Federal Banking Agencies Release Proposed Guidance on Reconsideration of Value
The federal banking agencies on June 8 released proposed guidance to address reconsiderations of value for residential real estate transactions. The guidance addresses policies that financial institutions may implement that allow consumers to provide them with information that may not have been considered during an appraisal or when deficiencies are found in an original appraisal.
The issuance of guidance on RoV was a significant part of the PAVE Action Plan released last year, and the Appraisal Institute believes an RoV process can be beneficial to borrowers, underwriters and appraisers to ensure fair and accurate appraisals.
The proposed guidance explains how financial institutions may create or enhance their existing RoV processes while maintaining consistent safety and soundness standards, complying with applicable laws and regulations, preserving appraiser independence and remaining responsive to consumers.
The Appraisal Institute currently is reviewing the proposed guidance but sees some similarities to the recent proposed Mortgagee Letter from the Federal Housing Administration, for which AI co-signed a comment letter in February. As the federal banking agencies and other government agencies finalize their RoV policies, AI believes it is imperative to align the agencies as closely as possible to ensure consistent protocols and procedures are used by participating mortgage lenders.