Source: https://nafcucomplianceblog.typepad.com/nafcu_weblog/appraisals/
Timestamp: 2019-04-19 02:20:30+00:00

Document:
Greetings compliance friends! In the wake of excessive flooding brought about by the many recent tragic hurricanes, NCUA together with several other agencies have granted temporary exceptions to the current appraisal requirements in major disaster zones. Since we've received quite a few questions on this, I figured it would be a good opportunity to review the NCUA appraisal requirements and un-package this temporary exemption.
NCUA's appraisal requirements depend on the loan value and its terms. NCUA’s Rules and Regulations do not require a formal appraisal if the transaction is 250k or less. Generally, any loan with a transactional value of $25,500 or less requires only a “written valuation” that meets FIRREA requirements. A loan with a transactional value between $25,501 and $250,000 only requires a formal appraisal if it is a "higher-priced" mortgage loan; and all loans of $250,001 or more require an appraisal.
For transactions requiring an appraisal, the central requirement is that the appraisal must be "performed by a state certified or licensed appraiser." For transactions requiring a written valuation, it must "be performed by an individual having no direct or indirect interest in the property, and qualified and experienced to perform such estimates of value for the type and amount of credit being considered." 12 C.F.R. §722.3(d). The minimum requirements for written estimates of market value are addressed in Appendix B of the Interagency Appraisal and Evaluation Guidelines.
The regional director has granted a waiver from the appraisal requirement for a category of loans meeting the definition of a member business loan.
Appendix A to the Interagency Appraisal and Evaluation Guidelines, provides additional guidance on these exemptions and describes how institutions can comply with Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).The guidance was joined by NCUA, and was attached to Letter to Credit Unions 2010-23.
As referenced in §722.3(f), if a loan is a second mortgage that is closed-end consumer credit secured by the consumer’s principal dwelling and qualifies as a higher-priced mortgage loan (HPML), it may require an appraisal under Regulation Z. §1026.35(c). An HPML is a closed-end secured residential loan "with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction by a certain number of percentage points. §1026.35(c)(2) also provides an appraisal threshold exemption which is currently $25,500, along with additional exemptions to the appraisal rule for HPMLs. The threshold is set to increase to $26,000 on January 1, 2018. The CFPB official commentary discusses all these exemptions in further detail and emphasizes that although these types of transactions may be exempt from the CFPB's appraisal rule, the requirements under FIRREA and §722.3 still apply. Thus, an appraisal would be required for HPMLs between $25,500 and $250,000, and a written valuation conforming to the Interagency Appraisal and Evaluation Guidelines would be required for loans that do not require an appraisal under NCUA. An additional written appraisal for HPMLs may be required for recently acquired properties subject to certain conditions found in §1026.35(c)(4).
In summary, it appears any loan with a transactional value of $25,500 or less requires only a written valuation that conforms to Appendix B of the interagency guidance. A loan with a transactional value between $25,500 and $250,000 only requires a formal appraisal if it is a HPML. All loans carrying a value of $250,001 or more require an appraisal.
On October 16, 2017, NCUA, together with several other agencies, released a Letter to Credit Unions (17-CU-06) granting a temporary exemption to the FIRREA appraisal requirements in major disaster areas, as defined by the President. The exemption provides flexibility to credit unions with loans secured by real estate and located in the affected areas, including parts of Florida, Georgia, Puerto Rico, Texas, and the U.S. Virgin Islands. The exemptions will remain in effect for a three-year period from the date of the declaration.
The order specifically requires that the property involved was located within the major disaster area, there is a binding commitment to fund the transaction, the value of the real property supports the institution's decision to enter into the transaction, and the transaction must continue to be subject to review by management in the course of examinations of the institution.
This waiver is an attempt to ensure that any shortage of appraisers would not further delay the recovery process for these regions. We at NAFCU have been saddened to see the extent of the damage and loss of life and have compiled a list of resources to help credit unions in these disaster areas. Our thoughts and prayers go out to all those who have been affected.
Last week, NCUA joined an Interagency Advisory on the Availability of Appraisers. While the Advisory does not provide any additional guidance, it does seek to alert credit unions to existing potential solutions to problems with appraiser availability.
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) requires NCUA to establish appraisal standards for all federally related transactions. Part 722 of NCUA's regulations provides these standards. Generally, the rules require the appraisal to be performed by a state-certified or state-licensed appraiser. Whether the appraiser needs to be certified or licensed depends on the type of transaction involved. The Interagency Appraisal and Evaluation Guidelines provide an overview of the applicable rules and guidance on developing an appraisal program, choosing an appraiser, and obtaining and reviewing appraisals.
As part of the Economic Growth and Regulatory Paperwork Reduction Act review, commenters raised concerns with the timeliness of obtaining an appraisal. The commenters attributed the issue to problems with the availability of state-certified and state-licensed appraisers. This seemed to be of particular concern in rural areas. The recent Advisory explains a credit union's options in the event a certified or licensed appraiser is not available. In certain situations, the FIRREA permits credit unions to use appraisers who have obtained a temporary practice permit or a temporary waiver instead of a state certificate or license. The Advisory explains both the permit and the waiver.
Temporary practice permits can allow an appraiser who is certified or licensed in State A to practice in State B without having to become certified or licensed in State B. Under 12 U.S.C. § 3351, each state appraiser certifying or licensing agency must temporarily recognize the certificate or license of another state in certain circumstances. The rule states that an agency in State B must temporarily recognize the certificate or license of State A if the property involved is part of a federally related transaction, the appraiser's activity in State B is temporary, and the appraiser registers with State B's certifying or licensing agency. Generally, appraisers are able to apply for a temporary practice permit through State B's agency. Each state's agency will determine the requirements for obtaining a temporary practice permit and any fees associated with doing so, but the rule prohibits the agency from imposing "excessive fees or burdensome requirements."
The rule also requires each state certifying or licensing agency to have a reciprocity policy in place. Under this policy, State B's agency will issue a certificate or license to an appraiser from State A if the licensing and certification program of State A complies with the rules of the FFIEC Appraisal Subcommittee, State A's certifying or licensing requirements meet or exceed the requirements of State B, and the appraiser holds a valid certification from State A.
Under 12 U.S.C. 3348(b), the Appraisal Subcommittee (ASC) may waive any certification or licensing requirement if a written determination is made that appraisals are being significantly delayed because of a shortage of state certified or licensed appraisers. The Advisory explains that a temporary waiver request can be made by a state appraiser certifying or licensing agency, a regulated credit union, or any other persons with a demonstrable interest in appraiser regulation. The FFIEC's regulations govern the process for requesting and obtaining a temporary waiver.
If the requester is a state agency, a specific plan for expeditiously alleviating the scarcity and delays.
The request can be to waive the requirements across the entire state or for a geographical political subdivision. The ASC will review the request and make a determination within forty-five days. The FFIEC must approve any determination to grant the waiver. If the waiver is granted, it will apply to all federally related transactions within the state or subdivision. The waiver will be effective only for the period specified by the ASC, however, the regulations permit the ASC to extend the period if needed. The ASC may also terminate the waiver before the end of the period if the delays cease to exist or the terms and conditions of the waiver are not being met.
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Final Rule, Parts 701 and 722 of NCUA’s Rules and Regulations, Appraisals.
Notice and Request for Comment, Economic Growth and Regulatory Paperwork Reduction Act Review.
2015 Corporate Stabilization Fund Quarterly Report.
Here we’ll just briefly discuss the new final rule regarding appraisals. The NCUA Board approved a new final rule to revise two of the agency’s regulations concerning appraisals. What’s changed? The final rule eliminates the now duplicative requirement for federal credit unions to make available a copy of the appraisal used in connection with a member’s application for a loan secured by a first lien on a dwelling to any requesting member/applicant. It also expands the current exemption for certain transactions involving an existing extension of credit. Under the expanded exemption, a federally insured credit union will be permitted to refinance or modify a real estate-related loan held by that federally insured credit union in a declining housing market, without having to obtain another appraisal, if there is no advancement of new monies or if there is adequate collateral protection even with the advancement of new monies. Finally, the rule also makes a minor technical amendment to the definition of the term “application.” The rule becomes effective 30 days after its publication in the Federal Register.
Chairman Matz welcomed the final rule as credit unions will be able to more easily refinance loans without encountering unnecessary administrative burden. She also noted that these changes will bring NCUA’s rules into parity with the other banking regulators.
NAFCU’s Regulatory Compliance School should be on every compliance professional’s “nice” list. Get comprehensive compliance training on what you need to know now, plus what’s coming up. Save $200 with code HOLIDAY when you register by January 9. Learn more.
Vienna. Here are a few photos from my recent vacation. Although it gets dark earlier in the day and is a little chilly and damp, Vienna is full of Christmas markets this time of year and with the lights, it is quite a charming city. I thoroughly enjoyed Vienna and thought I’d share a little of my experience there with you.
The Reisenrad (ferris wheel) at Prater from Stephansdom’s North Tower – so cold!
Riding the Resisenrad – It’s only about 4:30 in the afternoon!
Rauthauspark (town hall) Christmas Market – where you drink Gluhwein to keep warm!
My Sachertorte and Melange – vacationing is such hard work!
Last week, we blogged about the NCUA Board’s June meeting and promised to provide some more in-depth information regarding some of the proposed rules that the Board approved. Today, we will review the proposed changes to NCUA’s rules relating to appraisals, specifically those at 722.3(a)(5), Section 701.31(a)(1) & (c)(5) which are a result of NCUA’s annual review of one-third of its rules for possible regulatory modernization.
There have been no obvious and material changes in market conditions or the property’s physical attributes which would threaten the property’s adequacy as collateral for the loan.
Finally, as we noted last week, NCUA proposed to amend the definition of “application” in Section 701.31(a)(1) to simply cross-reference the definition in Regulation B.
NCUA Launches Interest Rate Risk Resource Page. Interest rate risk is a high priority at NCUA these days, and this topic is one of NCUA’s 2014 Supervisory Focus for exams. Last week, NCUA announced the creation of a webpage that aggregates the agency’s resources relating to interest rate risk. This includes a video as well as links to specific rules and Letters to Credit Unions.
I Don’t Like Mondays. Actually, I don’t know many people who think Mondays are great, but mine was particularly special! I started off at jury duty, but was not selected and sent home early. I was off to a good start! A large segment of a tree spontaneously fell onto our house this past weekend, so we arranged to have the entire tree removed. The tree removers came on Monday, and for the first time in the owner’s 15+ years of experience, the crane fell onto our house with its brand new roof! Luckily, no one was hurt and the tree remover had my roof repaired, good as new, within 24 hours.
Earlier this week, Steve mentioned NCUA’s Regulatory Alert on the Regulation B Appraisal Disclosure and Delivery Requirements. The alert summarizes requirements under the CFPB’s Equal Credit Opportunity Act (ECOA) Valuations Rule (effective January 18, 2014).
You must notify the applicant in writing within three business days of application of the right to receive a copy of any appraisal developed in connection with the application. Appendix C to the rule includes sample text for this disclosure.
If you have an application that was not originally going to be secured by a first lien on a dwelling and you later determine that it will be secured by a first lien on a dwelling, then you have three business days after you determine the change has occurred to notify the applicant about the right to receive appraisals.
When processing an application for a closed-end loan, you must deliver copies of appraisals and other written valuations “promptly upon completion,” or three business days before consummation, whichever is earlier.
When processing an application for an open-end loan, you must deliver copies of appraisals and other written valuations “promptly upon completion,” or three business days before account opening, whichever is earlier.
You cannot charge the applicant for fees for photocopying or to cover the cost of postage to mail copies of appraisals or other written valuations you provide. However, you can charge a reasonable fee to reimburse the cost of developing an appraisal or other written valuation, unless applicable federal5 or state law prohibits or otherwise restricts it. You cannot condition providing copies on payment of this fee.
Refer to the alert for complete details.
Regulatory Relief. In a letter sent to NCUA on Monday regarding the agency’s 2013 regulatory review, NAFCU General Counsel and Vice President of Regulatory Affairs Carrie Hunt raised numerous issues that deserve the agency’s immediate attention.
Related to today's blog post, one area addressed is the need for NCUA to update its appraisal regulations in light of the CFPB’s ECOA Valuations Rule. Currently, federal credit unions are exempt from the appraisal requirements of Regulation B, as current section 1002.14 contains an exemption from these requirements for credit unions subject to NCUA’s regulation section 701.31(c)(5) regarding the provision of appraisal copies.
"Starting on January 18, 2014, credit unions will be required by Regulation B to provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. Unless NCUA section 701.31(c)(5) is amended, credit unions will also have a duty to make, at the request of the member, copies of appraisals used for that member’s real-estate related loan application available for up to 25 months, regardless of whether the credit is secured by a first lien on a dwelling.
In order to update NCUA regulations to reflect a new world where credit unions are under the rule of Regulation B starting January 18, 2014, NCUA should, at a minimum, change the scope of 701.31(c)(5) to include only subordinate lien loans that fall outside the scope of Regulation B's requirements. This would ensure that for all first lien loans on a dwelling, a member would receive an appraisal provided by the credit union pursuant to section 1002.14 as amended. For all subordinate lien loans, the member would still be able to request a copy of the appraisal from the credit union."
Click here to download NAFCU's comment letter.
Welcome back - we'll keep this nice and easy on your return from the holiday weekend.
Fraud Information Center. I was excited when I saw this mentioned in the Region I Report regarding fraud as I thought NCUA had developed a new way to inform credit unions of potential fraud.
"Take advantage of NCUA’s online Information Center (http://go.usa.gov/r9H4). This webpage includes an update of current fraudulent schemes being aimed at credit unions, contains details about the agency’s fraud hotline (all reports remain confidential), offers background on phishing schemes where email are purportedly coming from NCUA, links to suspicious activity report (SARs) forms and guidance, and connects credit unions with other resources readily available, including the FBI, U.S. Postal Service, and the President’s Identity Theft Task Force, to name a few." (emphasis added).
Unfortunately, the bolded language looks to be a landing page with past Fraud Alerts and Letters to Credit Unions. Hopefully, there is an update or futher enhancements going on behind the scenes as well.
Earlier this month, federal financial regulatory agencies including the CFPB and NCUA, issued a proposed rule to establish new appraisal requirements for higher-risk mortgage loans. The proposed revisions to Regulation Z would implement new TILA section 129H, added to TILA by Dodd-Frank section 1471. The CFPB’s press release on the proposed rule is available here.
Keep in mind that the CFPB has also issued a separate proposed rule on appraisals under Regulation B. That proposal would require mortgage lenders to provide home loan applicants with copies of written appraisals and other home value estimates developed in connection with the application. See our August 20th blog for more details on the Regulation B proposed rule on appraisals.
“Higher-risk mortgage loan.” Under the proposed rule, a “higher-risk mortgage loan” is generally defined as a closed-end consumer credit transaction secured by the consumer’s principal dwelling with an APR exceeding certain statutory thresholds. In general, loans would be “higher-risk mortgage loans” if the APR exceeds the average prime offer rate (APOR) by 1.5 percent for first-lien loans, 2.5 percent for first-lien jumbo loans, and 3.5 percent for subordinate lien loans. Sound familiar? These rate thresholds are similar to the rate triggers currently in Regulation Z for “higher-priced mortgage loans,” a category of loans to which special consumer protections apply under section 1026.35.
The creditor provides the consumer with a free copy of any written appraisals obtained for the transaction at least three (3) business days before closing.
The consumer is acquiring the home for a higher price than the seller paid.
The additional written appraisal, from a different licensed or certified appraiser, generally must include an analysis of the difference in sale prices (i.e., the sale price paid by the seller and the acquisition price of the property as set forth in the consumer’s purchase agreement), changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale. This requirement is designed to address fraudulent property flipping by seeking to ensure that the value of the property being used as collateral for the loan legitimately increased.
For complete details, the proposed rule is available here.
Last Wednesday, the Consumer Financial Protection Bureau (CFPB) released a proposed rule that would amend the Equal Credit Opportunity Act (ECOA)’s Regulation B by requiring mortgage lenders to provide home loan applicants with copies of written appraisals and other home value estimates developed in connection with the application. The rule would ensure that consumers receive information prior to closing about how the property’s value was determined.
Under the proposal, consumers would receive disclosures of their right to receive a free copy of appraisal reports and home value estimates within three days of applying for a loan. Creditors would then be required to provide the reports to consumers as promptly as possible, but in no case later than three days before closing, regardless of whether credit is extended, denied, incomplete or withdrawn.
Also under the proposal, creditors could still charge reasonable fees associated with conducting appraisals and home value estimates. However, the rule prohibits creditors from charging consumer fees for obtaining the reports. This is a change from current practices where consumers must request an appraisal report from the creditor and may be charged a fee to obtain the report.
The CFPB plans to finalize this rule in January 2013. For more details on the proposal, you can view the proposal here and a summary of the CFPB’s proposal here.
"(b) Credit unions. A creditor that is subject to the regulations of the National Credit Union Administration on making copies of appraisal reports available is not subject to this section."
Federal credit unions have historically been able to follow 12 CFR 701.31(c)(5) of NCUA's regulations but the CFPB's proposal would force CUs to comply with Regulation B for appraisals - including the new requirements.
In late June, we blogged about the CFPB's second round of the Know Before You Owe project to combine the TILA and RESPA disclosures. If you didn't have a chance to look at the prototypes at that time, you can still review the disclosures and send NAFCU any comments that you might have. This could be design-related or actual disclosure issues that the new forms don't address. Kick the tires, as they say, and send us your comments (send them to Dillon Shea - dshea@nafcu.org).
Yesterday, Fannie Mae released a reminder about upcoming changes to their appraisal forms. The notice also discusses various training options available. If your credit union sells mortgages on the secondary market, be sure to take a look at these changes. A broader discussion of the Uniform Collateral Data Portal (UCDP) is here.
These documents usually look scarier than they really are. The total document is 70 pages in length, but the first 15 pages are made up of historical texts, reactions to comments, etc. The new guidelines start on page 16. They did a nice job of organizing the guidelines, including a handy-dandy table of contents.
So, when you do appraisal related research, here appears to be the universe of available regulatory "stuff."
The new guidelines, which will eventually be published in The Federal Register.
The 2005 Interagency FAQs on Residential Tract Development Lending.
There's also the recent interim final rule that amends Regulation Z concerning appraisals.
I think that's more than enough appraisal information for a Monday.
As those of you who deal with Fannie Mae and/or Freddie Mac know, Fannie and Freddie now require that lenders follow the Home Valuation Code of Conduct (HVCC) in order to deliver conventional, single-family loans originated on or after May 1, 2009 to them. Many of you have told us about the difficulties you've had with the HVCC. NAFCU continues to seek relief from HVCC-related burdens. We also sent a letter to the Hill on this issue. Download H R 3044 Comment Letter.
For example, here's a Fannie FAQ that attempts to clarify a major area of confusion: providing borrowers a copy of their appraisal.
Question: Can you clarify the requirements around Section II of the Code requiring the borrower’s receipt of the appraisal?
Answer: The Code requires that a borrower be provided a copy of the appraisal no less than three days prior to the closing of the loan. The Code allows that the borrower may waive this three-day requirement. Situations where a borrower is unaware of his or her right to a copy of the appraisal prior to the three days and is then provided a waiver of that right at the closing table, would not be compliant with the intent of the Code. The time period of rescission in a refinancing situation does not constitute a valid three-day waiver period.
The Code does not specify what form the waiver must take or whether it be oral or written. In addition, the Code does not prohibit that a waiver, given in a timely manner, be recorded at some later point when the parties are available. Each lender must develop its own policies, procedures, and documentation. For example, a lender may obtain a waiver from a borrower through an email, phone call, or some other means, prior to the three-day period, and then have that waiver recorded in writing at the settlement table or at some other time.
The three-day period begins on the day of the receipt of the appraisal. For example, in a non-waiver situation, where a borrower received an appraisal on Monday, the closing could be held on Wednesday. Saturday is included for purposes of counting the three-day period. Sundays and legal holidays are not included for counting the three-day period.
I would forward this to whomever at your credit union is tracking the HVCC issue.
In other compliance happending, the Fed has updaded the dollar amount of its fee-based HOEPA trigger down to $579, effective January 1, 2010. Read all about it here.
The Home Valuation Code of Conduct required the creation of the IVPI (I wasn't going to spell that out twice). This entity was to serve as a body that would accept referrals and complaints about noncompliance with the HVCC. Fannie Mae issued a Lender Letter recently to note that the IVPI is not in place yet. It is still being finalized. A temporary process will be put in place until the IVPI starts rolling. Read all about it here.
Editor's Note: IVPI does look like a Roman Numeral, but it isn't. The P won't work. For anyone who wants to quickly convert Roman Numerals into normal numbers (and vice versa), go here.
Q4. When will the federal banking agencies, Federal Financial Institutions Examination Council, and Farm Credit Administration have a system for registering employees of federally insured depository institutions and their subsidiaries?
A specific date has not been set, but Fannie Mae will communicate updates to lenders as more information becomes available. Lenders are expected to comply with their regulators’ requirements as systems and processes are established.
Home Valuation Code of Conduct; Whoops!
You may have heard about the Home Valuation Code of Conduct (HVCC). For credit unions that do mortgage lending, this is a big deal. Well, here's some help.
Fannie Mae has put together a very nice HVCC resource page. Access it here. It has an FAQ, the HVCC itself, and some Fannie-related guidance. (OK, that last phrase sounds funny.) Seriously, though - this is a very good source of HVCC information.
NAFCU is also offering an HVCC/Appraisal webcast later this month. Read all about it here. We put together a nice line-up. We have someone from NCUA's Examination and Insurance side, a person from NCUA's Office of General Counsel, an expert from Fannie Mae, and an expert from the appraisal industry. I can't imagine a better panel to address the changes.
Yesterday's post on preemption had a dead hyperlink. Use this link to access NCUA's recent legal opinion letter, which indicates that NCUA's regulations preempt a New York State law that attempts to limit insurance-related activities at federal credit unions. I apologize for any inconvenience.
Yesterday, FinCEN issued its annual report for 2008. Access it here. If you need to do board or staff training, this document does a good job of giving you the history of FinCEN, basic information and definitions for the filings, and a broad overview of what happened this year at that Agency.
Last week, Fannie Mae and Freddie Mac reached a new valuation agreement with New York Attorney General Andrew Cuomo. Here's a NAFCU Today article that details the changes. Effective date? The new rules will be effective for single-family mortgage loans (except government-insured loans) that are originated on or after May 1, 2009. Here's a link to the new code provided on Fannie Mae's website. Look for more guidance in the next week or so.
FFIEC regulators, including NCUA, have issued proposed guidelines to address appraisals. Read a NAFCU Today article about the proposal here. (The article also contains a link to the actual proposal.) If your credit union does real estate lending, make sure someone is aware of the proposal.
Earlier, I posted about "Web 2.0" and your reputation. In short, many consumers have blogs, use Twitter and post videos about...well, whatever they want. The earlier post showed how Bank of America was taking a beating over some overdraft protection fees.
Well, be sure to read this post by Tim McAlpine of Currency Marketing. He does a great job of showing how Motrin managed to anger many, many mothers. And how their anger is surging through the Internet.
My thoughts are this: to properly manage your credit union's reputation, you have to understand today's environment. If you do something to anger a member, that member has many ways of venting their frustration on the World Wide Web. Does your credit union have a mechanism to monitor what is being said about you in blogs, on Twitter or in Pod-casts?
(They agree) to adopt a Home Valuation Protection Code (Code)...Fannie Mae has requested comments from its customers and other market participants regarding the implementation and deployment of the Code.
The Code would apply to single-family mortgage loans (except government-insured loans) nationwide that are originated on or after January 1, 2009. Among other things, the Code would require credit unions to select appraisers and not use reports completed by appraisers selected by any other party, to establish a hotline and email address for appraisal related complaints and report improper conduct to the Institute, to report appraisers that the credit union reasonably believes is violating applicable laws to the Institute and certifying agency, and to the quality control test. It would also prohibit credit unions from influencing appraisers.
In short, this agreement would create a new appraisal system for anyone who wants to sell a mortgage to Fannie or Freddie. Hmmm. But don't we already have an appraisal reg? I wasn't the only one who thought so. Here's a critical response to the agreement from OCC Comptroller John Dugan. And here's NAFCU's response.
Only time will tell what happens here. The agreement would be one more thing for credit unions that do mortgage lending to monitor and follow. But it has created a hail-storm of opposition from some pretty big players.
Yesterday, NCUA issued Legal Opinion Letter 08-0129 (February 8, 2008). You may access it here. I find the letter interesting for a few reasons.
First, any legal opinion letter sheds light on an issue, and therefore should clarify some confusion. This letter clarified that credit unions are not required to have a checklist or narrative to document its review of a real estate appraisal. NCUA guidance issued in 2005 indicated that credit unions should do so. NCUA's letter notes the practice of using a checklist or narrative "although not required,...is recommended in interagency guidance."
Second, this legal opinion letter sheds some light on agency recommendations. The recommendation to use a checklist or narrative was issued via a Letter to Credit Unions in 2005. NCUA's legal opinion letter clarifies that, if push comes to shove, credit unions do not have to follow that guidance.

References: §722
 §722
 §1026
 §1026
 §722
 §1026
 § 3351