The federal banking agencies jointly issued for comment proposed Interagency Appraisal and Evaluation Guidelines. The proposal would replace the 1994 Interagency Appraisal and Evaluation Guidelines.
The proposal provides:
- Additional detail on the agencies’ expectations for an independent appraisal and evaluation function.
- Greater explanation of the agencies minimum appraisal standards, including clarification of requirements for appraisals of residential tract developments.
- Revisions to the Uniform Standards of Professional Appraisal Practice, which are incorporated by reference in the agencies' appraisal regulations.
- Risk-focused appraisal and evaluation reviews separate and apart from an institution's compliance function.
- New appendices -- Appendix A provides further clarification on real estate transactions that are exempt from the agencies' appraisal regulations; Appendix B addresses acceptable evaluation alternatives and use of automated valuation models; and Appendix C contains a new glossary of terms.
The proposal would apply to all real estate lending functions, including commercial and residential lending departments, capital market groups, and asset securitization and sales units.
Comments are due 60 days after publication in the Federal Register, which is expected shortly. Click here for the proposal.