Flagstar donates $1 million to address the lack of diversity in the appraisal industry
Flagstar Bank’s $1 million donation will be used to recruit and credential diverse trainees as well as to investigate other ways to improve the licensing process. According to the Bureau of Labor Statistics, more than 90% of property appraisers in the US are white. Critics claim that appraiser bias causes lower property values for homeowners of color, which can limit their ability to sell their homes and perpetuate wealth gaps. He said that the Flagstar donation would help to improve industry entry requirements and rethink recruitment and training programs. Richardson stated, “It’s great news.” “We hope that the news spreads far and wide because we would like other evangelists and supporters to come in and support this.” Flagstar, the New York Community Bancorp’s banking unit, donated the money to the Appraiser Diversity initiative. The Appraisal Institute, Fannie Mae, Freddie Mac, and the National Urban League are all involved in the initiative. It will be used to recruit and credential diverse trainees and to sponsor workshops in specific markets. The group will also look at ways to improve licensing, such as simulating appraisals for trainees. He pointed out that minority homeowners are more likely to get less money for their homes if an appraisal is wrong. Smith stated in an interview that “we want to be part the solution here.” “We are not going to watch this happen. “A mystery-shopper survey last year that involved interracial couples in Baltimore found that white homeowners received home valuations that were approximately $6,800 higher than those of their Black counterparts. One homeowner was given an 11-week appraisal. 22 days was the longest time a white homeowner waited. The study was done by the National Community Reinvestment Coalition. It took 22 days for any white homeowner to wait. The agency that regulates state appraisals also held a hearing in January. It was attended by the heads of the Consumer Financial Protection Bureau and the Department of Housing Urban Development. Jonathan Miller, a New York City appraiser and CEO of Miller Samuel. Flagstar’s decision is “very encouraging,” he said, adding that it could signal that the banking industry is becoming more involved in solving the problem. Flagstar’s donation was also praised by the Appraisal Foundation, an industry group that develops rules for appraisal licensing. Wells Fargo announced a $5 million grant in December to help fix appraiser diversity. Dave Bunton, the president of the group, stated that the donation was “welcome news” and that he hopes many other groups will support this important initiative.