Recently, the National Fair Housing Alliance (NFHA) joined leading civil rights and consumer advocates and issued a statement in a letter to The Appraisal Foundation (TAF) declining to join TAF’s consumer council. NFHA specifically pointed out some areas of concern it has with TAF’s structures and policies, according to a NFHA release.

“We are at this time declining the invitation to join The Appraisal Foundation’s Council to Advance Residential Equity (Council),” NFHA said in the release. “Recent research and news stories highlight how appraisal bias impacts consumers and communities of color and exacerbates the racial wealth gap. The need to reform the appraisal process and appraiser oversight is urgent and immediate. We commend TAF for taking certain initial steps toward reform.”

However, NFHA stated, it remains concerned about several aspects of TAF’s structures and policies, including governance, appraiser qualifications criteria and appraisal standards. In its letter, NFHA said it is “deeply concerned” that TAF has not yet reformed two critical aspects of its “pay-to-play” structure.

“First, industry sponsors pay an initial application fee and annual ‘donations’ for the right to appoint a trustee to the board of trustees,” the release stated. “Second, TAF keeps the Uniform Standards of Professional Appraisal Practice (USPAP) and related guidance behind a paywall. We are not aware of any other standard-setting organization that uses this structure.

“TAF’s appraiser qualification criteria pose at least three major challenges,” the release added. “First, despite the longstanding diversity issues, TAF has not begun a public, transparent collaboration with civil rights experts to review each barrier to entry to the profession. Second, TAF has yet to release robust and comprehensive fair housing training for appraisers. Third, as various groups encourage women and people of color to enter the appraiser profession, TAF has yet to focus on preparing new entrants to succeed in an era of data, innovation, and technology.”

As to appraisal standards, the NFHA pointed out TAF has yet to propose an exposure draft or advisory opinion that would provide guidance to appraisers to limit discretion in order to provide more accurate appraisals and prevent harm to consumers and communities.

“We remain committed to working in an independent capacity with TAF to provide feedback, advice, and the civil rights and consumer perspective. We will continue to attend meetings when invited and to comment on public exposure drafts,” the NHFA said. “We look forward to continued collaboration as TAF works to develop more equitable, transparent, and democratic structures and policies.”

Valuation Review reached out to TAF President David Bunton for a comment.

“The National Fair Housing Alliance was the first organization to recognize the need for a council at The Appraisal Foundation focused on consumers, civil rights and fair housing groups, and we moved quickly to implement their recommendation because we saw how critical this need was,” Bunton told us. “Our boards are currently working on projects to examine our governance, partnering with PAVE to examine the qualification criteria, and collaborating with fair housing experts to develop guidance for appraisers to root out appraisal bias. We will continue to work with NFHA and the other letter signatories on all of these efforts and hope they will join the Council to Advance Residential Equity soon.”

The statement outlined in the release was issued jointly by the NAACP Legal Defense and Education Fund, Inc., the National Community Reinvestment Coalition, the National Consumer Law Center (on behalf of its low-income clients) and the National Fair Housing Alliance.

The letter was signed jointly by the Americans for Financial Reform Education Fund, the Center for Responsible Lending, the Chicago Rehab Network, the Long Island Housing Services, Inc., the NAACP Legal Defense and Educational Fund Inc., the National Coalition for Asian Pacific American Community Development (National CAPACD), the National Community Reinvestment Coalition, the National Consumer Law Center (on behalf of its low-income clients), the National Fair Housing Alliance and UnidosUS.