WBA recently submitted a comment letter to OCC, FRB, and FDIC regarding a proposed rulemaking that would increase the threshold at or below which appraisals would not be required for residential real estate transactions. The proposal would move the maximum transaction amount from $250,000 to $400,000.
WBA wrote to the agencies to voice support for this proposal, as this proposal will positively impact community banks, particularly those that engage in portfolio lending, and those in rural areas where a shortage of appraisers has caused challenges. WBA also argued that the proposal would help community banks stay competitive in the current lending environment with a rising number of secondary market appraisal waivers.
Additionally, WBA made a point to mention that NCUA, although not party to the proposal, should adopt a similar threshold and standards if it intends to increase its own appraisal threshold for residential real estate-secured transactions. WBA raised this issue due to NCUA’s recent proposal to increase its appraisal threshold level for commercial real estate transactions to $1,000,000, even though in April of 2018 banking regulators adopted an increased threshold of $500,000 for such commercial transactions.