Integrity Loan Review

Commercial Real Estate Evaluations and Validations

Gordy Welch from Lighthouse Real Estate Services shares his perspective on real estate evaluations.

In their April 2018 updated guidance the (The agencies)  “encourage financial institutions to make use of the following exceptions” related to (the use of) Evaluations and Validations. **

Transactions That Require Evaluations:  December 2010 and April 2018 Interagency FDIC appraisal guidelines permit an institution to obtain an appropriate evaluation of real property collateral in lieu of an appraisal for transactions that qualify for certain exemptions.

  • Has a transaction value equal to or less than the appraisal threshold of $500,000.**
  • Is a business loan with a transaction value equal to or less than the business loan threshold of $1 million, and is not dependent on the sale of, or rental income derived from, real estate as the primary source of repayment.*

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Risk Ratings and Restructuring

COVID-19 continues to evolve with unimaginable ramifications to individuals and businesses around the world.  The outbreak has caused increasing global business and economic disruptions.  The spread of this disease and its resulting economic impact is unprecedented.

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Time to incorporate a remote loan file review?

This blog was initially posted in January 2019. Presently the corona virus is creating the need to minimize unnecessary contact and create appropriate social distance. Financial institutions have begun to implement reduced branch access and other measures to limit personal physical contact. Unfortunately, we are also beginning to experience the economic impact of the virus as many businesses are no longer able to provide the product or service in their traditional way. Financial institutions will need to continue third-party provided audit services. We believe loan review is a service that can be remotely delivered and provided for continued portfolio risk management. Integrity Loan Review is ready to assist you with a remote loan review for your organization.

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HVCRE Update – December 2019

On December 13, 2019, the Agencies published the final rule regarding HVCRE (High Volatility Commercial Real Estate) which becomes effective on April 1, 2020. The primary intent of the revision was to create consistency with the statutory definition of HVCRE exposure. The revision will also provide for consistency in the reporting requirements for the Call Report and FR Y-9C.

To read this full blog, please click here.

Happy Thanksgiving from your friends at Integrity Loan Review!

We Thank Thee

For flowers that bloom about our feet;
For tender grass, so fresh, so sweet;
For song of bird, and hum of bee;
For all things fair we hear or see,
Father in heaven, we thank Thee.
For blue of stream and blue of sky;
For pleasant shade of branches high;
For fragrant air and cooling breeze;
For beauty of the blooming trees,
Father in heaven, we thank Thee.

– Ralph Waldo Emerson