Are Regulators Going Easy on CRE Loans?
In this issue:
- CRE Loans: A closer look at distress
- New Offerings: Upzoning, effective communication and AI on AI
- Election Updates: VP candidates and solicitation
Association Updates
Solicitation of Names for 2026 Vice President
The Appraisal Institute is seeking individuals interested in serving as the 2026 Vice President of the Appraisal Institute. The 2026 Vice President will succeed to:
- 2027 President Elect
- 2028 President
- 2029 Immediate Past President
How to Submit a Nomination
If you are interested in serving, or wish to recommend someone for the position, please send a written recommendation to:
Chair, 2025 National Nominating Committee
c/o Joan Barngrover
jbarngrover@appraisalinstitute.org
Deadline: September 12, 2025, at 5:00 p.m. CT
Qualifications
- Qualifications for 2026 Vice President can be found in the Appraisal Institute Bylaws and on the Appraisal Institute’s website.
- Please note: Candidates cannot serve as a member of the National Nominating Committee during the year in which their candidacy is considered.
Seven Candidates Seeking to Become 2025 AI Vice President
The process for nomination and election of the Appraisal Institute’s 2025 vice president has begun. The following individuals (listed alphabetically) have announced their candidacies and will come before the National Nominating Committee at its September 29-30 meeting in Chicago:
- Smedmore Bernard, Jr., MAI
- Joseph Calvanico, MAI, AI-GRS
- Enrique 'Henry' Casado, MAI, SRA, AI-GRS, AI-RRS
- Sharon Harbin, MAI, SRA, AI-GRS
- Ryan Hlubb, MAI, SRA
- Ashley Johnson, MAI, SRA
- Jefferson Sherman, MAI, AI-GRS
AI Members may view the candidate biographies and questionnaires (log-in required) and written input may be provided by 5 p.m. CT, Wednesday, September 24. Correspondence should be addressed to Sandy Adomatis, SRA, chair, 2025 National Nominating Committee, and emailed to Joan Barngrover, board secretary and special assistant to the CEO, at jbarngrover@appraisalinstitute.org.
Insights
Criticized CRE Loans: What Regulators Are (and Aren’t) Flagging
Are regulators going easy on problem commercial real estate (CRE) loans, or are the headlines about rising stress simply not showing up in supervisory tallies yet? The reality is more complicated — and it has important implications for lenders, examiners, and appraisers.
Criticized loans generally fall into two categories: Special Mention, where potential weaknesses exist, and Classified (Substandard, Doubtful, or Loss), where weaknesses clearly threaten repayment. By definition, not every loan under pressure gets flagged — especially when repayment remains likely.
That’s because examiner judgment is shaped by long-standing policy. The 2009 CRE Workout Policy and the 2023 Interagency Update both encourage prudent accommodations. If a loan is performing under modified terms and repayment appears supportable, examiners may decide an adverse classification isn’t warranted — even if collateral values have dropped. In practice, that means criticized totals may not rise as quickly as broader stress indicators suggest.
The data tell a mixed story. FDIC reports show past-due and nonaccrual CRE loans at cycle highs, particularly in multifamily. Office delinquencies are elevated, concentrated at large banks. The 2024 Shared National Credit review noted a modest uptick in non-pass credits, much of it tied to nonbank exposures. Meanwhile, private loan datasets reveal that criticized rates can be high in certain metros and property types, underscoring how uneven stress has become.
For appraisers, the implications are clear: expect more requests for valuation updates as banks pursue extensions, modifications, and structured exits. Examiners will be looking for independent, timely analyses that reflect property fundamentals — market rent durability, rollover assumptions, operating expenses, capital needs, and local trends—that drive stabilized income and credible valuations. These valuations remain a key input for lenders and regulators in assessing credit quality.
The bottom line: Regulators acknowledge mounting stress in CRE portfolios, but they are not automatically classifying every challenged loan. Policy guidance favors accommodations, and in practice this often means banks lean on evaluations rather than new appraisals to refresh collateral values. Yet evaluations frequently lack the depth and independence needed to capture shifting property fundamentals, raising concerns about blind spots in supervisory oversight. As this cycle unfolds, additional services such as appraisal-based validations may offer a stronger balance — providing flexibility for lenders while preserving the credibility that comes from certified appraisers’ independent analyses.
Education and Program Alerts
The Appraisal Institute continues to expand learning opportunities with timely, practical programs designed to help appraisers stay ahead of the curve. Don’t miss these upcoming courses and the innovative AI on AI series.
Essentials of Effective Communication
Premiere Offering: Friday, September 12, 2025 | 10:00 am – 1:00 pm CT
Format: Virtual (National Synchronous)
Instructors: Nicholas “Nick” D. Pilz, MAI, SRA, AI-RRS, and Francois “Frank” K. Gregoire, ASA, IFA, RAA
Every appraisal assignment begins and ends with communication. This interactive course helps appraisers sharpen the skills needed to clearly define appraisal problems, communicate conclusions, and build client trust. By reexamining concepts like scope of work through the lens of communication, you’ll better understand how intended use, intended user, and type of value influence reporting decisions. The result: more effective reports and stronger client relationships.
Residential Upzoning: New Challenges and Opportunities for Residential Appraisers
Premiere Offering: Friday, September 19, 2025 | 12:00 – 4:00 pm CT
Format: Virtual (National Synchronous)
Instructor: Denis DeSaix, MAI, SRA
Affordable housing pressures are reshaping communities across the country, and policymakers are turning to upzoning as a solution. This program explores how increased housing density impacts highest and best use analysis and what residential appraisers need to know when zoning changes shift a property’s potential from single-family to multi-unit development. Learn strategies to refine your market analysis, strengthen site valuation skills, and ensure USPAP compliance—even when assignments test licensing boundaries.
AI on AI Series
Series launches: October 21, 2025
Format: Zoom Events
Facilitators: Mark Linne, MAI, SRA, AI-GRS, and Maureen Mahoney, Director of Education
Artificial Intelligence is rapidly transforming the valuation profession. The Appraisal Institute’s AI on AI series tackles the latest developments in generative AI, workflow efficiency, data analysis, and professional practice. This ongoing series equips appraisers to not only keep pace but also lead in applying AI tools ethically and effectively in their work.
Your Benefits
Discounted Listings in JurisPro Online Expert Witness Directory
JurisPro features your experience through:
- A personalized full page profile on JurisPro, the #1 website for the "Appraisal Expert Witness" search on Google. You will be featured on the site that receives over 1,800,000 hits from legal professionals looking for expert witnesses every month
- Linking and driving traffic to your website
- A full page profile inside LexisNexis, the global leader in online legal research, where 3 million searches are conducted every day
- Promotion of your qualifications as a JurisPro client at over 25 bar association meetings and legal trade shows
- Distribution of CD-ROMS to thousands of litigators across the United States
- Networking with litigators
- Importing your qualifications in-house to some the largest law firms in the United States. For example, as a member of JurisPro, you are directly accessible through the internal network of 12 of the top 20 law firms in the U.S., (and 33 of the top 100) including Skadden Arps, the #1 firm in the country. No other directory makes you accessible from inside these prestigious firms.
The American Bar Association, Legal Technology Resource Center states to its 400,000 attorneys: "JurisPro should be among your first stops in finding expert witnesses."
Valued at $399 per year, as a benefit of the Appraisal Institute, JurisPro will feature your qualifications in all of the areas above for just $349 annually.
To receive your discount, please call (888) 905-4040, and let JurisPro know you are an Appraisal Institute member. To learn more, visit JurisPro/Appraisal Institute $50 Discount.
Be Featured on AI Social
Don’t forget to let the Appraisal Institute know what you and your chapters are up to! Submit your photos from chapter events, interesting appraisals, and more to us and you may be featured on our social media.
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Handling Reconsideration of Value Requests: Best Practices from the Field
September 18, 2025
Reconsideration of Value (ROV) requests are becoming more common as consumers, lenders, and regulators look for greater transparency and accountability in the appraisal process. This Trending Topics Thursday webinar will bring together perspectives from Fannie Mae and practicing appraisers to help clarify how ROVs work in practice, what lenders are asking for, and how appraisers can respond while upholding professional standards.
Rachel Beam of Fannie Mae will provide an overview of the GSE’s approach to ROVs, including recent guidance and expectations for lenders. Megan Judd, SRA, AI-RRS, will share insights from her workshop on consumer appraisal appeals, offering practical guidance for appraisers facing ROV requests in the field.
Join us for this timely discussion to better understand the evolving ROV landscape and what it means for your work.
Learning Objectives
- Understand current Fannie Mae guidance and expectations on Reconsideration of Value.
- Explore practical strategies for appraisers responding to ROV requests.
- Examine consumer and lender perspectives driving the increase in ROV activity.
- Identify best practices that protect both consumers and appraisers while maintaining public trust.
Real Estate Horizons
Stay updated and check out links to the latest major real estate industry stories!
More Opportunities to Learn
Search the latest educational offerings! Find National and Chapter-sponsored classroom, synchronous, and online opportunities.
Your Community
New Certified Residential Scholarship Now Available — Apply by Sept. 12
Applications are now open for two Appraisal Foundation (TAF) PAREA Scholarships, which provide full financial support for individuals pursuing either the Certified Residential or Licensed Residential appraiser classification. With 42 Licensed Residential scholarships already awarded in 2025, this expansion marks a major step forward in helping more candidates enter and advance in the profession.
Funded by TAF, the scholarships cover 100 percent of program costs for AQB-approved Practical Applications of Real Estate Appraisal (PAREA) programs, including the Appraisal Institute’s Licensed Residential and Certified Residential PAREA programs. This initiative ensures that qualified candidates can achieve their appraisal goals without financial barriers.
Applicants must first complete the appropriate Readiness Checklist to confirm eligibility and then submit the official scholarship application. All applications for both the Certified Residential and Licensed Residential scholarships are due September 12, 2025. Scholarship recipients will be announced and funded later in September, with enrollment in PAREA programs expected to begin as soon as October 2025.
Get started today: Complete your Readiness Checklist and apply by Sept. 12.
Only 2 Days Left to Raise Your Hand!
Thinking about volunteering with AI? Don’t wait. The deadline to complete your Leadership Resource Registry (LRR) is August 31.
Need a quick primer on how AI works and where you might fit in? Check out the latest Face Value podcast episode, “How the Appraisal Institute Works,” where hosts Tonia Vailas and Warren Boizot chat with President-Elect Mike Mignogna about:
- How AI is structured from chapter to national
- The real impact members have
- Simple ways to get involved
- The perks of volunteering (hint: networking and leadership growth)
Mike offers great insight and reminds us that AI is member-driven, and that getting involved is easier than you might think.
Listen to the podcast here.
Submit your LRR request here.
Tune in. Get inspired. Take the leap.
Until Next week
Team Appraisal Institute
