Changing our evaluation process

Posted By: Cornfed Turtle

Changing our evaluation process - 08/21/19 09:01 PM

On in-house, portfolio residential and commercial loans secured by real estate, we have used internal and external evaluations when appraisal reports are not required. As we have grown in footprint and loan volume, management is considering the use of an AVM for smaller, lower risk loans. (Mgmt is still writing some policy for when this AVM use will be acceptable.) Assuming that we will go through the appropriate procedures of selecting and validating the AVM.... there are still some questions being kicked around. Looking at the level of work that goes into our current evaluations (which meet the requirements of the interagency guidelines), it seems inadequate that our residential folks are going to take a report with a range of values, staple it to a condition report based on an inspection and toss that in the file as "an evaluation." Is this really acceptable? I think our commercial guys are going to get a little excited thinking that they may be able to get by with this quick and easy approach to value on their side as well.

Your experience is appreciated! CT