Federal Banking Regulators Unveil New Rule for Delaying Appraisals During Pandemic
Banks will now be able to postpone getting an appraisal on a residential or commercial property for up to 120 days after the mortgage closes under a new federal rule designed to help extend and streamline financing during the COVID-19 pandemic.
The change was approved on April 12, 2020 by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency. The new rule will go into effect once it’s entered into the Federal Register, bypassing the normal comment period and 30-day implementation delay, and will remain in effect through the end of 2020.
The rule only applies to banks under the oversight of the Fed, FDIC and OCC., and it only applies to loans kept in banks’ portfolios.
“In addition, the spread of COVID-19 has greatly increased the difficulty of performing real estate appraisals and evaluations in a timely manner,” the agencies continue. “This relief will allow regulated institutions to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of COVID19, while reaffirming the safety and soundness principle that valuation of collateral is an essential part of the lending decision. For these reasons, the agencies find that there is good cause consistent with the public interest to issue the rule without advance notice and comment.”