Q: The work-out plan on a problem loan calls for a financial institution to receive an assignment of a note secured by a deed of trust on a different property. Is this transaction considered a real-estate-related financial transaction and is an appraisal required on the collateral property?
A: Yes, this transaction is considered a real-estate-related financial transaction. The agencies’ appraisal regulations require an evaluation in certain loan workout situations.44 In such situations, although only an evaluation would be required, the financial institution could choose to obtain a new appraisal.
44 See Valuation Guidelines, Appendix A, exemptions 7 and 8.