2018 Appraisal FAQ 22 – May a financial institution accept a transferred appraisal prepared by an appraiser who had an affiliated business relationship with the financial services institution that originally ordered the appraisal?

Compliance > Lending > Appraisal Regulations & Interagency Stmt.
Q:  May a financial institution accept a transferred appraisal prepared by an appraiser who had an affiliated business relationship with the financial services institution that originally ordered the appraisal?
 
A:   The affiliated business relationship between the financial services institution and the fee appraiser does not violate the independence requirement of the agencies’ appraisal regulations, provided the fee appraiser has no direct or indirect interest, financial or otherwise, in the property or the transaction.  The financial institution receiving the appraisal should confirm that the appraiser is independent of the transaction and that the appraisal conforms to the agencies’ appraisal regulations and is otherwise acceptable.57 For transactions subject to the IFR on Valuation Independence or the HPML Appraisal Rule, institutions should confirm that the appraisal complies with those rules.  
 
57 OCC: 12 CFR 34.45(b)(2); Board: 12 CFR 225.65(b)(2); and FDIC: 12 CFR 323.5(b)(2).
 
ADDITIONAL INFORMATION:
This can be found in the 2018 “Frequently Asked Questions on Appraisal Regulations and the Interagency Appraisal and Evaluation Guidelines,” which may be found here:
https://www2.occ.gov/news-issuances/bulletins/2018/bulletin-2018-39a.pdf
 

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