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Regulators issue advisory for timely loan application appraisals

Financial regulators issued an advisory highlighting two options to help financial institutions facilitate the timely appraisal of loan applications.

The regulators, comprised of the Federal Reserve Board, Federal Deposit Insurance Corp., the National Credit Union Administration, and the Office of the Comptroller of the Currency, released the advisory amid concerns over the availability of state-certified and -licensed appraisers, which are particularly limited in rural areas.

The regulators highlighted that state-credentialed appraisers are temporarily allowed to render services in another state, subject to state law. It may also be possible for an already credentialed appraiser to obtain the same status in another state — which is called reciprocity — without having to submit to all the other state's requirements for certification.

Another option to address the issue of appraiser availability is through temporary waivers, which set aside requirements relating to the certification or licensing of individuals to perform appraisals in states or geographic political subdivisions where certain conditions are met. The waivers are issued when there is a shortage of state-certified or -licensed appraisers that lead to significant delays in obtaining a loan appraisal.