Attribute misreporting and appraisal bias.

This article investigates the consistency of property attribute reporting by residential appraisers using a large dataset of 4.6 million loan applications from 2013 to 2017. It identifies a specific channel of appraisal bias whereby some appraisers strategically under-report attributes of comparable properties ("comps") to inflate the appraised value of subject properties, particularly when the contract price exceeds Automated Valuation Model (AVM) estimates. This misreporting is prevalent across appraisers of varying experience and geographic markets and is associated with a 9.8 percent higher likelihood of serious loan delinquency among highly leveraged borrowers. The study suggests that creating a national, auditable database of appraiser-reported property attributes could reduce such biases and improve mortgage market transparency.