and improvement of the valuation process.
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