U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner and Acting Administrator of the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) Jeffrey Clark have announced the termination of policies introduced under the Property Appraisal and Valuation Equity (PAVE) task force. As part of the PAVE task force, members were directed to issue guidance on anti-discrimination obligations, review policies and practices, and issue new policies focused on “eliminating bias and advancing equity in home appraisals.”
Eliminating core policies of the PAVE Task Force upholds President Trump’s Executive Orders, including Ending Radical and Wasteful Government DEI Programs and Preferencing and Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis.
The termination of specific policies eliminates unnecessary regulatory hurdles imposed on lenders, appraisers, and other program participants, which will allow the Federal Housing Administration (FHA) to better serve American homebuyers and homeowners.
“By tearing down these onerous hurdles, we’re freeing professionals from a tangle of red tape that drove up costs, inhibited access to homeownership, and discouraged market participation,” said HUD Secretary Turner. “Under President Trump’s leadership, the Biden-era’s obsession with DEI and overregulation is over. At HUD, we’re restoring common sense and putting the American Dream of homeownership back within reach.”
On June 1, 2021, President Joe Biden announced the creation of the PAVE Task Force, co-chaired at the time by then HUD Secretary Marcia Fudge and White House Domestic Policy Advisor Susan Rice. The Task Force was directed to evaluate the causes, extent, and consequences of appraisal bias and to establish a transformative set of recommendations to root out racial and ethnic bias in home valuations. The 13 member agencies and offices of the Task Force engaged philanthropic organizations, academics, civil rights leaders, housing industry stakeholders, and everyday Americans who currently own, or aspire to own, a home. The PAVE Task Force heard their stories, perspectives, and ideas, and committed to a set of actions to help ensure that every American has a chance to build generational wealth through homeownership.
“The myth is that wokeism is just a social policy. And it surely is corrosive social policy,” said Acting OMB OIRA Administrator Clark. “But, in reality, wokeism at HUD was brass-tacks economic policy that snatched away the American Dream of homeownership from an entire generation. That ends today.”
Data from the American Enterprise Institute (AEI) in the report, “Racial Bias in Appraisals: New Research,” concludes that other characteristics unrelated to race—including educational attainment, average credit score, and family formation—are more likely significant drivers in differences between home values and appraisal outcomes.
“We’re encouraged that HUD and other agencies are beginning to roll back certain PAVE-inspired policies adopted by the Biden administration,” said Tobias Peter and Ed Pinto, Co-Directors at the AEI Housing Center. “These actions were driven by claims of race-based disparities in home values, mortgage denial rates, and appraisal under-valuations. These claims ignored AEI Housing Center research that found similar disparities in white communities with similar socioeconomic status, thereby invalidating the argument that the disparities were race-based.”
The terminated policies related to Reconsideration of Value and Appraisal Fair Housing Compliance include:
According to a HUD release, current laws, including The Fair Housing Act and Equal Credit Opportunity Act (ECOA), prohibit discrimination in all housing-related transactions including in the homebuying and lending processes. The Fair Housing Act and ECOA will continue to be enforced.
The post HUD and OMB Begin Rollback of PAVE Task Force first appeared on The MortgagePoint.
