WASHINGTON–The Mortgage Bankers Association has told NCUA it supports its proposed increases for appraisal thresholds for residential and commercial properties.
In a comment letter to the agency on its proposed changes to the appraisal threshold for residential real estate transactions, the MBA said it supports the NCUA’s efforts to raise this threshold and align its standards with those recently promulgated by the FDIC, Federal Reserve, and Office of the Comptroller of the Currency.
“MBA believes the changes proposed by NCUA will offer credit unions an opportunity to better serve their members and expand access to mortgage credit, while also promoting a more competitive market and preserving crucial safety and soundness standards,” the organization said.
As CUToday.info reported, NCUA is proposing raising the appraisal threshold for residential properties to $400,000 and for commercial properties to $1,000,000.
Offsetting Effects
“Raising the threshold for appraisal exemptions for residential real estate properties is appropriate in response to the significant appreciation in national and regional home prices since NCUA last revised its standards nearly two decades ago,” MBA wrote in its letter. “As NCUA notes in its proposal, an increase in the appraisal threshold to $400,000 would exempt approximately the same share of residential real estate transactions as were exempt when NCUA’s prior revisions to the threshold took effect in 2002.
“Moreover, in the current market, the lengthy processing times and high costs often associated with traditional appraisals reduce the efficiency of the loan origination process,” the letter continues. “Rising appraisal costs in recent years have largely been attributed to appraiser shortages in certain areas, and allowing institutions to expand their use of alternative estimates will help offset the effects of these appraiser shortages.”
The MBA also encouraged NCUA to maintain alignment with the federal banking agencies on appraisal threshold standards