North Dakota has become the first state to ask for a federal waiver from real estate appraisal requirements to allow banks to do their own property valuations.
Gov. Doug Burgum and Lise Kruse, the commissioner of the Department of Financial Institutions, requested the temporary waiver, citing several factors including a drop in appraisers located in the state and a 12% increase in the state's population.
Appraisals in some parts of the state are taking up to three months, according to the state's 105-page application for a waiver from the Federal Financial Institutions Examination Council's Appraisal Subcommittee, which has oversight of appraisal programs.
Technically, state officials are asking to raise the limits that trigger an appraisal requirement on a loan to $500,000 for residential mortgages, from the current $250,000; and $1 million for business and agricultural loans, from the current $500,000.
The mortgage industry has been sounding the alarm for years of a shortage of appraisers as a result of the aging industry, lower pay and heavy workloads. The government has responded by seeking to reduce licensing requirements and suggesting states apply for waivers.
In a press release issued Monday by the Conference of State Bank Supervisors, Kruse said banks in the state are well qualified to take appraisals in-house.
“North Dakota financial institutions are community based and relationship oriented," she said. "They are well prepared to fairly and accurately assess property values, which will provide relief to the existing supply of appraisers."