- This topic has 1 reply, 2 voices, and was last updated 1 year, 10 months ago by
.
-
Posts
-
I am new to this bank and reviewing the flood insurance amount for a loan. The Bank has typically used the appraisal or market evaluation to determine the insurable value for flood insurance calculations. The appraisal for this loan specifically states that the cost approach was not utilized in the analysis of the subject property. There are two appraisal evaluations included on this appraisal and they are based on the sales comparison approach and the income approach. I have read FDIC and FRB training materials that refer to using an appraisal based on a cost-value approach to establish the insurable value. Do we have a problem with this loan since we used the appraised value, and it was not based on a cost-value approach? Thank you.
I see a couple challenges with your question:
1. You have stepped outside of the “typical” and will need to be able to explain why. Since this loan was treated differently.
2. Insurable amount = Insurable value by way of the regulation. So does the policy you received indicate the what they valued and insured the property for without including the land? Land can not be used in the calculation.
The regulation states; The insurable value of the building may generally be the same as 100 percent Replacement Cost Value (RCV), which is the cost to replace the building with the same kind of material and construction without deduction for depreciation.NOTICE: This email message, including any attachments, is intended only for the addressee, and may contain confidential and privileged information either as protected work product or confidential client information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, do not read, copy, retain, or disseminate this message or any attachment, and please contact the sender by reply e-mail or at 888.760.5646 and destroy all copies of the original message and attachments. Neither the transmission of this message or any attachment, nor any error in transmission or misdelivery shall constitute waiver of any applicable legal privilege.
THIS EMAIL AND ITS ATTACHMENTS DO NOT CONSTITUTE LEGAL ADVICE
- You must be logged in to reply to this topic.