Biden administration to fight racial bias in real estate appraisals

FILE PHOTO: A newly built home sits vacant with a “For Sale” sign in front, at the Courtland Ridge development in Alpine, Utah
FILE PHOTO: A newly built home sits vacant with a “For Sale” sign in front, at the Courtland Ridge development in Alpine, Utah, March 26, 2008. REUTERS/George Frey

By Trevor Hunnicutt

WASHINGTON – The Biden administration on Wednesday announced new steps to crack down on real estate appraisers who perpetuate property inequalities by assigning lower home price estimates to Black and Latino owners.

Mortgage finance agency Freddie Mac found in 2021 that Black and Latino people were more likely to have their homes valued under the agreed sales price than white home-sellers.

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.