18A — April 14 - 27, 2017 — Financial Digest — Appraisal — M id A tlantic

Real Estate Journal


A ppraisal Appraisals serve a vital role in risk mitigation Appraisal Institute urges caution on Appraisal Thresholds


Reserve – are required every 10 years by the federal Eco- nomic Growth and Regulatory Paperwork Reduction Act of 1996 to review federal banking regulations. “The Appraisal Institute urg- es federal regulators to exercise great care with regard to their proposed commercial threshold increase and potential business loan increase, particularly when the Federal Reserve has cited concerns over the com- mercial real estate market, and when concerns recently have been raised about the use of evaluations over appraisals

by regulated institutions,” said Appraisal Institute president Jim Amorin, MAI, SRA, AI- GRS . “We also applaud the agencies’ prudent decision to maintain the current residen- tial threshold.” Amorin noted that, as part of its mission to serve the public interest, the Appraisal Insti- tute believes that appraisals serve a vital role in risk miti- gation, and that lenders and borrowers benefit from the role appraisals play. He also noted that the Ap- praisal Institute has provided its recommendations to the

regulatory agencies, including: · Cautioning against an in- crease of the appraisal thresh- old levels to the federal bank regulatory agencies during the official EGRPRA comment period in 2014. · Educating Congressional oversight committees on the importance of the current ap- praisal threshold levels during regulatory oversight hearings in 2015. · Attending all of the Eco- nomic Growth and Regulatory Paperwork Reduction Act out- reach meetings held in 2015, encouraging bank regulatory agencies to maintain the cur- rent threshold levels and put- ting more resources toward educating examined banks about existing exemptions to appraisal requirements. · Helping coordinate a joint industry letter in 2015 signed by nine real estate organiza- tions in support of maintaining the current appraisal threshold levels. The Appraisal Institute is a global professional association of real estate appraisers, with nearly 19,000 professionals in almost 60 countries through- out the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional devel- opment of property economics worldwide. Organized in 1932, the Ap- praisal Institute advocates equal opportunity and nondis- crimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and lo- cal laws. Individuals of the Ap- praisal Institute benefit from an array of professional educa- tion and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS, and AI-RRS designations. The majority of Appraisal In- stitute professionals are prac- ticing real estate appraisers and property analysts who pro- vide valuation-related services to such clients as mortgage lenders, financial institutions, government agencies, attor- neys and financial planners as well as homeowners and other individual consumers. Appraisal Institute Des- ignated members have met rigorous requirements relating to education, testing, experi- ence and demonstration of knowledge, understanding and ability. n

he nation’s largest pro- fessional association of real estate appraisers

Congress, which said the fed- eral banking agencies are de- veloping a proposal to increase from $250,000 to $400,000 the threshold for commercial real estate transactions. The report did not propose changes to the current residential real estate threshold of $250,000. The agencies continue to review the $1 million business loan threshold for owner-occupied real estate. The nation’s banking regula- tory agencies – the Federal De- posit Insurance Corporation, the Office of the Comptroller of the Currency, and the Federal

t oday c au - tioned feder- al regulators over increas- ing the trans- action values requiring an a p p r a i s a l , also known as the ap- praisal threshold.

Jim Amorin

The Appraisal Institute was responding to the Federal Fi- nancial Institutions Examina- tion Council’s Joint Report to

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