16 THE NAFCU JOURNAL MAY–JUNE 2022 2. Using the Appraiser Quality Monitoring process, Fannie Mae sent feedback letters to appraisers who had a high frequency of findings. Fannie Mae has continued this type of monitoring as an additional safeguard against potential bias, and to track progress on reduced findings. Other steps Fannie Mae is taking to combat appraisal bias include: ■ Increasing the use of alternative-scope property valuation approaches, such as desktop appraisals and hybrid appraisals. ■ Building on existing safeguards to detect valuation errors, such as Collateral Underwriter® (CU®), which has a robust set of risk flags and messages for potential overvaluation risk, appraisal quality risk and property eligibility risk. CU routinely undergoes fair lending reviews by Fannie Mae’s Fair Lending team. ■ Fostering diversity in the appraiser workforce through the Appraiser Diversity Initiative (ADI), which is designed to attract new entrants to the residential appraisal field and overcome barriers to entry, such as education, training, and experience requirements. ■ Continuing to modernize the valuation approach for home loans through the use of data, technology, and process design. ■ Enhancing the tools appraisers use to help them more accurately select comparable properties and conduct adjustments, which will strengthen and provide more confidence in the appraisal process and product. Offering Multiple Appraisal Options The traditional appraisal process relies heavily on human observations that can be subject to conscious or unconscious bias. Although humans, and specifically appraisers, are still a vital part of the mortgage origination process, modern appraisal methodology involves significant reliance on objective data and can further assist appraisers in producing a more reliable and reproduceable appraisal. As an example, desktop and hybrid appraisals involve significant reliance on objective data and a more “armslength” process between the appraiser and the homeowner. Social distancing and travel restrictions due to COVID-19 provided an opportunity for a real-world test of alternatives to traditional appraisals. At the onset of the COVID-19 pandemic (2020–2021), Fannie Mae allowed exterior-only and desktop appraisals for certain loan types to maintain liquidity in the market and to help manage collateral. The temporary flexibility allowed appraisers to use information provided by parties to the transaction (borrower, real estate agents, property contact, etc.).
RkJQdWJsaXNoZXIy Nzc3ODM=