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Trump’s War on DEI: Immediate Effects for Appraisers
by Isaac Peck, Publisher
Donald J. Trump kicked off his second term as President of the United States with a flurry of executive orders including renaming the Gulf of Mexico, declassifying the JFK files, giving TikTok an additional 90 days to court a buyer, and much, much more.
What about in the appraisal world? Trump issued several executive orders dealing with Diversity, Equity, and Inclusion (DEI) initiatives and these appear to be having an immediate effect on the profession. Among other things, one of the executive orders terminates “to the maximum extent allowed by law, all DEI…offices and positions…all ‘equity action plans,’ ‘equity’ actions, initiatives, or programs, ‘equity-related’ grants or contracts; and all DEI or DEIA performance requirements for employees, contractors, or grantees.”
While these orders have far-reaching effects and are highly controversial for many, one of the immediate effects that appraisers have noted is that the Property Appraisal and Valuation Equity (PAVE) task force appears to have been disbanded. Visitors to the PAVE website, https://pave.hud.gov/, will note a 403 Access Denied message that reads “You are not authorized to access this page.”
The PAVE task force was made up of 13 federal agencies and published several whitepapers, including a 58+ page Action Plan for how policymakers should address appraisal bias and advance valuation equity, with suggestions including exploring the “potential use of alternatives and modifications to the sales comparison approach that may yield more accurate and equitable home valuation.”
With PAVE suddenly disbanded, many appraisers have questions about what will happen to other appraisal bias related initiatives. Here is what Working RE is hearing on the streets about how the new Trump administration is impacting the narrative around appraisal bias issues.
Appraisal Coursework Focusing on Bias
With a clear mandate to walk away from DEI initiatives on the federal level, many appraisers are wondering what impact that will have with respect to the new 7-hour class on fair housing and appraisal bias that is set to become a requirement for all appraisers across the country in 2026.
The future of these coursework requirements is a little more nuanced as it is the Appraiser Qualifications Board (AQB), at The Appraisal Foundation (TAF), that sets these requirements for appraisers. As we all know, TAF is a private non-profit that wields a great deal of influence over the appraiser profession, but it is not a federal agency, nor is it controlled directly by any federal department.
Given the lack of federal influence over TAF, and the fact that the AQB is an independent board within TAF, whether the AQB chooses to revisit and/or roll back the fair housing and bias coursework remains to be seen. Of course, some states have passed state-specific laws that deal with coursework on appraisal bias, and those requirements exist outside of, and in addition to, the AQB requirements. Moreover, Trump has threatened to use the power of the Internal Revenue Service to revoke the non-profit status of organizations he sees as politically progressive, although it’s unclear whether he will target private professional organizations.
Another consideration is the fact that TAF signed a Conciliation Agreement with HUD in 2024, with the agreement being effective well into the year 2027. Sometimes a new administration’s executive orders will explicitly call for overriding agreements made in previous administrations, but the language of Trump’s orders are not always clear, and these questions are often haggled over in litigation. In any case, it will be interesting to see how such initiatives develop over the next 12 months.
The Naughty Word Lists
There have been widespread rumors amongst appraisers regarding whether the more “politically correct” requirements regarding subjective and “naughty” words will get rolled back at Fannie Mae and Freddie Mac (the GSEs), or even at the Department of Veteran Affairs (VA).
Insiders at the GSEs report that there are no immediate plans to change policy around appraisers’ use of subjective words, or appraisers’ use of words that identify “protected classes.” The move towards more objective words, descriptors, and so on, is about accuracy and objectivity for appraisers, and discrimination in housing is still illegal, one source told Working RE in a matter-of-fact way.
The VA, which cited PAVE’s action plan in several of its appraisal-related circulars over the last few years, is rumored to be preparing a circular that specifically addresses how it will be operating in Trump’s new world, but no official confirmation has been issued yet.
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HUD Complaints
Scott Turner, a former Texas State Representative, and a former professional football player who played nine seasons in the NFL, is Trump’s nominee for Secretary of the United States Department of Housing and Urban Development (HUD). ProPublica reports that while serving in Austin, Turner opposed many attempts to expand affordable housing, but that the Trump administration praised Turner for his work in facilitating the creation of Opportunity Zones in disadvantaged communities.
On January 16, Turner spoke before the Senate Banking, Housing, and Urban Affairs committee while seeking confirmation from Congress for his position. His remarks provided hints for how he plans to run the department. Turner argued that today HUD is “failing at its most basic mission,” which as he sees it, is to combat homelessness in America. He promised the Senators he would review every program and HUD to determine which ones work and which ones do not and repeatedly promised to streamline the agency to make it more efficient.
At the end of the hearing, Turner had an exchange with Democratic Senator Raphael Warnock of Georgia that is worth quoting in full.
Transcript:
Warnock: Will you commit to vigorous enforcement of the nation’s fair housing laws and be a strong voice in the administration in favor of protecting existing fair housing laws from efforts to weaken them or to roll them back?
Turner: I do commit to upholding the fair housing laws, yes sir.
Warnock: One of the overlooked drivers of racial wealth and equity within our housing system is the very well documented pattern of lenders and the appraisal market persistently assessing the value of black and brown homes lower than white homeowners. You and I discussed this a little bit the other day in my office. And my staff sent you some background information and data on appraisal bias. This is real money. Hurting real people. In part, at my urging, the Biden administration took steps to crack down on appraisal bias with HUD leading an interagency effort. If confirmed, will you commit to continue to use HUD’s tools and authorities to crack down on appraisal bias including by continuing to provide consumers with data to push back on suspected bias?
Turner: Thank you Senator. Thank you for the information that you sent. I have begun to read [sic] and I look forward to exploring that more with you. And as I said before I do commit to upholding the law as it is on the books against all illegal discrimination.
Warnock: Including appraisal bias?
Turner: We will continue to look into that and I look forward to working with you on that and becom[ing] more well studied. Thank you.
Warnock: I hope you will continue HUD’s important work on this matter even as we go into this weekend of celebrating Dr King’s birthday.
Under the Biden administration, as Warnock revealed, HUD had been leading efforts to “crack down” on appraisal bias, and the result was that many bias complaints filed with HUD were referred directly to the Washington D.C. office. Today, many appraisers are still waiting for resolution—with some complaints still open after three years or more of sitting in limbo.
With a clear anti-DEI tone coming from the top of the Trump administration, and a HUD Secretary nominee that is focused on efficiency, it will be interesting to see how HUD’s approach to the appraisal bias complaints shifts in the coming months. Time will tell.
Firing CFPB Director
While not related to DEI Initiatives, on Saturday, February 1st, 2025, Trump fired Rohit Chopra, the Director of the Consumer Financial Protection Bureau (CFPB). Chopra was thought of as an “aggressive” regulator for banks and the financial system as a whole, but his popularity amongst the left and his close relationship with progressive Senator Elizabeth Warren (D., Mass) all but sealed his fate in the new Trump Administration.
Chopra had appeared sympathetic to residential real estate appraisers at times, and put out a request for information from the public and industry stakeholders in summer 2024 with regards to “junk fees” in mortgage transactions. Nearly 100 comments were submitted dealing with appraiser fees, with dozens of appraisers urging the CFPB to take action regarding the bundling of appraiser fees and AMC fees into a single “Appraisal Fee” on the TRID disclosures.
Chopra was also rumored to have met with the Appraisal Regulation Compliance Council (ARCC), led by Josh Tucker, which has been collecting examples of egregious fee splits where some AMCs have taken up to 80 percent of the “Appraisal Fee.”
In a letter Chopra wrote to Trump and posted to his Twitter account the same day he was fired, Chopra wrote that he was “proud” of the work the CFPB did, which included leading “efforts across the government to stop the scourge of junk fees in banking and across sectors of the economy.”
It will be interesting to see who is tapped to replace Chopra and whether or not the CFPB will continue to pursue some of the initiatives that Chopra set in motion.
About the Author
Isaac Peck is the Publisher of Working RE magazine and the President of OREP, a leading provider of E&O insurance for real estate professionals. OREP serves over 10,000 appraisers with comprehensive E&O coverage, competitive rates, and 14 hours of free CE for OREP Members (CE not approved in IL, MN, GA). Visit www.OREP.org to learn more. Reach Isaac at isaac@orep.org or (888) 347-5273. CA License #4116465.
OREP Insurance Services, LLC. Calif. License #0K99465
by Mark S. Davis
Appraisers research recent sales in a neighborhood choosing the most comparable (similar) properties that sold, then analyzes those sales adjusting for differences such as age, condition, building size, quality, lot size, access, and other physical characteristics. Recognizing that “location, location, location” is by far the most important factor, it is important to choose sales located nearest to the subject and the best sales are located in the same neighborhood where residents have access to the same schools, shopping, services, crime rates, and other external surrounding influences. Recognizing that the data reflects a market price level in one neighborhood that is higher than market price levels in other neighborhood is not bias as it has nothing to do with race. It is an honest, unbiased accounting of reality reporting what the market is indicating.
-That is, people who purchase homes are obviously willing to pay more for homes in some neighborhoods than they are in other neighborhoods, regardless of racial demographics, even if the house is physically similar. To ignore reality in favor of injecting bias into appraisals to favor any race is unethical and creates a moral hazard for lenders. This will also result in borrowers being stuck with inflated upside-down loans with higher payments. Perverting the market by pressuring appraisers through law and media demonization is wrong on so many levels.
by RG
The internet “Wayback Machine” has cached this website https://pave.hud.gov/ on 1/19/2025.
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