Bank and Thrift Regulation: Observations on Proposed Changes to Appraisal
Requirement (Testimony, 03/01/94, GAO/T-GGD-94-102).

This testimony focuses on the "de minimus" appraisal threshold--the
dollar level that regulatory agencies have set for exempting real estate
transactions of federally insured banks, thrifts, and credit unions from
appraisal requirements. The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 requires that written appraisals, done by
professionals and in compliance with uniform standards, be done for real
estate transactions valued at more than $100,000. In June 1993, federal
regulators proposed a rule change that would raise the threshold to
$250,000, thereby reducing the number of transactions requiring
appraisals, and substituting less formal evaluations. GAO discusses (1)
the current appraisal legislation and requirements; (2) the proposed
change in the threshold; (3) the arguments for and against the proposal;
(4) the regulators' response to public comments; and (5) GAO's
preliminary observations on the proposal's effect on valuations of real
estate, deposit insurance funds, and consumers.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD-94-102
     TITLE:  Bank and Thrift Regulation: Observations on Proposed 
             Changes to Appraisal Requirement
      DATE:  03/01/94
   SUBJECT:  Financial institutions
             Mortgage loans
             Real estate sales
             Appraisals
             Insured commercial banks
             Regulatory agencies
             Real property
             Loan defaults
             Banking regulation
             Certifying officers

             
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