Appraisal Requirements: Let’s Go Back to the Basics

Written by Alma Calcano, Regulatory Compliance Specialist

Generally speaking, an appraisal is an assessment of property, such as real estate, by an authorized person with the purpose of determining the value or possible selling price of the appraised property. When it comes to real estate secured loans, an appraisal can give a credit union vital information about a property’s value that may inform the loan amount provided. A proper appraised value may also help a credit union ensure it has sufficient recourse should the member default on the loan as the value of the property may be used to satisfy the obligation. For that reason, regulators have issued regulations and guidance to ensure that appraisals are accurate and independent from the influence of borrowers and lenders.