Congress moves to strip mortgage-lending safeguards on automated home valuations
H.J.Res. 52 — Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Federal Housing Finance Agency relating to "Quality Control Standards for Automated Valuation Models". · Filed by Andrew Clyde (R-GA) · Introduced Feb 12, 2025 · Referred to committee
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What it does
This resolution disapproves a Federal Housing Finance Agency rule requiring quality-control standards for automated home-valuation models used in mortgage lending. If passed, the rule would be nullified and have no legal effect, allowing lenders to use automated valuation models without the FHFA's new quality-control requirements.
Why we flagged it
This is a Congressional Review Act (CRA) disapproval resolution targeting a specific FHFA rule. CRA resolutions are procedural instruments that nullify agency rules; this one targets consumer-protection standards in mortgage lending.
What the text implies
- Automated valuation models (AVMs) are widely used in mortgage underwriting; removing quality-control standards may increase the risk of systematic valuation errors that disproportionately affect borrowers in undervalued neighborhoods or those with limited appraisal alternatives.
- The FHFA rule likely addressed concerns about AVM bias and accuracy in the post-2008 mortgage crisis context; its disapproval may weaken defenses against discriminatory lending outcomes tied to flawed automated valuations.
The full analysis lists 3 implications of this text.
Who stands to gain
mortgage lenders and servicers; automated valuation model vendors and fintech platforms; real estate technology companies