Federal regulators issued final guidance addressing reconsiderations of value for residential real estate transactions.
Background: ROVs are requests from financial institutions to appraisers or other preparers of valuation reports to reassess the value of residential real estate.
Guidance Details: The guidance provides policies and procedures that financial institutions may implement to allow consumers to provide financial institutions with information that may not have been considered during an appraisal or if deficiencies are identified in the original appraisal.
Example Policies: The guidance offers examples of ROV policies and procedures that a financial institution may implement to help institutions identify, address, and mitigate discrimination risk; describes the risks of deficient residential real estate valuations; and explains how financial institutions may incorporate ROV processes into risk management functions.
ICBA View: In a comment letter last fall, ICBA said it welcomes guidance that clarifies and defines existing safety and soundness standards regarding the ROV process but has concerns that the current discourse and guidance will result in excessive or unwarranted use of ROVs.
