How should lenders handle appraisal complaints? Five federal agencies issued a request for comments about a residential real estate reconsideration of value (ROV).

WASHINGTON – Five federal regulatory agencies requested public comment on proposed guidance addressing reconsiderations of value (ROV) for residential real estate transactions, including:

  • Consumer Financial Protection Bureau (CFPB)
  • Federal Deposit Insurance Corporation (FDIC)
  • Federal Reserve
  • National Credit Union Administration (NCUA)
  • Office of the Comptroller of the Currency (OCC)

The group generally plans to answer to this question: If information wasn’t considered during an original appraisal or if deficiencies are later identified, what should financial institutions do?

An ROV is a request from a financial institution to an appraiser or other valuation-report preparer asking them to reassess the real estate’s value. The federal agencies say an ROV may be warranted if a consumer provides information about potential deficiencies or other items that may affect a property’s estimated value.

The proposed guidance should:

  • Show how ROVs intersect with appraisal independence and comply with laws and regulations.
  • Explain how financial institutions can create or enhance existing ROV processes while A) remaining consistent with safety and soundness standards, B) complying with laws and regulations, C) preserving appraiser independence, and D) remaining responsive to consumers.

The agencies says “deficient collateral valuations” can contain inaccuracies due to errors, omissions or discrimination.

Comments must be received within 60 days of the proposed guidance’s publication in the Federal Register.

Also see: “Feds Want Appraisal Reconsideration Guidance.”

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Author: kerrys