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“I was so happy, but then it just sinks in. It sinks in, that what was devaluing my home was me.” — Carlette Duffy, Indianapolis homeowner who discovered her home had been under-appraised.
When a home is under-appraised, not only do homeowners miss out on the higher home valuation but so does the entire community (roads, bridges, fire departments, water and sewage systems, trash collection, street lighting, disaster relief, EMS, parks, schools, real estate agents, lenders, etc.). That is why it is baffling that the process for fair appraisals (specifically, when a value needs to be challenged) is so convoluted depending on where you are in the U.S.
Federal (or national) standards help to ensure that no matter where a U.S. homeowner has real estate, she can likely expect the process for a fair appraisal to be similar. This makes it easier for homeowners, but Newsflash: mostly everyone directly involved in the transaction, plus the surrounding community, stands to benefit.
Sadly, the recent (2024) policies — that made it easier for American homeowners to challenge an unfair appraisal — have been cut as the Trump Administration has made more federal fair housing rollbacks.
On March 19, 2025, the General Deputy Assistant Secretary for Housing, Jeffrey Little, sent a mortgage letter to all real estate brokers, closing agents, lenders, and other relevant parties rescinding three policies created to help ensure a nationwide standard for fair treatment even if an appraisal needs to be challenged.
How Little’s letter might hurt Fair Housing (and lending)
What is canceled: ML 2024-07 (Appraisal review and reconsideration of value updates)
This policy had nationwide rules to let borrowers ask for a second look if they thought their home was appraised too low (called a Reconsideration of Value). The icing on the cake was that this policy had rules to protect borrowers from paying extra costs if the appraisal was wrong. Now that it’s canceled, borrowers revert to possibly having to pay for a second appraisal, at no fault of their own, if the first one was unfair or incorrect.
The belated Shani Moss, who spent her last days trying to get a fair appraisal instead of recovering from cancer treatments and spending time with her family, was an example of why a nationwide standard is needed.
What is canceled: ML 2021-27 (Appraisal Fair Housing compliance and updated general appraiser requirements)
This policy ensured appraisers followed strict rules to avoid being unfair, like treating everyone equally regardless of their race or where they lived.
Little affirmed in his letter that:
“Prior to the publication of this ML, there were concerns that the Uniform Standards of Professional Appraisal Practice (USPAP) Ethics Rule was insufficient to clearly address the issue. Since the publication of ML 2021- 27, the Appraisal Standards Board (ASB) of the Appraisal Foundation amended the USPAP Ethics Rule in the 2024 edition of USPAP and resolved the concerns the ML intended to address.”
Despite this federal government rollback, The Appraisal Foundation is to be applauded for making this an ethical standard. Hopefully, it will remain in the absence of a nationwide enforceable standard.
What is canceled: ML 2024-07 (Appraisal review and reconsideration of value updates)
This policy required mortgage companies to double-check appraisals to ensure they were fair. In Little’s letter, he admitted that “industry feedback encourage a consistent industry-wide standard for processing ROVs” and that the Fair Housing Administration had only begun “collecting data to track Borrower-initiated ROV requests and their outcomes” in October 2024. As a result, Little acknowledged that “Given the short time frame since data collection started, there is insufficient data to conduct meaningful analysis or to draw conclusions on the impact of the policy.”
Yet, this consequential data will no longer be collected.
To give context to this policy, the recent 2025 Snapshot of Race and Home Buying in America by the National Association of REALTORS® Research Group found that every racial group (so this is not only a “Black issue”) surveyed believed they experienced unfair appraisals to some degree (Hispanic/Latino survey respondents were less than 1%). However, over ninety-two percent of those who experienced some form of unfair housing did not bother to report it.
Avoiding the McNamara Fallacy, those numbers matter.
In short, it’s no secret that reporting perceived unfair housing is not easy. Deferring to the appraisal “industry feedback” encouraging “a consistent industry-wide standard for processing ROVs,” will the Appraisal Foundation step in to make these rollbacks part of their standards and practices?
“The Fair Housing Act was a start, but our work is far from over.”
— Barbara Jordan
Lee Davenort is an international real estate educator (as well as a former RE/MAX managing broker and agent).
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: zeb@hwmedia.com.Dr. Lee Davenport is a real estate coach/educator and author.
