WASHINGTON, D.C. — Five federal regulatory agencies have issued new guidance to help financial institutions reassess the value of residential real estate. This guidance focuses on reconsiderations of value (ROVs), which allow consumers and institutions to address potential errors or overlooked information in home appraisals.
ROVs are requests made by financial institutions to appraisers to reassess the value of a home. This can happen if there are deficiencies identified in the initial appraisal or if new information from consumers suggests the original valuation was flawed.
The guidance outlines policies and procedures that financial institutions can adopt. These procedures enable consumers to provide additional information that may not have been considered during the first appraisal. It also helps institutions identify and mitigate risks related to potentially discriminatory practices in home valuations.
By addressing deficiencies in appraisals, financial institutions can ensure more accurate and fair valuations. The guidance explains how to incorporate ROV processes into risk management functions, helping to safeguard against discrimination and ensure credibility in the valuation reports.
The agencies finalized this guidance after considering public comments on a proposed version released in July 2023. The final version includes clarifications based on the feedback received.
This new initiative aims to enhance transparency and fairness in the residential real estate market, ultimately protecting consumers and maintaining trust in the valuation process.
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