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NCUA Board Member Todd M. Harper Statement on the Interim Final Rule and Request for Comment on Real Estate Appraisal Relief

April 2020
NCUA Board Member Todd M. Harper Statement on the Interim Final Rule and Request for Comment on Real Estate Appraisal Relief
Board Member Todd M. Harper

NCUA Board Member Todd M. Harper provides remarks from his home during the agency's April 2020 Board meeting.

As Prepared for Delivery on April 16, 2020

Tim and Ian, thank you for your informative briefing today. And, thank you to everyone from the Office of Examinations and Insurance and the Office of General Counsel who worked on this Interim Final Rule on real estate appraisal relief.

In light of state and local government restrictions on non-essential movement, stay-at-home orders, and social distancing mandates presently required to fight the spread of COVID-19, this real estate appraisal relief rule makes common sense.

These scientifically recommended efforts will fight the pandemic, but they also may make it harder to complete appraisals before a mortgage transaction closes, precisely when mortgage rates have fallen significantly and consumers want expeditious access to credit at lower rates. As a result, the interim final rule would allow credit unions to defer appraisals and written estimates of market value for a grace period of up to 120 days after loan closing for covered transactions until December 31, 2020.

I should emphasize this temporary, short-term deferral of an appraisal is not a waiver of an appraisal, because appraisals and written estimates of market value are being deferred, not waived. Credit unions must take steps to document the value within the required deferral timeframes, and the proposal contains guardrails to ensure that such estimates happen and what will happen if a property is incorrectly valued.

Additionally, like the COVID-19 regulatory relief rule we just considered, this interim final rule is both targeted and temporary. This interim final rule will be another tool for credit unions to use as they work to keep real estate markets liquid during the COVID-19 crisis.

And, the demand for mortgage refinancing is great. In fact, data collected by the Mortgage Bankers Association through its Refinancing Index show that, year over year, there has been a nearly 500-percent increase in refinancing activity over the same week in mid-March in 2019.

This interim final rule, therefore, could potentially provide credit union members a quicker reduction in monthly payments and expeditious access to less expensive credit. For families who have experienced declines in household income because of COVID-19, these refinancing opportunities may be the lifeline needed to get back on their feet.

Finally, the interim final rule is consistent with the regulation approved by the other prudential regulators earlier this week.

For all of these reasons, I will vote in favor of this interim final rule.

Thank you again to the staff who worked quickly to put this proposal together. I have no questions and no further comments at this time, Mr. Chairman.

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