Agencies ‘highlight’ techniques to deal with appraiser shortage

May 31, 2017 -- Two options to assist in timely consideration of loan applications by lenders in the face of limited availability of state-certified and licensed appraisers were highlighted today in a joint advisory issued by federal financial regulatory agencies, largely in response to comments made to them by insured financial institutions.

The agencies (NCUA, the Federal Reserve, the FDIC and the OCC) stated in a press release that they are highlighting two areas in which appraiser availability may be addressed:

  • Temporary practice permits: allows appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law. The advisory also discusses reciprocity, in which one state allows appraisers that are certified or licensed in another state to obtain certification or licensing without having to meet all of the state's certification or licensing standards.
  • Temporary waivers: sets aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state-certified or -licensed appraisers leading to significant delays in obtaining an appraisal.

The release stated that the advisory is in response to comments received through the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review process. Financial industry representatives, in their EGRPRA comments, raised concerns regarding the timeliness of appraisals, which they attributed to shortfalls in the availability of state-certified and -licensed appraisers, especially in rural areas.

Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) requires appraisals for federally related transactions to be performed by individuals who meet certain state-certification or -licensing requirements.

Financial Institution Regulatory Agencies Issue Advisory on Appraiser Availability