Appraisal reviews are a necessary step in the underwriting process to ensure that the appraisal is accurate and compliant.
Many of the findings that result from performing an appraisal review are important to include in the credit write-up and in making a decision on the loan. These are features of the appraisal that may impact underwriting but are not necessarily addressed by the appraiser. Key areas to consider include:
- Valuation of the property
- Is the term of the loan within the remaining economic life of the property
- Are there other unique features of the property that increase the potential viability of the value
- Are actual rents significantly different than market rents
- Comment on features that may create credit or loan structure issues
CUBG takes a conservative view of unique properties, taking into account the difficulties that arise in working out a loan where those properties need to liquidated or resold.