The federal financial regulatory agencies Thursday issued guidelines on sound practices by financial institutions for real estate appraisals and evaluations.[IMAGE]
The Board of Governors of the ""Federal Reserve System"":http://www.federalreserve.gov/default.htm, the ""Office of the Comptroller of the Currency"":http://www.occ.treas.gov/ (OCC), ""FDIC"":http://www.fdic.gov/, ""Office of Thrift Supervision"":http://www.ots.treas.gov/, and the ""National Credit Union Administration"":http://www.ncua.gov/ released the guidelines and an accompanying joint press release regarding the guidelines.
These guidelines, titled Interagency Appraisal and Evaluation Guidelines, will replace advices written in 1994.[COLUMN_BREAK]
They explain the agencies' minimum standards for appraisals and incorporate the agencies' recent supervisory issuances on appraisal practices.
Financial institutions use appraisals and evaluations to determine the value of collateral for loans, including mortgages.
According the press release, financial institutions should review their appraisal and evaluation programs to make sure they are consistent with the new guidelines.
The guidelines stress that it is the responsibility of the boards of directors of financial institutions to select appraisers and evaluators who are competent, experienced and knowledgeable of the market and type of property being evaluated.
""The Guidelines clarify the Agencies' longstanding expectations for an institution's appraisal and evaluation program to conduct real estate lending in a safe and sound manner,"" reads the beginning of the 70-page document.
""Further,"" it continues, ""the Guidelines promote consistency in the application and enforcement of the Agencies' appraisal regulations and safe and sound banking practices.""
View the new guidelines ""here"":http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20101202a1.pdf .