Solutions

Common Compliance Questions

Challenge:

Do you use the same engagement letter form for every appraisal engagement?

Solution:

FICRAS enables the institution to formulate a unique engagement letter for each request based upon risk. This is accomplished by choosing a qualified appraiser, indicating the degree of inspection required for that specific job, identifying who can perform the inspection, identifying who must perform the analysis, identifying the minimum requested approaches to value, etc. Again, the engagement letter is the bank's contract with the appraiser, thus should be job specific based upon risk.

Challenge:

Is the appraiser, evaluator or reviewer you selected independent of the loan production and collection processes; do you verify that they have no direct, indirect or prospective interest, financial or otherwise, in the property or transaction?

Solution:

The law requires independence. The FICRAS system produces a means of complying with independence requirements, while also allowing information necessary to each function to flow between the parties.

Challenge:

Do you believe the law demands rotation of appraisers as a means of compliance?

Solution:

FICRAS offers a means of gathering necessary information to qualify appraisers and offers the ability to form panels based upon that appraisers' education, training, experience, service history and other criteria.

Challenge:

Do you have different appraisal review products commensurate with the risk of the loan?

Solution:

FICRAS offers review forms as part of the system that address the required items noted in the regulations. It offers a checklist for lower-risk review and more detailed reviews for higher risk loans. Further, it allows for reviews to be performed internally, or outsourced by qualified external reviewers.

Challenge:

Do you obtain an evaluation, at a minimum, upon every real estate loan renewal or restructure?

Solution:

The FICRAS system includes a validity check procedure, forms and processing functions that meet the Agencies regulatory guidelines for existing extensions of credit.

Challenge:

Are your appraisal forms updated as USPAP and other regulatory requirements change?

Solution:

FICRAS allows for monitoring and enables a continual, immediate update of verbiage and other system information to maintain compliance with USPAP and Agency requirements.