Author: Steve Shepherd, CRCM
On July 18, 2024, the collective joint agencies issued notice of final interagency guidance for ROV (Reconsiderations of Value). This joint agency guidance is designed to help financial institutions develop a process to reconsider third party valuations for some properties. The ROV guidance is effective as of the July 18, 2024, issuance date.
A reconsideration of value request is a request made by the financial institution to the appraiser or other preparer of the valuation report to reassess the report based on deficiencies or information that may affect the value of the conclusion. During the process of reviewing the appraisal by the financial institution, the consumer may inquire or issue a complaint regarding the valuation. The consumer may provide additional information that may not have been available or considered during the initial evaluation process. The complaint can be resolved through the bank’s appraisal review process or through other processes.
The guidance provides methods the financial institution could utilize to help mitigate any valuation disputes. The guidance also encourages the development of policies and procedures to address any complaints and what may constitute a request for ROV from the financial institution.
Some important policy and procedure highlights include:
For more information on the ROV guidance, please visit: https://www.fdic.gov/news/financial-institution-letters/2024/agencies-finalize-interagency-guidance-reconsiderations?source=govdelivery&utm_medium=email&utm_source=govdelivery
On July 18, 2024, the collective joint agencies issued notice of final interagency guidance for ROV (Reconsiderations of Value). This joint agency guidance is designed to help financial institutions develop a process to reconsider third party valuations for some properties. The ROV guidance is effective as of the July 18, 2024, issuance date.
A reconsideration of value request is a request made by the financial institution to the appraiser or other preparer of the valuation report to reassess the report based on deficiencies or information that may affect the value of the conclusion. During the process of reviewing the appraisal by the financial institution, the consumer may inquire or issue a complaint regarding the valuation. The consumer may provide additional information that may not have been available or considered during the initial evaluation process. The complaint can be resolved through the bank’s appraisal review process or through other processes.
The guidance provides methods the financial institution could utilize to help mitigate any valuation disputes. The guidance also encourages the development of policies and procedures to address any complaints and what may constitute a request for ROV from the financial institution.
Some important policy and procedure highlights include:
- Considering ROV as possible resolutions for complaints or inquiries regarding real estate valuations
- Removing barriers that limit the consumers ability to request a ROV.
- Establish a process that helps initiate ROV requests.
- Establish a process to help consumers raise concerns about valuations.
- Identify stakeholders for every business unit.
- Established a standardized process to increase consistency for considerations of ROV.
- Evaluate staff and third parties that are part of the valuation process.
For more information on the ROV guidance, please visit: https://www.fdic.gov/news/financial-institution-letters/2024/agencies-finalize-interagency-guidance-reconsiderations?source=govdelivery&utm_medium=email&utm_source=govdelivery
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