Appraisal and Evaluation Policies: Updating to Meet Regulatory Guidance
Are your institution’s appraisal and evaluation policies up-to-date? Is your lending function following the most current regulatory guidance including the guidance provided in the updated frequently asked questions (FAQs) that respond to questions many institutions have raised when interpreting the agencies’ appraisal regulations and guidance?
Appraisal and evaluation regulations and guidance have evolved over the years, therefore keeping appraisal and evaluation policies updated is an ongoing challenge. For instance, appraisal regulations were issued under Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Title XI) to deal with the S&L crisis. Then, there was the December 2010 Interagency Appraisal and Evaluation Guidelines (Valuation Guidelines) responding to the valuation issues resulting from the real estate bubble. In March 2016, the regulators issued the Interagency Advisory on the Use of Evaluations in Real Estate-Related Financial Transactions (Evaluations Advisory) to address when evaluations could be used in lieu of appraisals. There is also the Interim Final Rule on Valuation Independence (IFR on Valuation Independence) establishing independence rules for consumer purpose residential mortgage loans secured by a consumer’s primary dwelling. Institutions should also have a program for establishing the market value of real property to comply with the real estate lending standards, which require financial institutions to determine the value used in loan-to-value calculations based in part on a value set forth in an appraisal or an evaluation.
Given the variety of regulatory releases over the years that relate to appraisal and evaluations, it’s time to pause and review what should be included in your policies to ensure that your lending and administration staff are on the same page when managing appraisals and evaluations.
Please join our expert, Gary Deutsch, CPA MBA, as he discusses current appraisal and evaluation policy issues that institutions need to be aware of to comply with regulatory guidance and maintain a safe and sound loan portfolio.
WHAT YOU WILL LEARN
Some of the topics covered in this webinar include:
- Identifying the regulatory issues that should be included in your appraisal and evaluation programs
- Evaluating what appraisal exemptions apply and when they may not apply
- For new loans and subsequent transactions, determining when evaluations can be used instead of appraisals
- Identifying when an appraisal should be used, even if it’s not required
- How to comply with the regulator’s limited guidance for preparing evaluations
- What to consider when selecting appraisers and qualified evaluators
- How to validate AVM models and TAVs
- AND MUCH MORE!
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