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#1217741 - 07/15/09 08:10 PM Appraisals for classified assets.
Comply Offline
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Joined: Oct 2003
Posts: 291
Is there a guideline that is specific to when an appraisal is needed on a portfolio loan. ie, once every 12 months on a substandard, doubtful or loss, or is it once every 12 months on a special mention or worse? Or is the standard set by the bank itself. REO's we get every 12 months.

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#1220642 - 07/22/09 06:01 PM Re: Appraisals for classified assets. Comply
HRH Okie Banker Offline
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Joined: Jan 2003
Posts: 3,070
Oklahoma
There is no guideline on this. That is up to the bank and is usually based on risk associated with the borrower, guarantors and/or the real estate (net worth, repayment capacity, value of other collateral, status of income producing property, status of real estate in that area).

If the real estate is not in an area known to you - it would be wise to obtain a new appraisal on a non-performing loan to determine the possibility of a charge-down. Big difference in a loan that started at a 40% loan to value loan with real estate very well known to you with supporting documentation as to recent real estate sales/auction prices versus a loan at 85% loan to value in an area outside of the bank's normally lending area.
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