When you stop to think about the benefits, an appraisal review is truly worth its weight in gold. The main objective of ensuring accuracy in the estimation of a property's value is a no-brainer for community banks and credit unions alike. A comprehensive appraisal review locks down a clear assessment of the property, going over every detail to protect the financial institution's investment. A real estate appraisal report's accuracy is just one key benefit, though, and appraisal reviews offer numerous advantages to support their required usage.
Compliance with the Mandated Appraisal Guidelines and Standards
Following the introduction of the 2010 Interagency Appraisal and Evaluation Guidelines, appraisal reviews have become even more valuable. The Interagency Appraisal and Evaluation Guidelines focus on supervisory issues as they relate to real estate appraisals and evaluations intended to support financial transactions involving real estate. The guidelines also clarify different agency expectations to ensure sensible practices, policies, and procedures for appraisals and evaluations.
Credit unions and community banks must remain compliant with these guidelines, as well as Uniform Standards of Professional Appraisal Practice (USPAP) and general appraisal guidelines. The policies and procedures held by financial institutions, if not compliant, may give way to penalties, including but not limited to criticism for unsafe and unsound practices.
Exceptional Improvements in Quality Control
Another set of eyes brings in a different perspective, looking at each piece of the puzzle from unique angles. Your financial institution can rest assured that this added layer of quality control will ensure that your appraisal is accurate and thorough from top to bottom. If something's missing or is not USPAP compliant the reviewer will share his or her assessment so you can make an educated decision. Manual appraisal reviews return far fewer underwriting requests and corrections, saving time as well as money.
Complex Audits Leave No Rock Unturned (Desk Reviews)
For the SAMCO Desk review, an appraisal review gains insight into both the pluses and the minuses of a particular real estate opportunity. Operating as a second opinion, the review may turn up poor or missing comparisons or stronger, more valuable ones that position the appraised property as either below or above other similar properties in the neighborhood. An appraisal review helps to ensure the initial report was technically sound. It also provides another assessment of value, either in agreement with the original assessment or as a new opinion backed by supporting details.
Greater Protection Against Bad Deals
With more than one appraiser looking at prospective properties, banks and credit unions gain greater insight and protection in avoiding bad deals. Both residential and commercial transactions run the risk of going to foreclosure, depending on the financial integrity and other obligations of the borrowers. A thorough and meticulous appraisal review gives the full picture of what banks and credit unions may consider red flags as well as criteria for a successful investment.
Confidence in the Decision Process
Relying on SAMCO's talented professionals for your appraisal audit and reviews gives you the confidence that you've done all the research possible to determine whether a property is a worthwhile and safe investment. We offer USPAP-compliant audits and full desk reviews. The USPAP-trained reviewers have ensured compliance with the Interagency Appraisal and Evaluation Guidelines, assessed the overall condition of the property and the surrounding neighborhood, held it up against our compliance checklist, and of course, noted any potential problems with the transaction. Financial institutions gain added confidence in their lending decisions when they can see the complete picture of a possible deal, allowing them to make an informed decision.