Can a lender be held liable for third-party appraisal valuations?

The U.S. Department of Justice and the CFPB have state that mortgage lenders can be held liable under federal law for relying upon discriminatory appraisals from third-party appraisers. Discriminatory appraisals are considered a violation of the Equal Credit Opportunity Act and the Fair Housing Act. Institutions must ensure that property valuations are compliant with fair lending principles, including the free-form text commentary. Regulatory findings have shown that the free-form commentary is a key risk factor that requires appropriate mitigation.