"The Government Accountability Office (GAO) called on the Federal Housing Finance Agency (FHFA) to provide guidance to Fannie Mae and Freddie Mac regarding fair lending requirements for property technology deployed in the homebuying process. In a report released Thursday, the GAO concluded that online real estate platforms, automated valuation models (AVMs), underwriting systems and electronic closing products can simplify homebuying and reduce costs, but they also pose risks due to the use of artificial intelligence (AI)."
"According to the document, FHFA neither agreed nor disagreed with the recommendation. The agency did not immediately respond to HousingWire's request for comment. The report responds to a request from Rep. Maxine Waters (D-Calif.) and Sen. Elizabeth Warren (D-Mass.) to investigate the effects that AI and property technology may have on fair and affordable housing. The document is based on a literature review, industry and government reports, and interviews with officials and industry experts, and it was examined through the lens of relevant federal laws."
A federal watchdog urged the FHFA to issue written guidance clarifying how Fannie Mae and Freddie Mac must comply with fair lending requirements for property technology and AI in the homebuying process. Online real estate platforms, automated valuation models, underwriting systems, and electronic closing products can simplify homebuying and lower costs while creating risks from AI-driven bias. Chatbots or advertising algorithms can steer consumers in protected classes toward particular listings, and AVMs that rely on historic home-price data can perpetuate past discrimination. Underwriting tools and AI-trained models may also reflect biased historical data. FHFA neither agreed nor disagreed with the recommendation.
Read at www.housingwire.com
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