Thursday, December 9, 2010

The New Interagency Appraisal & Evaluation Guidelines

On December 2nd, the final Interagency Appraisal & Evaluation Guidelines were published.  These represent the basic appraisal requirements when working for a federally regulated lending institution.  The last set of guidelines were published in 1992 and only a few pages addressed appraisal requirements.  This time around the guidelines are 70 pages and address everything from maintaining appraiser independence, appraiser selection, use of AVMs and BPO as well as requirements for reviewers.

A couple things of interest from the new guidelines:

BPOs can not be used as the primary basis for making a lending decision.
AVMs can not be used as the primary basis for making a lending decision.
Reviewers are expected to have sufficient eduction, experience and knowledge about appraisal methodology.
The appraiser independence requirements found in the HVCC are now part of the new guidelines.
Restricted use reports are generally not sufficient for supporting a lending decision.

The new guidelines can be found on the FDIC website at http://www.fdic.gov/news/news/press/2010/pr10261a.pdf