TraceRiskRisk SubjectsAppraisals & Evaluations

Appraisals & Evaluations

Appraisals & Evaluations

Use Case for Assessing Risk on Appraisals & Evaluations

Why assess the risk? Appraisal regulations substantially set forth in FFIEC Guidance on Appraisals & Evaluations require, at a minimum, that real estate appraisals be performed in accordance with generally accepted uniform appraisal standards promulgated by the Appraisal Standards Board, and that such appraisals be in writing. This guidance pertains to all real estate-related financial transactions originated or purchased by a regulated institution or its operating subsidiary for its own portfolio or as assets held for sale, including activities of commercial and residential real estate mortgage operations, capital markets groups, and asset securitization and sales units.

Who should assess the risks? Credit Administrator, Chief Appraisal Officer, Chief Credit Officer, Loan Servicing Mgr.

How to assess the risk: Rate the KRIs to determine if a threat would successfully exploit a vulnerability and to justify expenditures to implement countermeasures to protect the bank’s assets or reputation. Use the “Focus Risk Assessment” tool for in-depth analysis of risks and mitigation techniques.