94-3273. Real Estate Appraisal Exceptions in Major Disaster Areas

[Federal Register Volume 59, Number 29 (Friday, February 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3273]


[[Page Unknown]]

[Federal Register: February 11, 1994]


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DEPARTMENT OF AGRICULTURE
DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 34

FEDERAL RESERVE SYSTEM

12 CFR Part 225

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 323

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 564

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 722

 

Real Estate Appraisal Exceptions in Major Disaster Areas

AGENCIES: Office of the Comptroller of the Currency, Treasury; Board of 
Governors of the Federal Reserve System; Federal Deposit Insurance 
Corporation; Office of Thrift Supervision, Treasury; and National 
Credit Union Administration.

ACTION: Statement and Order; temporary exceptions.

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SUMMARY: Section 2 of the Depository Institutions Disaster Relief Act 
of 1992 (DIDRA), authorizes the Federal financial institutions 
regulatory agencies to make exceptions to statutory and regulatory 
requirements relating to appraisals for certain transactions. The 
exceptions are available for transactions that involve real property in 
major disaster areas when the exceptions would facilitate recovery from 
the disaster and would be consistent with safety and soundness. The 
exceptions expire on January 17, 1997.

DATES: This order is effective on February 11, 1994 and expires on 
January 17, 1997.

FOR FURTHER INFORMATION CONTACT:

Office of the Comptroller of the Currency (OCC)

    Thomas E. Watson, National Bank Examiner or William C. Kerr, 
National Bank Examiner, [phone], Office of the Chief National 
Bank Examiner; or Horace G. Sneed, [phone], Senior Attorney, 
Bank Operations and Assets Division, 250 E Street, SW., Washington, DC 
20219.

Board of Governors of the Federal Reserve System (Board)

    Roger T. Cole, Deputy Associate Director, [phone], Rhoger H. 
Pugh, Assistant Director, [phone], Stanley B. Rediger, 
Supervisory Financial Analyst, [phone], Virginia M. Gibbs, 
Supervisory Financial Analyst, [phone], Division of Banking 
Supervision and Regulation; or Gregory A. Baer, Senior Attorney, (202) 
452-3236, Legal Division. For the hearing impaired only, contact 
Dorothea Thompson, Telecommunications Device for the Deaf (TDD), (202) 
452-3544, 20th and C Streets, NW., Washington, DC 20551.


Federal Deposit Insurance Corporation (FDIC)

    Robert F. Miailovich, Associate Director, [phone], James D. 
Leitner, Examination Specialist, [phone], Division of 
Supervision; or Walter P. Doyle, Counsel, [phone], Legal 
Division, 550 17th Street, NW., Washington, DC 20429.

Office of Thrift Supervision, Treasury (OTS)

    Robert Fishman, Senior Program Manager, Credit Risk, (202) 906-
5672; Deirdre Kvartunas, Program Analyst, [phone]; Diana Garmus, 
Deputy Assistant Director, Corporate Activities, [phone]; Ellen 
J. Sazzman, Attorney, Regulations and Legislation Division, Chief 
Counsel's Office, [phone]; 1700 G Street NW., Washington, DC 
20552.

National Credit Union Administration (NCUA)

    Michael J. McKenna, Office of General Counsel, [phone], or 
Alonzo Swann, Office of Examination and Insurance, [phone], 1775 
Duke Street, Alexandria, VA. 22314.

SUPPLEMENTARY INFORMATION:

Statement

    Section 2 of DIDRA, 12 U.S.C. 3352, authorizes the agencies to make 
exceptions to statutory and regulatory appraisal requirements for 
transactions with respect to real property located in areas that the 
President has determined, pursuant to section 5170 of title 42, that a 
major disaster exists, provided that the exception would facilitate 
recovery from the major disaster and is consistent with safety and 
soundness.\1\ Such exceptions expire not later than three years after 
the date of the President's determination that a major disaster exists 
in the area.
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    \1\The agencies must make the exception no later than 30 months 
after the date on which the President determines that a major 
disaster exists in the area.
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    On January 17, 1994, the President determined that a major disaster 
existed in California's Los Angeles, Orange, and Ventura counties 
because of the earthquake that occurred in and around the city of Los 
Angeles on January 17, 1994. The agencies believe that granting relief 
from the appraisal requirements for certain real estate transactions in 
the area affected by the earthquake is consistent with the provisions 
of the DIDRA.
    The agencies have determined that the disruption of real estate 
markets in the affected area interferes with the ability of depository 
institutions to obtain appraisals that comply with statutory and 
regulatory requirements and, therefore, would impede institutions in 
making loans and engaging in other transactions that would aid in the 
reconstruction and rehabilitation of the affected area. Accordingly, 
the agencies have determined that recovery from this major disaster 
would be facilitated by excepting transactions involving real estate 
located in the area directly affected by the earthquake from the real 
estate appraisal requirements of Title XI of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (FIRREA) as amended and 
regulations promulgated thereto. This has the effect of excepting 
certain transactions from the definition of ``federally related 
transactions.''
    The agencies have also determined safety and soundness would not be 
adversely affected by such exceptions so long as the depository 
institution's records relating to any such excepted transaction clearly 
indicate either that the property involved was directly affected by the 
major disaster or that the transaction would facilitate recovery from 
the disaster and there is a binding commitment to fund the transaction 
prior to January 17, 1997. In addition, the transaction must continue 
to be subject to review by management and by the agencies in the course 
of examination of the institution under normal supervisory standards 
relating to safety and soundness, though the transactions need not 
comply with the specific requirements of title XI of FIRREA and the 
agencies' appraisal regulations.

Expiration Date

    Any exceptions provided under the order shall expire not later than 
three years after the date on which the President determines, pursuant 
to section 401 of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, 42 U.S.C. 5170, that a major disaster exists in the 
area. Accordingly, exceptions for the major disaster declared due to 
the earthquake expire on January 17, 1997.

Order

    In accordance with section 2 of DIDRA, relief is hereby granted 
from the provisions of title XI of FIRREA and the agencies appraisal 
regulations for any real estate-related financial transaction that 
requires the services of an appraiser under those provisions, provided 
that:
    (1) The transaction involves real estate located in an area that 
the President has determined, pursuant to section 401 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5170, 
is a major disaster area as a result of the January 17, 1994, 
earthquake in Southern California and has been designated eligible for 
Federal assistance by the Federal Emergency Management Agency 
(FEMA);\1\
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    \1\These areas include the counties of Los Angeles, Orange, and 
Ventura in the state of California. The exception would also include 
any other such areas that the President subsequently declares are 
major disaster areas as a result of this earthquake.
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    (2) (a) The real property involved was directly affected by the 
major disaster; or
    (b) The real property involved was not directly affected by the 
major disaster but the institution's records explain how the 
transaction would facilitate recovery from the disaster;
    (3) There is a binding commitment to fund a transaction that is 
made within three years after the date the major disaster was declared 
by the President; and
    (4) The institution retains in its files, for examiner review, 
appropriate documentation supporting the property's valuation.

Dated: February 4, 1994.
Eugene A. Ludwig,
Comptroller of the Currency.

    Dated: Feb. 7, 1994.
    By order of the Board of Governors of the Federal Reserve 
System.
William W. Wiles,
Secretary of the Board.

    Dated: February 3, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.

    Dated: January 27, 1994.

    By the Office of Thrift Supervision.
Jonathan L. Fiechter,
Acting Director.

    Dated: February 1, 1994.
Becky Baker,
Secretary of the Board, National Credit Union Administration.
[FR Doc. 94-3273 Filed 2-10-94; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P; 6720-01-P; 7535-01-P