Collateral evaluation standards.

CFR · 2024-01-01 · US · Title 12

(a) When real, personal, or intangible property is taken as security for a loan or is the subject of a lease, an evaluation of such property shall be performed in accordance with § 614.4260 and the institutions' policies and procedures. Such a collateral evaluation shall be identified as either a collateral valuation or a collateral appraisal. Specifically, all collateral evaluations must: (1) Value the subject property based upon market value as defined in § 614.4240(l); (2) Be presented in a written format; (3) Consider the purpose for which the property will be used and the property's highest and best use, if different from the intended use; (4) Be sufficiently descriptive to enable the reader to ascertain the reasonableness of the estimated market value and the rationale for the estimate; (5) Provide sufficient detail (including an identification and description of the property) and depth of analysis to reflect the relevant characteristics and complexity of the subject property; (6) Analyze and report, as appropriate, for real, intangible, and/or personal property, on: (i) The current income producing capacity of the property; (ii) A reasonable marketing period for the property; (iii) The current market conditions and trends that will affect projected income, to the extent such conditions will affect the value of the property; (iv) The appropriate deductions and discounts as they would apply to the property, including but not limited to, those based on the condition of th

official document · source cfr-2024 · id 12:§ 614.4250