Agencies Seek Comment on Guidance on ROVs in Residential Transactions

The Federal Reserve Board, FDIC, NCUA, OCC, and CFPB (collectively, the Agencies) recently announced that they are seeking public comment on their proposed interagency guidance on reconsiderations of value (ROV) in residential real estate transactions.  The proposed guidance would describe how financial institutions could create or improve ROV processes that comply with applicable laws and regulations and preserve appraiser independence.  Collectively, the Agencies do not have existing guidance specific to ROV processes. 

For purposes of the proposed interagency guidance, the Agencies define an ROV as a request from a financial institution to an appraiser or other preparer of a valuation report to reassess that report based on potential deficiencies or other information that may affect the report’s value conclusion.  Some of the specific issues the Agencies have asked the public to address include, among others:

• to what extent does the proposed guidance describe suitable considerations for a financial institution to take into account in assessing and potentially modifying its current policies and procedures for addressing ROVs;
• what model forms, or model policies and procedures, if any, related to ROVs would be helpful for the agencies to recommend;
• what other guidance may be helpful to financial institutions regarding the development of ROV processes; and
• to what extent, if any, does the proposed ROV guidance conflict, duplicate, or complement the existing Interagency Appraisal and Evaluation Guidelines or a financial institution’s policies and procedures to implement those Guidelines?

Comments can be submitted to any and all of the Agencies and are due on or before 60 days after the date of publication in the Federal Register.