Federal regulators have paused certain appraisal requirements for real estate-related transactions in Los Angeles County due to wildfires.
This step was taken to help facilitate recovery efforts from wildfires and straight-line wind damage in the region.
This joint decision is designed to allow banks and credit unions to work with families and businesses without obtaining an appraisal. However, regulators said that banks and credit unions will still be required to determine that the value of the real estate supports the institution’s decision to enter into the transaction.
The action is a joint decision by the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board, National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC).
Through this action, 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. Further, this move is anticipated to reduce loan processing times, which will also help to facilitate recovery from the disaster.
This action ius set to expire on Jan. 8, 2028.
Going forward, the four agencies will monitor institutions’ real estate lending practices to ensure the transactions are being conducted in a safe and sound manner.