Tagged: The Federal Deposit Insurance

The Raising of the De Minimus and Its Impact on the Appraisal Industry 11

De Minimus Impact on the Appraisal Industry

THREE changes to the de minimus have been experienced, with very little negative impact to appraising as a whole… Folks, anytime there is a major change proposed or activated within the appraisal profession, many appraisers go into hyperventilation mode. The action taken on August 20, 2019, by the FDIC to raise the de minimus LOAN VALUE from $250,000 to $400,000 has had such an effect among many, but it may not be as dire as anticipated. An appraiser sent this 2018 HousingWire article to me earlier today: Within the body of the article, this is stated, which is taken from...

The FDIC Says NO to Appraisals - Appraiser Connections AMC Folds 10

FDIC Says NO to Appraisals

The FDIC voted to increase the minimum appraisal threshold to $400,000 for residential appraisals, despite the overwhelming opposition. The vote was quietly supported by the Consumer Financial Protection Bureau (CFPB). Maxine Waters and The Appraisal Foundation condemn the actions of the FDIC. See The Appraisal Foundations response below. (Washington, DC) August 20, 2019 – The Appraisal Foundation President David Bunton issued the following statement after the final rule exempting residential real estate transaction of $400,000 or less from appraisal requirements was approved by the Federal Deposit Insurance Corporation. “When the proposed rule was announced in November 2018, The Appraisal Foundation...

Sunshine Act - Federal Agencies Changing FIRREA & Raising De Minimis 5

Federal Agencies Changing FIRREA

VaCAP has just been made aware of a Sunshine Act Meeting that will take place on Tuesday August 20, 2019. We have been told that the FDIC meeting on Tuesday will vote with no discussion to raise the residential de minimis. This is scheduled to happen despite the volumes of opposition and in the wake of a similar act by the FFIEC to grant appraisal waivers in North Dakota. The Federal Financial Regulators are changing FIRREA through rules and bypassing Congress in doing so. FIRREA was put in place for a reason and is being reduced to rubble by agencies...

Should We Raise the Appraisal Deminimus Threshold to $2 Million? 7

Should We Raise the Deminimus to $2 Million?

Bank regulators are nearing a decision to raise residential real estate transactions appraisal threshold to $400,000 from $250,000, for certain transactions. Perhaps it should be set to $2 Million, or $5 Million. It strikes me that we have two separate taxpayer regulatory/administrative/quasi-governmental organizations working in opposition. On one hand we have the Appraisal Subcommittee and The Appraisal Foundation (TAF), and 50+ state organizations attempting to regulate, license, and control the education of appraisers. USPAP, (Uniform Standards of Professional Practice) is promulgated by the Appraisal Standards Board (ASB) of the TAF.  USPAP compliance is required for federally related transactions. USPAP comprises two parts:...

Increased Regulatory Persecution of Real Estate Appraisers - USPAP 21

Increased Regulatory Persecution of Appraisers

The current and proposed revised version of USPAP also opens the door to increased regulatory persecution of licensed and certified real estate appraisers, while leaving all others that opine about values with no constraints, rules or limitations. I was recently asked to consider a proposed change to USPAP. As received in my email: “Also this, in the 3rd exposure draft 239 The appraiser is not required to title an appraisal report using specific terminology because 240 USPAP compliance is measured by the substantive content of a report, not by what the 241 report is called. The use of labels such as analysis,...

Comments Needed for Proposed Rule to Amend Appraisal Requirements 8

Comments Needed on Appraisal Requirement

The OCC, Board, and FDIC (collectively, the agencies) are inviting comment on a proposed rule to amend the agencies’ regulations requiring appraisals for certain real estate-related transactions. The proposed rule would increase the threshold level at or below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000. Consistent with the requirement for other transactions that fall below applicable thresholds, regulated institutions would be required to obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices. The proposed rule would make conforming changes to add transactions secured by...

The Erosion of Bank Underwriting Standards. Let's Get Rid of Appraisers. 18

Let’s Get Rid of Appraisers. What Could Go Wrong?

Why would regulators fundamentally weaken bank underwriting standards? Appraisers Warned The World In The Late 1990s And No One Listened. It Is Now Time To Listen Again as History is About to Repeat Itself. There’s a proposal from the FDIC, Federal Reserve, and Treasury Department not to require appraisals for some mortgages under $400,000. The Trump Administration wants to disrupt the role of appraisers, but that’s not a good idea. This change can impact several groups in particular: 1) Consumers: Removing appraisers from transactions can mean a lot of loans get made that shouldn’t be made. Does that sound familiar? We...

Proposal to End Appraisal Requirement on Home Sales of $400k or Less 50

Proposal to End Appraisal Requirement

Regulators’ Proposal to End Appraisal Requirement on Some Home Sales of $400,000 and Below… The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve released a proposal that would increase the appraisal requirement from $250,000 to $400,000, meaning that certain home sales of $400,000 and below would no longer require an appraisal. According to data provided by the FDIC, the agencies estimate that increasing the appraisal threshold from $250,000 to $400,000 would have exempted an additional 214,000 residential mortgages at regulated institutions from the agencies’ appraisal requirement in...

When an Appraisal is Not Required - Appraisals & Evaluations Regs 4

Appraisals NOT Required

…is not required to obtain an appraisal under other law… The Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter to US banks on 10/16/18, which incorporates Appraisal and Evaluation regulations and guidelines. This consolidates previously issued regs and guidelines into one document: Letter  FIL-62-2018 Part 323 – Appraisals Appraisal and Evaluation Guidelines 2000 – Rules and Regulations PART 323—APPRAISALS § 323.3 Appraisals required; transactions requiring a state certified or licensed appraiser. (a) Appraisals required. An appraisal performed by a state certified or licensed appraiser is required for all real estate-related financial transactions except those in which: (1) The transaction value is $250,000 or less;...

LREAB Response to FTC Allegations 15

LREAB Response to FTC Allegations

FTC seeking to punish LREAB for following federal regulatory mandates… BATON ROUGE, LA (May 31, 2017) – In an administrative complaint filed today by the Federal Trade Commission (FTC), it was alleged that the Louisiana Real Estate Appraisers Board (LREAB) had fixed the minimum price of residential real estate appraisals by enforcing the Board’s obligations under federal law to ensure that appraisers are paid customary and reasonable fees for their services. Bruce Unangst, Executive Director of the Louisiana Real Estate Appraisers Board (LREAB), said: “Respectfully, the FTC is just plain wrong. By issuing this legally faulty and factually incorrect complaint,...

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