17 minute read | May.23.2023
Regulators have proposed or implemented several changes affecting mortgages in the last few years related to:
Orrick’s Sasha Leonhardt and co-author Christine M. Acree chronicle key changes in a new article in The Business Lawyer, a journal of the American Bar Association.
The article details how regulators have extended pandemic relief programs meant to protect borrowers – and notes the possibility that the number of people covered could increase if economic conditions deteriorate.
The authors also explore the regulatory response to concerns about discrimination in real estate appraisals, including by a White House task force that recommended action last year. At issue is whether and to what degree protected class characteristics such as a borrower’s race may affect an appraiser’s determination of a home’s value.
The article concludes with a look at automated valuation models, which are the subject of rules that regulators are crafting. Those models became increasingly popular during the pandemic because they lower costs and protected appraisers at a time of social distancing. Although some say that removing human discretion will reduce bias in home valuations, regulators have been skeptical that computerized models will eliminate all bias.