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Abstract: 

This article addresses the subject of appraisal discrimination based on race, also referred to as appraisal bias, particularly the type of bias – conscious or unconscious ˆ’ that results in the homes of some minority mortgage loan applicants being undervalued. It describes the harm that such undervaluations can cause, discusses recent efforts and plans by the federal government to eliminate or reduce incidents of undervaluations resulting from appraisal bias, and explains several potential negative impacts of those efforts and plans on residential mortgage lenders and how lenders can best deal with those impacts.

Keywords: Uniform Standards of Professional Appraisal Practice (“USPAP”); Appraisal Subcommittee of the Federal Financial Institutions Examination Council (“FFIEC”)

Affiliations:  1: Holland & Knight, LLP; 2: Holland & Knight, LLP.