Bankers Concerned About Appraisals
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Community bankers said appraisals are becoming a concern…
A survey was distributed by state banking regulatory agencies in April and remained open through July. More than 600 community bankers from across the U.S. lent their voices to this year’s survey, and those views are captured in this volume.
Responses are summarized and presented in following five major areas: Local market conditions; regulation and supervision; small business lending; management structure and succession planning; and technology. The responses provide context for the data gathered through the survey and highlight some of the dierent challenges faced by community banks in different states.
The real estate appraisal portions of the survey are summarized as follows:
Bankers in Arkansas said that areas in which bankers see regulatory expectations as unreasonable, or where regulations are outdated, include appraisals and evaluations of real estate.
Connecticut community bankers suggested areas for immediate relief include increasing Currency Transaction Reporting (CTR) filing thresholds from $10,000 to $20,000 and increasing the appraisal threshold from $250,000 to $500,000.
Idaho community bankers are concerned about obtaining evaluations for real estate, citing issues with expense, time commitments and the relative value of appraisals versus evaluations which, according to regulatory guidance, are not much different from each other.
Kansas bankers recommended increasing the dollar threshold requiring a certified appraisal. The current amount of $250,000, set in 1994, was said to be out-dated, as prices obviously have increased.
Massachusetts community bankers report that CRE loans remain a lower risk for most banks, but there has been an increased scrutiny of appraisals, particularly on speculative development.
North Carolina bankers said appraisals are also becoming a concern, as appraisers from outside the local market are overvaluing properties for other lenders, leading to additional competitive pressure.
Bankers in South Dakota said regulatory relief for community banks should include revision of appraisal thresholds and appraiser qualification requirements.
Click here to read the 2017 “Community Banking in the 21st Century”