Value shopping

Posted By: It's not easy

Value shopping - 08/19/20 10:03 PM

Do anyone consider the following value shopping? If the business line orders an eval but someone determines that the value came in low (either internally or externally (borrower)), they proceed to order an appraisal but the business line indicates that no matter what the value is, the appraisal will always be considered the most reliable valuation so if the value comes in lower than the eval we have to accept that value. Thanks!

Posted By: It's not easy

Re: Value shopping - 08/19/20 10:10 PM

Sorry for the typo. Meant to say "Does anyone consider". Thanks!
Posted By: rlcarey

Re: Value shopping - 08/20/20 11:18 AM

A licensed or certified appraisal will always trump an evaluation. What concerns me is the (either internally or externally (borrower)) statement. The borrower has no say in you determining the collateral value. That is your concern is that the borrower appears to be influencing your appraisal and evaluation process. So, if your appraisal and evaluation review team does not approve the evaluation, then yes, then it could move to an appraisal. But the borrower gets no say in the matter. If this is happening more than occasionally, and the ultimate appraisal is providing you a value with any sort of significant variance from your evaluation, then your evaluation process is flawed.