Appraisal List and the Engagement Process
Duration: 60 Minutes
This webinar focuses on the importance of approved appraiser list stratification to enhance appraisal quality and regulatory compliance within the engagement process. One of the primary ways to speed up the review process is to improve appraisal quality. Cost and risk to the institution can also be impacted by the scope of appraisal assignments: matching quality level to transaction risk.
Objectives of the Presentation
Why Should you Attend
- Understand federal law and bank regulatory requirements for appraisal interaction and engagement
- Learn the importance of vetting appraisers for general qualifications and specific competency
- Learn alternatives options for vetting appraisers
- Learn the importance of appraisal procedures for standardizing the bidding and engaging process
- Learn the importance of approved list stratification
- The Interagency Appraisal and Evaluation Guidelines require banks to ensure appraisal quality
- How does that regulatory mandate translate into practice?
- How can appraisal quality vary with risk?
- How do the approved appraiser list and the engagement process impact appraisal quality?
- The webinar will answer these and other engagement process questions
Who will Benefit
- Pertinent financial institution regulations and federal banking law that apply
- Best practices for approved appraiser list monitoring
- Importance of establishing a process to critique and improve approved list appraiser quality
- Identify legitimate and illegitimate reasons to engage an appraiser who is not on the bank's approved list
- Examine how high risk transactions and construction loans should be differently handled in the engagement process
- Comparison of how residential and commercial engagement practices may differ and problem areas for banks
- CEOs and presidents of community banks
- Credit administration officers
- Chief appraisers/appraisal function managers
- Credit officers involved in the appraisal function
- Credit reviewers and other credit side personnel
- Lending group managers
- Employees tasked with elements of the appraisal function
Financial institutions (banks and credit unions) make loans of all sizes. Collateral is obtained to provide the institution with some form of repayment in the event of borrower default. As such, collateralized loans are considered to have lower risk than unsecured loans and longer amortization periods are made available when long-lasting real estate collateral is provided. But just having collateral does not necessarily ensure lower risk for the institution. Real estate values shift, due to market forces and specific property issues. Thus, bank regulators have embedded the valuation process within all real estate loan production. Further, institutions are mandated to install processes and personnel that can identify risk levels and effectively manage the appraisal program with greater due diligence when risk is higher. But real estate appraising is a different industry than banking, so institutions often face a steep learning curve in efforts to comply with appraisal regulations. This webinar provides introductory information for banks and credit unions to work toward meeting the regulator's appraisal program requirements.