www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

July 11, 1996
 
MORTGAGEE LETTER 96-36
 
TO:  ALL APPROVED MORTGAGEES
 
SUBJECT:  Lender Selection of FHA Appraisers - Opportunities for
            Female and Minority Appraisers
 
     In response to the 1990 Cranston-Gonzalez National
Affordable Housing Act, the Department of Housing and Urban
Development (HUD) issued regulations permitting lenders to select
their own appraisers.  During the process of developing these
regulations, the Department was concerned that minorities and
women might be adversely affected by the development and use of
the new HUD appraiser Roster.  This concern was discussed in
Mortgagee Letter 94-54 dated November 7, 1994.   At that time,
the Department indicated its anticipation that use of the new
Roster would result in the use of female and minority appraisers
consistent with their presence in the Roster.  In addition, the
regulation and Mortgagee Letter 94-54 emphasized that the
Department will not countenance discrimination based on sex and
race by lenders in their selection of appraisers.
 
     Based upon recent reports from the Department's Computer
Homes Underwriting Mortgage System (CHUMS), it appears that
minority and female appraisers are obtaining significantly less
than a proportional amount of appraisal assignments.  These
numbers do not necessarily represent discrimination, nonetheless,
they are grounds for concern.  We request that your appraiser
assignment process be reviewed to ensure that female and minority
status appraisers receive a fair share of appraisal assignments
commensurate with their representation on the appraiser's Roster.
 
                               -2-
 
     Upon request, the Department will provide a list of female
and minority appraisers to lenders that wish to know the names of
these appraisers.  If any lender requires assistance
in identifying female or minority appraisers, a list may be
obtained either through
Chums Lender Access System (CLAS) or by calling your local HUD
office.  Further, the Department will continue to use its CHUMS
system to monitor the lender's choice of appraiser and the sex
and race of appraisers that are being chosen.
 
     Thank you for your attention to this matter.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing-
Federal Housing Commissioner