APPRAISAL REVIEW & MANAGEMENT
Due to rapidly declining real estate values and the Interagency Appraisal and Evaluation Guidelines interjected by federal banking agencies, community banks are facing unprecedented pressure and supervision in appropriately valuing the collateralized assets within their portfolios. Throughout the country, banks have seen the value of real estate collateralized loans drop considerably. As these credits are classified, regulators are taking an aggressive approach in verifying that valuations are recent and confirming the accuracy given today’s economic environment. Community banks face the added pressure of being certain that these valuations are independent of the bank’s lending function, as required under the new Dodd-Frank guidelines.
Dittrich & Associates understands the importance of realizing the appropriate value of the collateral, and has worked with community banks in establishing an appraisal policy that determines the appropriate loss on a credit while ensuring a smooth regulatory environment. Our team will work closely with your Credit officers in determining the best methodology for assessing market value and in documenting this decision-making process. Such an investment in the appropriate valuation resources ensures that your collateral position is justified and supported while minimizing the potential loss that could be forced through non-compliance.
Dittrich & Associates has developed an expertise to assist bankers in developing their own internal valuation system and we have helped banks throughout the country implement these services in the following ways:
ü Establishment of an effective “Appraisal Policy” that provides a direction for valuation decisions and that is in compliance with regulatory requirements, including those set forth in the Dodd-Frank legislation.
ü Implementation of ordering processes that insure that valuations/appraisals are complete, timely and independent of the lending function.
ü Development of systems, procedures, and management reporting requisite to monitoring performance and insuring regulatory compliance.
ü Review of existing appraisals to insure timely impairment analysis, including proper calculations for ALLL.
ü Third party appraisal reviews for clients
We invite you to contact us about the changing nature of the appraisal process and to consider how we can help you develop a “state of the art” process for your bank.