SPRINGFIELD – The Illinois Bankers Association (IBA) applauds House passage of legislation that would create a task force dedicated to reforming the home appraisal process to address inequalities in home ownership created by decades of policies that have particularly impacted minority homebuyers.
Sponsored by Rep. Lamont J. Robinson, D-Chicago, HB 4410 creates the Real Estate Valuation Task Force to address institutional racial and ethnic bias in the home appraisal process and propose reforms to this important part of the mortgage lending process.
“We should all be embarrassed about the long history of discrimination in housing lending for Black and Brown families, which result in very painful consequences that last for generations,” said Rep. Robinson. “This task force is an important step forward to recognize the damage from this institutionalized discrimination and develop a framework for changing how we value property to make sure all residents are treated fairly. I thank the lending organizations for working with me to create this task force and pursue solutions that will matter, especially in minority communities.”
Home appraisals are a common obstacle to obtaining a mortgage loan. According to a recent Lending Tree survey, 58% of Black homeowners believe their race, sexual orientation, or another protected demographic was factored into their home appraisals. Home appraisal valuations are set by appraisers, with banks and other mortgage loan originators strictly prohibited from setting these values.
However, Illinois is currently facing an appraiser shortage. As a result, appraisers are performing valuations with little first-hand knowledge about the communities they work in. The Real Estate Valuation Task Force would seek real solutions to address valuation disparities and engage more people in the profession, especially from communities that are most impacted by inequitable lending practices.
“On behalf of bankers across the state, we commend Rep. Lamont Robinson and the General Assembly for taking steps towards equitable reforms of the mortgage lending process. Inequitable lending in the homebuying process is a decades old problem, and the banking industry is dedicated to unraveling the policies that unfairly impact minority homebuyers,” said Ben Jackson, Executive Vice President of Government Relations for the IBA. “Addressing homeownership disparities requires participation from all parties in the homebuying process, and we look forward collaborating and enacting real change for home lending practices in our state.”
The measure now heads to the Senate for consideration.
About the Illinois Bankers Association
The Illinois Bankers Association is the voice of Illinois’ banking industry, dedicated to creating a positive business climate that benefits the entire banking industry and they communities they serve. Founded in 1891, the IBA brings together state and national banks and savings banks employing more than 105,000 people in nearly 4,500 offices across the state. The IBA is proud of its diverse membership, serving all sizes of financial institutions from the smallest community bank in the state to the largest national bank in the country.