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“We expect that many orders will need to be upgraded to a full interior and exterior inspection assignment because of the lack of quality and/or confidence in the data,” Mr. Bishop said.
Abena Horton, a Black homeowner who saw her home’s appraised value jump by 40 percent in 2020 when she removed evidence of her race from her house, said the move made her optimistic that the industry was making real strides to address a history of racism.
“I’ve always thought, there’s got to be a solution to this,” she said about persistent allegations of minority homeowners receiving lowballed appraisals. “The most important part is that major institutions are hearing these stories and acting on it. It’s very encouraging.”
Despite the severity of the issue of racial bias, Phil Crawford, a Cincinnati-based appraiser who has spoken about desktop appraisals on his podcast, Voice of Appraisal, said a widespread shift to desktop valuations could pose a risk to financial markets. A more targeted solution, he said, would be to ensure that appraisers received better training on Fair Housing laws (in many states, there is no requirement for appraisers to undergo ongoing fair housing training after earning their credential).
“Watering down the traditional appraisal process that we have today puts Fannie Mae into a dangerous position,” he said. “Remember, only 4 or 5 percent of their loans had to go into foreclosure to create the great financial crisis.”
“We’re living in a world of black swans right now,” he added, “and with all the uncertainty, it’s a bad time to implement some new product that may or may not be successful.”
But Mr. Wingert, of Zillow, disagreed.
“You’re entering just as many data points as you would in an in-person appraisal, and in some ways, you’re able to even leverage more,” he said. “Will this be a magic fix? Maybe not. But it’s definitely another tool in the toolbox for trying to combat racism.”
Source: | This article originally belongs to Nytimes.com
