federally related transaction

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federally related transaction (FRT)

FDIC regulations define the term as “any real estate-related financial transaction entered into on or after August 9,1990,that the Board or any regulated institution engages in,contracts for,or regulates.”FDIC regulations require an appraiser for any FRT except those under $250,000 and other narrowly defined exceptions.

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Note that apart from assignments for federally related transactions, there is no USPAP requirement to use any specific definition of market value.
Reporting Requirements for Federally Related Transactions * Obtain written concurrence from client that there is agreement for use of departure.
Also, the agencies reduced the number of supervisory appraisal standards from 14 to 5 and allowed the use of the Departure Provision in USPAP for federally related transactions.
It was established within the Federal Financial Institutions Examination Council (FFIEC) to provide oversight of the real estate appraisal process as it relates to federally related transactions.
Section 1119 refers to the use of licensed or certified appraisers by financial institutions in federally related transactions.
Management shall verify that appraisers providing appraisals in support of federally related transactions are either licensed or certified as required by the appraisal regulations.
The Appraisal Subcommittee is required to maintain a national registry of state certified and licensed appraisers who are eligible to perform appraisals in federally related transactions.
The group's letter maintained that while the intention of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), was to raise the professionalism of appraisers involved in federally related transactions, the associations believe the act has actually hindered the development of the profession, promoting only "minimum" qualifications for appraisers and failing to provide effective federal oversight of the system.
The court held that FIRREA included transactions below the de minimis level in its definition of federally related transactions.
However, the GAO noted that "opportunities exist to enhance the effectiveness of the current regulatory system to help ensure that federally related transactions are based on accurate assessments of the value of properties used as collateral for loans.
After the savings and loan collapse in the 1980s, Congress passed the Financial Institutions Reform, Recovery and Enforcement Act, creating the Resolution Trust Corporation and identifying federally related transactions needing appraisals.

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