Residential Appraisal Threshold Increase Becomes Official

[Mike Kennedy]

Residential Appraisal Threshold Increase Becomes Official
The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency on Sept. 27 announced the official adoption of a final rule that increases the threshold for residential real estate transactions requiring an appraisal from $250,000 to $400,000. Transactions exempt from the appraisal requirement must instead obtain an evaluation.

Federal Banking Agencies Issue Final Rule to Exempt Residential Real Estate Transactions of $400,000 or Less from Appraisal Requirements




> FULL STORY

 

[Meandering]

That's only half the story.

Come January,
all appraisals this is in effect

https://www.govinfo.gov/content/pkg/FR-2019-10-08/pdf/2019-21376.pdf

For residential real estate
transactions exempted from the
appraisal requirement as a result of the
revised threshold, regulated institutions
must obtain an evaluation of the real
property collateral that is consistent
with safe and sound banking practices.
The final rule makes a conforming
change to add to the list of exempt
transactions those 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. The final rule requires
evaluations for these exempt
transactions. The final rule also amends
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.

22 Evaluations are not required to be performed in
accordance with USPAP or by state certified or state
licensed appraisers by federal law. For additional
information on evaluations, see infra notes 23 and
24.

23 The agencies proposed the Guidelines for
public comment in 2008, see 73 FR 69647
(November 19, 2008), and adopted the final
Guidelines in 2010, see 75 FR 77450 (December 10,
2010).

24 Interagency Advisory on the Use of Evaluations
in Real Estate-Related Financial Transactions
(March 4, 2016), OCC Bulletin 2016–8; Board SR
Letter 16–5; FDIC FIL–16–2016.

https://www.occ.gov/news-issuances/bulletins/2016/bulletin-2016-8a.pdf

Contents of an Evaluation Report The Guidelines provide information regarding the minimum content that should be contained in an evaluation. Unlike an appraisal report that must be written in conformity with the requirements of USPAP, there is no standard format for documenting the information and analysis performed to reach a market value conclusion in an evaluation. Regardless of the approach or methodology used to estimate the market value of real property, an evaluation should contain sufficient information to allow a reader to understand the analysis that was performed to support the value conclusion and the institution’s decision to engage in the transaction.

 

[Mike Kennedy]

"DATES: This final rule is effective on October 9, 2019, except for the amendments in instructions 4, 5, 9, 10, 14, and 15, which are effective on January 1, 2020."

 

[Meandering]

Yup, come January non-FRTs are required to have an evaluation.
And appraisals aren't evaluations
And there isn't any pass in the final rule to count an appraisal as the required evaluation.

Don't over spend on Christmas.

.

 

[Dublin ohio]

Don't over spend on Christmas.

I started appraising 1993. The threshold has been 250k since 1994. Have done hundreds of appraisals with omv of less than 250k since then. The sky has yet to fall.

 

[jay trotta]

there is no standard format for documenting the information and analysis performed to reach a market value conclusion in an evaluation. Regardless of the approach or methodology used to estimate the market value of real property, an evaluation should contain sufficient information to allow a reader to understand the analysis that was performed to support the value conclusion and the institution’s decision to engage in the transaction.

Putting the RISK where it belongs;
Who determines the "sufficient information" aspect ??
Who determines whether the "analysis" is appropriate or not ???
How does that analysis support the Value conclusion ??
Who is going to jump off the short Dock for the Institution to engage in the Transaction ????

Form what I've read so far, there is a razor sharp fine Line between the quest for the Evaluation Language and an Appraisal; IMO State Board Members are going to have a real hard time in determining IF; Its an Evaluation OR Appraisal.

"Misdirection" is an all time interesting sport, tune up your Review skills and be prepared, this could get very interesting.

 

[norapp]

22 Evaluations are not required to be performed in
accordance with USPAP or by state certified or state
licensed appraisers by federal law. For additional
information on evaluations, see infra notes 23 and
24.

WE APPRAISERS still need to be USPAP compliant no matter what this says. Unless they change USPAP we must comply.

 

[Meandering]

22 Evaluations are not required to be performed in
accordance with USPAP or by state certified or state
licensed appraisers by federal law. For additional
information on evaluations, see infra notes 23 and
24.

WE APPRAISERS still need to be USPAP compliant no matter what this says. Unless they change USPAP we must comply.

And when you "conform to USPAP" you produce an appraisal, not an evaluation.
yet,
it is evaluations that are "required". Not appraisals.

.

 

[Meandering]

I started appraising 1993. The threshold has been 250k since 1994. Have done hundreds of appraisals with omv of less than 250k since then. The sky has yet to fall.

And the rest of the world still has rolodexs on their desks with corded touch tone phones, calling you asking when your assignment will be done. Oh, and index cards. Remember index cards? probably where they keep all their notes about each of their appraisers.


.

 

[J Grant]

And the rest of the world still has rolodexs on their desks with corded touch tone phones, calling you asking when your assignment will be done. Oh, and index cards. Remember index cards? probably where they keep all their notes about each of their appraisers.

lol computers are nothing more than giant index card machines, repository of data that used to be stored by other methods. And a cell phone is a phone without a land line, big woop. People are so dazzled by "technology" they fail to realize it is just revamped ways of doing what has always been done.