In October, NCUA, along with three other federal financial services regulators, approved an exception from the appraisal requirements for real estate-related financial transactions in the parishes declared to be in a major disaster area (opens new window) due to the severe storms and flooding in Louisiana.
This exception was made under the Financial Institutions Reform, Recovery and Enforcement Act and its implementing regulations. The exception expires on Dec. 31, 2017.
To qualify for the waiver, a credit union needs to document that:
- The transaction involves real property located in one of the parishes declared in the major disaster area by the president on Aug. 14, 2016;
- There is a binding commitment to fund a transaction that was entered into on or after Aug. 14, 2016, but no later than Dec. 31, 2017; and
- The value of the real property supports the institution’s decision to enter into the transaction.
Credit unions in the affected area that rely on the appraisal exception should maintain sufficient information in the loan file estimating the collateral’s value that supports their credit decision.
NCUA will monitor institutions’ use of the appraisal exception to ensure these real estate-related transactions are being originated in a manner consistent with safe and sound lending practices.
For more information, visit http://go.usa.gov/xkFPG (opens new window).