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20 | M R EP O RT FEATURE and then shared feedback letters with appraisers who had a high frequency of findings. We conducted our second round of text scanning on appraisals in the fall of last year, examining the most recent 18 months of appraisals, and found that the number of appraisers with findings has dropped signifi- cantly. Nearly 80% of the ap- praisers who previously received a feedback letter did not have a new finding. While the vast majority of appraisers do comply with our Selling Guide policies, we are continuing to conduct text scans of appraisals and provide feedback to appraisers, as needed, on an ongoing basis. Steinley: When we see even one story of a consumer who feels they were treated differently because of their race, it's upset- ting because that goes against everything appraisers stand for. The Appraisal Institute continues to work toward broader solutions to improve diversity, equity, and inclusion in housing to root out unconscious bias. An appraisal is one piece of a larger ecosys- tem to look at when it comes to housing issues. Appraisal groups are working alongside consumer groups, real estate brokers and agents, banks, government agen- cies, think tanks, and others to explore where housing inequities may stem from and what com- bination of solutions should be considered. What is the industry doing in terms of combating instances of appraisal bias? Williamson: Fannie Mae is continually engaging with stake- holders and our lender part- ners to understand and reduce potential instances of bias within the appraisal process, as well as listening to what consumers are experiencing. We are taking actions to reduce the risk of appraisal bias under six key pillars: Research, Monitoring and Quality Control, the Appraiser Diversity Initiative (ADI), Industry Engagement, the Appraisal Process, and Technology. This important plan includes technological advancements, such as the implementation of an un- dervaluation risk flag in Collateral Underwriter® (CU®). In mid- 2022, we made this risk message available in CU to help lenders and our internal reviewers identi- fy appraisals early in the process with a high risk of potential undervaluation. Early results are promising and starting to give us a better insight into instances and trends of undervaluation. For the industry, last year was a year of momentum, with appraisers embracing the need for more diversity and welcoming new entrants to the field with visible support for trainees. All of the major appraiser con- ferences included "Trainee Days," featuring reduced registration fees for trainees, job fairs, and oppor- tunities for mingling between veteran appraisers and people just starting in the profession, which is a big step forward for bringing new entrants into the appraisal field. Appraisal management com- panies (AMCs), other industry service providers, and individual appraisers donated their time and other resources to support aspiring appraisers by serving as advisors, sponsoring work- shops, and becoming supervisory appraisers through the ADI, which is designed to attract new entrants to the residential ap- praisal field, overcome barriers to entry such as education, training, and experience requirements, and foster diversity in the industry. The mortgage industry has also stepped up to educate the next generation of residential apprais- ers. For example, JPMorgan Chase & Company committed $3 million over three years to the ADI Scholarship Fund, which is man- aged by The Appraisal Institute. Steinley: The Appraisal Institute is spearheading initiatives and participating in broader ef- forts to effect change, such as backing broader solutions that advance equity, recruiting more appraisers of color and women through the Appraiser Diversity Initiative, and the organization's Practical Applications of Real Estate Appraisal (PAREA), and reinforcing ethics, education, and training. What do you feel are some solutions to overcoming appraisal bias? Williamson: It's central to Fannie Mae's mission to facil- itate equitable and sustainable access to homeownership, which includes an efficient, effective, and equitable home valuation pro- cess. Working closely with our industry partners, we must take a multipronged approach to iden- tify root causes of appraisal bias and to drive meaningful change through concrete actions, includ- ing appraisal modernization, en- hanced monitoring, research and analysis, continued development of the tools appraisers use to validate their opinions, expanded safeguards to detect valuation errors, and fostering diversity in the appraiser workforce. Importantly, we are continuing to perform research to analyze and understand the prevalence of bias in the appraisal process, which will allow us to be able to better identify root causes and solutions to knock down barriers during the home valuation pro- cess. Steinley: The Appraisal Institute believes instances of potentially subpar or otherwise problematic appraisals could be mitigated by hiring highly qualified appraisers who also have market and geog- raphy competency at the outset. The profession does have a "For the industry, last year was a year of momentum, with appraisers embracing the need for more diversity and welcoming new entrants to the field with visible support for trainees." —Jake Williamson, SVP, Single-Family Collateral Risk Management, Fannie Mae