Comments Needed on Appraisal Requirement
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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 residential property in rural areas that have been exempted from the agencies’ appraisal requirement pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act to the list of exempt transactions. The proposed rule would require evaluations for these exempt transactions. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the proposed rule would amend the agencies’ appraisal regulations to require regulated institutions to subject appraisals for federally related transactions to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice.
Read the entire proposal and comment here.
Cost and Time Savings. Commenters to the EGRPRA process and in response to the CRE NPR that supported a residential threshold increase noted that obtaining an appraisal for a residential real estate transaction adds to the cost of the transaction, which is often passed on to the consumer, and can delay the closing of a transaction when an appraiser cannot complete the appraisal on the preferred schedule and increase the consumer’s costs. Thus, reducing regulatory burden by increasing the appraisal threshold for residential real estate transactions may provide both transaction cost and time savings for both regulated institutions and consumers…
The United States Department of Veterans Affairs’ appraisal fee schedule? (46) for a single-family residence reflects that the typical cost of an appraisal generally ranges from $375 to $900, depending on the location of the property. The limited information available on the cost of evaluations and appraisals suggests that there could be material cost savings in connection with the valuation of the property for regulated institutions and consumers where an evaluation, as opposed to an appraisal, is obtained.
Question 1. The agencies invite comment on the cost data for evaluations and appraisals detailed above. Should the agencies consider other data and data sources in assessing the costs of appraisals and evaluations to regulated institutions and consumers?..
Thank you for posting this. Of high importance that appraisers contribute with a letter of some sort. Talking points? Share your letter for copying? I’ll use the paper mail option most likely and will try and review other comments first.
Paper mail address per directions
Legislative and Regulatory Activities Division
Office of the Comptroller of the Currency
400 7th Street SW, Suite 3E–218
Washington, DC 20219
regulations.gov then search Docket ID OCC–2018–0038
Here is the stated location from the register notice, to review comments electronically: View All Comments
All loans should require 3rd party appraisals to ensure that the borrower is also protected. I for one have done many appraisals that did not make value. Now the borrower stops paying for the loan and now who is going to pay the debt? Not me again?!
As for the lack of appraiser, there is not a lack of them it is that we want a fair fee and the time to complete a credible report.
Here we go again !!!
If they want cheap and fast reduce our reporting requirements / guidelines / we can produce a “short form”. It will be a better product then “zillow” !!! Hope Freddie / Fannie get this new form right ! Reduce liability and the 7 year file storage requirement for the appraiser.
REALLY!! Who does this benefit?? Not the consumer!! ONLY Banks & a few big AMC’s pushing the issue.
I believe the general public values the Appraisal Industry. We get requests from the public for many reasons, tax appeal, estate planning, what to list a property for FSBO, fair market for divorce, etc…….. Do you think the public would be willing to replace the traditional appraisal (same appraiser inspects the property, researches the market and provides a value with reconciliatio ) all to save $100 for a “evaluation”.
I can’t believe the government will approve this……….uggggh.
“The government”, a misnomer in this instance. The lenders write their own regulations in a revolving door system. Lenders have never been and will never be keen to additional checks and balances. Those who do not know history are condemned to repeat it. Problems with lenders and money changers were one of the cornerstones for the American Revolution. Same old tricks, different day. The real problem is the general public actually trusts these organizations. We’re living in the last days of failing consumer protection as the public continues to excercize institutional memory and prioritizes debt over personal financial security. These protections being eliminated now had previously grew up around a different public mindset… What’s in your wallet?
Office of the Comptroller of the Currency: You may submit comments to the OCC by any of the methods set forth below. Commenters are encouraged to submit comments through the Federal eRulemaking Portal or e-mail, if possible.
Please use the title “Real Estate Appraisals” to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:
• Federal eRulemaking Portal—“Regulations.gov”: Go to http://www.regulations.gov. Enter “Docket ID OCC-2018-0038” in the Search Box and click “Search.” Click on “Comment Now” to submit public comments.
• Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments.
• E-mail: firstname.lastname@example.org.
• Mail: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street, SW., suite 3E-218, Washington, DC 20219.
• Hand Delivery/Courier: 400 7th Street, SW., suite 3E-218, Washington, DC 20219.
• Fax: (571) 465-4326.
Instructions: You must include “OCC” as the agency name and “Docket ID OCC-2018-0038” in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website without change, including any business or personal information that you provide such as name and address information, e-mail addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.
You may review comments and other related materials that pertain to this rulemaking action by any of the following methods:
• Viewing Comments Electronically: Go to http://www.regulations.gov. Enter “Docket ID OCC-2018-0038” in the Search box and click “Search.” Click on “Open Docket Folder” on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on “View all documents and comments in this docket” and then using the filtering tools on the left side of the screen.
p.s. this is a public forum so do not include personal information.
I just posted my public comment to the OCC at http://www.regulations.gov. Very easy.
I own a small Residential Appraisal Business in Columbus, OH. Columbus is one of the fastest growing cities in the Midwest with home values fluctuating over the years. Currently the year over year Median & Average Sales prices in the entire Central Ohio MLS are $215,000 and $181,000 respectively. Why do we need to raise the limits when a city like Columbus, OH average prices are not even at the $250,000 level. This increase can only help the banks and large AMC and not the consumer / Tax Payer. Why not use due diligence and not rush everything. All to save $100 when consumers are making the biggest investment in their lives and families lives. Raising the exemption from $250,000 $400,000 is a bad idea. See attached MLS data.
The idea of creating a hybrid appraisal product called an “evaluation” vs. “appraisal” is a bad idea. The proposed hybrid evaluation does not even require a licensed appraiser or certified appraiser. Who is doing the evaluation ? Who will this product benefit ? What is the big rush to increase the appraisal turn time from 5-7 business days to 24-48 hours. At least the real estate purchase contract may give the home buyer an out with the 3 day right if rescission ( Regulation Z ) if they determine the speedy & cheap evaluation is not accurate.