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Final Interagency Appraisal and Evaluation Guidelines
ValueNet has several product offerings to assist lenders in being compliant with new guidelines.
Northbrook, IL – Jan 15, 2011
On December 2nd, 2010 five regulatory agencies related to financial institutions issued their final Interagency Appraisal and Evaluation Guidelines. They provide further clarification to the Agencies’ appraisal regulations and supervisory guidance to institutions and examiners about prudent appraisal and evaluation programs. Those 5 Agencies are OCC, FRB, FDIC, OTS and NCUA.
The guidelines are applicable to financial institutions regulated by these agencies. The intention of the guidelines is to identify the methods leading to a sound program for performing collateral valuations for real estate related lending transactions.
"The regulations leave a lot of leeway on behalf of the lending institution in it’s interpretation of how to approach the issue." says ValueNet President / CEO Scott Waxman. " However, a couple things come through very clear in my opinion. First, is that Realtor valuation products like a Broker Price Opinion (BPO) will no longer be allowed for valuing real estate in lending transactions." Waxman also adds "it also seems pretty clear that lenders utilizing Automated Valuation Models (AVM) as a method to value their collateral will need some type of exterior inspection to go along with it."
The underlying issue in all valuation methods is that there needs to be some type of current data to support a determination of the actual physical condition of the property being valued. It is no longer acceptable for a lender to use unsupported assumptions that the property being valued is in "average" condition.
This would suggest that an institution should consider performing an inspection to determine the actual physical condition of the property regardless of the method or product they use for valuation. Further suggesting that an AVM or other types of evaluations may need to be combined with an inspection to be an acceptable valuation method under the guidelines.
The ValueNet product array allows lenders to be in compliance with the new guidelines regardless of that lender’s interpretation of the guidelines. The ValueNet Plus and ValueNet EX products both have an exterior inspection and determination of condition as part of its valuation process. "We feel very good about our positioning under these new regulations." notes Mr. Waxman. "Regardless of how a lender’s risk executives interpret the rules, one of our ValueNet products will allow them to be in compliance at a fraction of the cost of traditional appraisal products."
About ValueNet, Inc.
ValueNet is a product offering of Preferred Appraisal, Inc.. ValueNet provides the highest-level in service standards to deliver accurate, cost effective appraisals to customers across the U.S. Working in urban, suburban and rural markets, ValueNet provides an array of alternative appraisal products to estimate the value of nearly every type of residential real estate. From lending institutions to wholesalers to Loss Mitigation departments, ValueNet serves the needs of nearly every aspect of the residential lending business.
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