Appraisers' Free Forum

SUMMARY: The OCC, FRB, FDIC, OTS, and NCUA (the Agencies), request comment on the proposed Interagency Appraisal and Evaluation Guidelines (proposed Guidelines). The proposed Guidelines, which would supersede the 1994 Interagency Appraisal and Evaluation Guidelines (1994 Guidelines), reflect revisions to the Uniform Standards of Professional Appraisal Practice (USPAP) and the evolution of collateral valuation practices, such as the use of automated valuation models (AVMs). The proposed Guidelines also incorporate refinements made by the Agencies to the supervision of regulated institutions’ appraisal and evaluation programs since 1994 and reflect the participation of the NCUA, which was not a party to the 1994 Guidelines. The proposed Guidelines are intended to clarify the Agencies’ real estate appraisal regulations and promote a safe and sound real estate collateral valuation program.

http://www.fdic.gov/news/news/press/2008/pr08117a.pdf

TB

From the proposed guidelines:

"Further, this section was revised to reflect the inclusion of a new appendix (Appendix B) in the proposed Guidelines on evaluation alternatives. This new appendix provides a discussion of appropriate practices and controls regarding an institution’s use of AVMs and tax assessment valuations as evaluation alternatives. This section also addresses the Agencies’ expectations for institutions to establish a process and procedures for determining the appropriate use of evaluation alternatives for a given transaction or lending activity, considering associated risk."

Basically, the proposed guidelines are just another jam job for appraisers. There is a section dealing with loan mods that indicates new appraisals are not necessary.

The NAR lobby has done its job well, too. Bottom line, everyone still wants the independent fee appraiser out of the loop despite any window dressing to the contrary.

Steve Owen wrote:Interesting:

If applicable, the appraisal should include three approaches (cost, income, and sales comparison) to analyze the value of a property, and should reconcile the results of each approach to estimate market value.

It sounds like they will no longer allow banks (one in particular comes to mind) to order appraisals with one approach to value... if the other approaches are "applicable" they must be included.

My Emphasis

Also sounds to me like it just jerked the rug out from under Fannie's new MC form and the constant bantering ("statements") about the "cost approach may be used for insurance purposes". That statement, "if applicable", may have just overridden any and all of the other BS that we've heard over the past several years.

Comments? Feedback?

That statement, "if applicable", may have just overridden any and all of the other BS that we've heard over the past several years.

Could this be the return of sensibility?

TB