5-year waiver of real estate appraiser credentialing requirements backed by ND governor, bank/credit union supervisors

Request is out for comment until July 1

At least a five-year waiver of federal appraiser requirements for residential and commercial real estate transactions involving less than $500,000 and $1 million, respectively, is sought throughout the state of North Dakota in a request from the state’s governor, its banking regulator and the North Dakota Bankers Association.

The request to the Federal Financial Institutions Examination Council (FFIEC) Appraisal Subcommittee (ASC) was published in the Federal Register Thursday with a public comment deadline of July 1.

Specifically, the request seeks a waiver of appraiser credentialing requirements for appraisals for federally related transactions under $500,000 for 1-to-4 family residential real estate transactions and under $1,000,000 for agricultural and commercial real estate “for a period of not less than five years.”

The request was initially submitted Aug. 1, 2018, in a letter to the ASC from North Dakota Gov. Doug Burgum, the North Dakota Department of Financial Institutions, and the North Dakota Bankers Association. Subcommittee staff replied Sept. 7 with information required for a complete waiver request, which was submitted April 10.

In its April 10 reply, the requesters said consumers are being harmed by a scarcity of qualified appraisers; they also noted frustration with the waiver process, which they said has resulted in just one temporary waiver in 30 years.

“As stated in the original request, consumers have been harmed by the lack of appraiser availability in the State of North Dakota; a temporary waiver will help alleviate this problem without jeopardizing the safety and soundness of North Dakota’s banks, credit unions, and other regulated mortgage lenders,” they wrote. They explained that a waiver of the federal statutory education and licensing requirements for appraisers in North Dakota “will result in lenders having the option to have independent Uniform Standards of Professional Appraisal Practice (USPAP)-compliant appraisals conducted by other qualified individuals.”

The ASC is seeking comments on all aspects of the waiver request. It also seeks input, including supporting data, on the following specific issues:

  • whether there is a scarcity of certified or licensed appraisers available to perform appraisals for federally related, 1-to-4 family residential transactions above $250,000 and below $500,000, or agricultural and commercial real estate transactions above $500,000 and below $1 million, in North Dakota or any geographical political subdivision of North Dakota;
  • whether there are significant delays in the performance of appraisals in North Dakota, or in any geographical political subdivision of North Dakota, for such transactions (including supporting data such as the average length of time between the date an appraisal is ordered and the delivery date);
  • factors that may be leading to significant delay in the performance of appraisals in connection with federally related transactions in North Dakota, and specifically whether scarcity of appraisers is leading to such significant delay, for residential appraisal reports or agricultural and commercial appraisal reports; and
  • the appropriate scope, terms, or conditions of any temporary waiver, should the ASC find that such a waiver is warranted, including whether the requested 5-year duration of a waiver would be appropriate, types of federally related transactions that any waiver should cover, dollar limits for any transactions covered by a waiver, or whether the waiver should be limited to any particular area or geography.

The ASC will render a decision within 15 days after that, according to the notice. The request, if approved by the ASC, also requires approval of the FFIEC.

Appraisal Subcommittee; Notice of Received Request for a Temporary Waiver

Aug. 1, 2018, request

Sept. 7, 2018, response

April 10, 2019 reply from requester