Reporting Requirements for Federally Related Transactions
* Obtain written concurrence from client that there is agreement for use of departure.
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
.(69) Each of these agencies appoints one member to the ASC.
As previously noted, regulatory agencies and the RTC must differentiate between the types of federally related transactions
that require the services of state certified appraisers and those that require state licensed appraisers.
* Certified general real estate appraiser: May provide appraisal services in federally related transactions
with all types of residential or commercial real property without regard to value or complexity.
Title XI contemplates that the states will establish appraiser certification and licensing agencies, as well as set minimum requirements for individuals who are qualified to perform appraisals in connection with federally related transactions
. After December 31, 1992, state-certified or licensed appraisers must be used for all federally related transactions
, unless a temporary waiver is granted in accordance with the provisions contained in Title XI.
* Certain states are considering legislation to apply to all real estate appraisals, not just federally related transactions
Under the proposed rule, states that participate in supervising and registering AMCs would have to require that their AMCs: 1) register in the state and be subject to its supervision; 2) use only state-certified or licensed appraisers for federally related transactions
; 3) require that appraisals comply with the Uniform Standards of Professional Appraisal Practice (USPAP); 4) ensure the selection of competent and independent appraisers; and 5) establish and comply with processes and controls designed to ensure appraisals comply with appraiser independence standards under the Truth in Lending Act (TILA).
If it is determined that a state does not have a compliant reciprocity policy in place, it is possible that appraisers in that state could be removed from the National Registry and no longer be eligible to provide appraisals in conjunction with federally related transactions
One of Title XI's key objectives is to ensure that appraisals conducted for federally related transactions
are done in accordance with uniform standards by individuals whose competence has been demonstrated.
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.
An appraiser who is not licensed or doesn't do work that involves federally related transactions
generally does not follow USPAP.
"Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) provides protection for federal financial and public policy interests in real estate-related transactions by requiring real estate appraisals used in connection with federally related transactions
to be performed in writing, in accordance with uniform standards, by appraisers whose competency has been demonstrated and whose professional conduct will be subject to effective supervision."(1) FIRREA directed each federal banking agency to publish appraisal regulations.