Certain appraisal requirements for real estate-related transactions are temporarily paused to help facilitate recovery efforts in areas affected by the Los Angeles County wildfires earlier this year, the three federal banking agencies and the federal credit union regulator said Tuesday.
The action is intended to allow banks and credit unions to “work with families and businesses without obtaining an appraisal,” according to the joint release by the National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve.
The pause will expire Jan. 8, 2028, the agencies said.
The four agencies said banks and credit unions will still be required to determine that the value of the real estate supports the institution’s decision to make the transaction.
They contended that financial institutions will be better able to lend or modify loans in areas where wildfire and straight-line wind damage has made appraisals challenging to obtain.
Loan processing times are expected to be reduced, the agencies said, which they saiod would facilitate recovery from the disaster.
Between now and early 2028, the four regulators said, they will monitor institutions’ real estate lending practices “to ensure the transactions are being conducted in a safe and sound manner.”
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