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Regulators Grant Relief from Appraisal Requirements on Real Estate in Los Angeles

"The agencies have determined that the disruption of real estate markets in the area designated as adversely affected by the major disaster interferes with the ability of depository institutions to obtain appraisals that comply with Title XI statutory and regulatory requirements."
Federal Banking Agencies' Statement and Order
"The agencies have determined that the disruption of real estate markets in the area designated as adversely affected by the major disaster interferes with the ability of depository institutions to obtain appraisals that comply with Title XI statutory and regulatory requirements."
Federal Banking Agencies' Statement and Order

Federal banking regulators issued a temporary order granting exceptions to appraisal requirements for real estate-related transactions in Los Angeles County, California. The relief follows a disaster declaration issued by President Biden on January 8, 2025, "as a result of wildfires and straight-line winds."

Under the order, banks and credit unions may proceed with transactions without full Financial Institutions Reform, Recovery, and Enforcement Act ("FIRREA") appraisals, provided three conditions are met: (i) the property is located in the disaster area; (ii) the institution makes a binding commitment between January 8, 2025; and (iii) the property's value supports the decision to lend.

The exceptions remain in effect until January 8, 2028. Transactions remain subject to internal and regulatory review.

Primary Sources

  1. OCC, Federal Reserve System, FDIC, NCUA: Statement and order; temporary exceptions: Temporary Exceptions to FIRREA Appraisal Requirements in Los Angeles County as Affected by California Wildfires and Straight-line Winds
  2. FRB: Joint Press Release: Agencies take action on appraisal requirements in an area affected by California wildfires and straight-line winds
  3. OCC: Press Release: Agencies Take Action on Appraisal Requirements in an Area Affected by California Wildfires and Straight-line Winds
  4. FDIC: Press Release: FDIC Issues Temporary Exceptions to Appraisal Requirements in Los Angeles County as Affected by California Wildfires and Straight-line Winds

Tags

Regulated Products
Real Estate / Mortgages
Body of Law
Banking Law
Jurisdiction
US - Federal
Organization
US Banking Regulators
Sub-Author
Comptroller, FDIC, Federal Reserve Board, NCUA