Evidence in home price evaluations demonstrates racial bias in the appraisal process, leading to Black homes often being undervalued. Now, a group of Democratic senators led by Georgia’s Raphael Warnock has introduced new legislation to fight racial disparities in home valuations, which could lead to increased wealth among Black households.

Appraisal Modernization Act seeks to make home valuations fairer

Warnock recently introduced the Appraisal Modernization Act to combat racial bias in home evaluations. In a news release, the senator notes “several studies have identified a clear relationship between lower valuations and Black neighborhoods, revealed race was considered in the appraisal process, and concluded that White borrowers’ homes were consistently overvalued, but especially so in Black neighborhoods.” Warnock cites incidents in which homes owned by Black or Latino homeowners were reappraised at higher valuations when presented as white-owned homes.

To battle racial bias and make the appraisal process fairer and more transparent, the Appraisal Modernization Act would require “the Federal Housing Finance Agency (FHFA) to publish an online database of property-level appraisal and other home valuation data that lenders collect in connection with a mortgage application.” This move aims to clarify the appraisal process, making it easier to track and analyze appraisal data for potential bias. The proposed law would also allow homeowners to appeal an evaluation or get a second opinion on their homes’ valuations.

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Fighting bias and discrimination in housing practices

Warnock told The Atlanta Voice, “Home valuations are a critical part of the mortgage lending process and ensuring families can build generational wealth through homeownership,” adding, “But we know appraisals do not always protect or benefit everyone equally, particularly Black people and communities of color.”

The Appraisal Modernization Act is co-sponsored by Democratic Sens. Angela Alsobrooks of Maryland, Cory Booker and Andy Kim of New Jersey, Lisa Blunt Rochester of Delaware and Elizabeth Warren of Massachusetts.

The current legislation follows other bills introduced by Warnock earlier this year to make housing more affordable. It also comes in the face of Trump administration moves that undermine fair housing efforts. Earlier this year, the administration cut funding for fair housing and anti-discrimination enforcement. The Department of Housing and Urban Development also dropped several federal cases of housing discrimination in the South and Midwest, including instances in which HUD had already determined that racial discrimination had taken place.

Amid continuing signs of racial discrimination in housing and a presidential administration willing to turn its back on enforcing fair housing, Warnock’s new proposal would increase efforts to make the housing process fairer. If successful, the Appraisal Modernization Act would promote more equitable home valuations, which could increase household wealth for Black and Latino communities across the country.

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