Thousands of Home Appraisals May Contain Racially Biased Language, Federal Regulator Finds

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Despite policies meant to bar race-related bias in assessing property values, many home appraisers continue to make references to the neighborhood’s racial demographics in their assessments of a home’s value.

That’s the takeaway from an examination of millions of property valuations conducted by the Federal House Finance Agency, the main regulator that oversees Fannie Mae and Freddie Mac. It’s the latest indication of how widespread racial bias in home appraisals may be. The FHFA is part of an interagency taskforce reviewing the role that such bias may play in housing inequity. A recent study from Freddie Mac found that 12.5% of homes in Black neighborhoods were valued below the contract price, compared with just 7.4% of homes in white neighborhoods.

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