All Bank real estate related financial transactions regardless of size must have either an appraisal or an evaluation. The terms “appraisal” and “evaluation” have special meaning and use for appraisers and banks. An appraisal must conform to generally accepted appraisal standards as evidenced by the Uniform Standards of Professional Appraisal Practice (“USPAP”) promulgated by the Appraisal Standards Board (ASB) of the Appraisal Foundation, but an evaluation need not conform to USPAP. This distinction is important because appraisers who are bound by USPAP must comply with USPAP whenever they provide an opinion of value.
For consumer credit transactions secured by the principal dwelling of the consumer, the appraisal independence requirements under Reg Z apply. The requirements (discussed herein), although promulgated for consumer transactions, provide valuable guidance for all appraisals.