For the past 5 months, the valuation industry has been actively following the TriStar Bank Appraiser Waiver submitted to the Appraisal Subcommittee. The official request asked to receive a one-year waiver of the appraisal regulation’s requirements to utilize a certified appraiser. According to TriStar Bank, the waiver stated there was an absence of certified general real estate appraisers in their market area. The shortage of appraisers was leading to a delay in the loan processing and added costs which negatively affected clients.
According to Section 1199(b) of Title XI grants permission to the ASC to waive, on a temporary basis and with approval from the FFIEC …
“Any requirements relating to certification or licensing of a person to perform appraisals under (title XI) upon a written determination that there is a scarcity of certified or licensed appraisers to or in any geographical political subdivision of a State, leading to significant delays in the performance of such appraisals.”
On November 20, 2017, the ASC received the letter requesting a temporary waiver for Appraisers from TriStar Bank located in Dickson, Tennessee. Soon after, the ASC replied to the letter. They communicated to TriStar Bank that they must submit a formal waiver request in accordance with 12 CFR, 1102.22 and 1102.3. Fast forward four months later, the ASC opened a 30-day comment period allowing interested parties to react to the waiver request. After receiving 166 letters in response to the published notice of the request, the period closed on April 9th, 2018.
Once the comment period had closed, the ASC had 15 days to deny or grant the waiver. The ASC must respond to the comments received, provide reasons for its decision and be published in the Federal Register.
Within 14 days on April 23rd, 2018, the ASC along with members from the ASA-NAIFA, AGA, and AI were present as well as board members from FHFA, CFPB and OCC to make the final ruling.
After a thorough review, the ASC denied the waiver request.
1) The waiver submitted by TriStar bank initially claimed there was only one certified General Appraiser within Dickson County. However, according to the ASC website, they are currently 5 plus an additional 64 Tennessee Certified General Appraisers in the Nashville market.
2) Several comments received were from appraisers located in TN who said they have contacted TriStar offering to perform appraisals for the bank but had not contracted.
3) One appraiser who provided TriStar bank with their services provided data that in some cases, contradicted the data provided by TriStar.
4) The Tennessee Real Estate Appraiser Commission stated it “disagrees that there is a shortage of appraiser in those cited counties.” The TN REAC also provided data showing that there were 174 Certified General appraisers and 491 total credentialed appraisers available in the four counties directly surrounding Dickson County.
The ASC examined the evidence of scarcity in the area, the evidence of delay as well as the comments received. The ASC determined the following;
1) Despite the comments received, TriStar bank focused on Dickson County. There was little discussion regarding appraisers in Maury, Davidson and Williamson counties and no discussion of other counties in the area.
2) The request submitted not only focused on the shortage of appraisers in Dickson County but the delay in delivery time for appraisers. In 2013, the turnaround time was 21 days. In 2017, 27 days. But, the data received by TriStar bank was ruled incomplete based on the fact that one commenter explained he completed several commercial appraisals for the bank in 2017 that were not reported. If these completed appraisals are put into consideration, the median delivery time for 2017 was 24 days. That is only a 3-day increase.
In order to approve the waiver request, the ASC must find that both the shortage of appraisers and the significant delay in appraisal services are accurate. The Chairman of the Board, Arthur Lindo stated waiving appraisal would be a “nuclear option”.
Kudos to the appraisers who stepped up and wrote comment letters to provide the ASC with a well-rounded view of the local Tennessee market.
To read the Final Order, click here.
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