Attend the CRE Lending: Cash Flow, Cap Rates and Other Factors Seminar from the convenience of your own office or home via Live Streaming Video as it happens on Thursday, June 24th (9:00 am – 4:00 pm Central Time), or at your own convenience with 6 months of OnDemand playback.
An important part of the commercial real estate (CRE) lending process is the review and interpretation of the property appraisal. This program covers the major issues of the entire appraisal process, including a brief review of selecting and engaging a qualified appraiser, but focuses more on reviewing the report for integration into the overall credit analysis. Fundamental principles and features of commercial appraisals are covered, as well as the primary analytical techniques such as net operating income (NOI) for basic, income-producing properties. This class will also provide an overview of the 2010 Interagency Appraisal and Evaluation Guidelines and the 2018 Frequently Asked Questions on the Appraisal Regulations and the Interagency Appraisal and Evaluation Guidelines, with tips for integrating the Guidelines and FAQs into your existing policies, plus other practical issues that community banks face, including a brief look at high volatility CRE (HVCRE).
This is part two of a two part series. Find complete series information here: 2 Day Commercial Real Estate Seminar OnDemand with Live Streaming
CRE Appraisals: Reviewing & Interpreting Seminar OnDemand with Live Streaming has been submitted to ABA Professional Certifications for CE credit review and is pending approval. Once we receive notification of the credit approval, we will notify attendees.
- Why review appraisals? (Beyond regulatory requirements)
- Types of reviews
- 14 review points from FIRREA
- What is FIRREA? (and other current regulatory guidelines, including latest appraisal guidelines issued in 2010 and FAQs issued in 2018)
- The five minimum standards (derived from FIRREA), and what they really mean
- Partial exemptions, full exemptions and minimum standards for the report
- A sample compliance review checklist
- Technical/internal (and typical commercial appraisal sections)
- Letter of transmittal
- Appraiser qualifications
- Types of appraisals by scope (2006 scope of work rule that revised old definitions of complete and limited)
- Types of appraisals by format (2014 revisions to old definitions of self-contained, summary and restricted use)
- Assumptions and limiting conditions
- Property identification and ownership interest
- Unique characteristics of the major types of real estate, and how these affect the appraisal
- Approaches to value
- How the cost approach works
- The direct capitalization method for the income approach: net operating income (NOI) concepts and understanding key variables of vacancy, management fees, replacement reserves and capitalization (cap) rates
- Direct sales comparison
- Reconciliation of values and value conclusion
- A sample technical review checklist
- Outside/third party
- How appraisers self-regulate via the Uniform Standards of Professional Appraisal Practice (USPAP) and state licensing
- Getting another appraiser to do the review under USPAP 3 guidelines and sample review comments
- Appraisal review outcomes: When to request revisions
- Using your analysis to validate existing or older appraisals, with a suggested format for documenting your conclusions
Who Should Attend?
CRE lenders, commercial lenders, credit analysts, mortgage lenders, private bankers, small business lenders, loan review specialists, special assets officers, lending managers and credit officers involved in the CRE lending process. Also intended for support personnel involved in the ordering and reviewing of commercial appraisals.
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