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ARTICLE · 18 MARCH 2022

Appraisal Values And Lender Liability: Art, Science, Or Gamble?

Alston & Bird
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While the mortgage industry continues to evaluate the nature and extent of bias in the home appraisal process, no one has yet come up with a solution for detecting and addressing it.

United StatesFinance and Banking
Nanci Weissgold
Nanci Weissgold
Melissa Sanchez Malpass
Melissa Sanchez Malpass

Executive Summary

While the mortgage industry continues to evaluate the nature and extent of bias in the home appraisal process, no one has yet come up with a solution for detecting and addressing it. Our Financial Services & Products Group highlights the tension between the purpose and design of the appraisal process and its effect on borrowers and communities of color.

  • How can a lender ensure that its loans are supported by adequate collateral while being mindful of potential appraisal bias?
  • What steps can a lender take to eliminate fair lending risk, while working within the current appraisal framework?
  • How can the mortgage industry work together to eliminate potential bias via conscientious enhancements to the appraisal process?

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