The U.S. Department of Justice and the CFPB have state that mortgage lenders can be held liable under federal law for relying upon discriminatory appraisals from third-party appraisers. Discriminatory appraisals are considered a violation of the Equal Credit Opportunity Act and the Fair Housing Act. Institutions must ensure that property valuations are compliant with fair lending principles, including the free-form text commentary. Regulatory findings have shown that the free-form commentary is a key risk factor that requires appropriate mitigation.
Can a lender be held liable for third-party appraisal valuations?
Fair and Inclusive Mortgage Lending Outreach is the premier 2023 resource guide for implementing fair lending goals. Covers modern-day redlining, appraisal equality, marketplace demographics, credit needs assessment, peer analysis, product enhancement, community outreach, and preparing for an examination. PDF format with dozens of infographics and links to resources.
First published on 08/06/2023