Subject : I am introducing an asset market value risk factor to the interest rate of a residential mortgages.
I would ask that the FDIC consider each Federally Insured Bank include a requirement to have an additional value check and risk factor developed on all Original Appraisal Reports (OAR). This needs to be done with regression analysis and using experience local appraisers. The risk factor would base on the residual percentage of the regression analysis. The risk factor would be added into the loan interest rate (if the residual percentage is greater than 9% ). The regression value would not be based on the limited three to six comparables of an OAR, but on possibly 100s of comparables and this value would not be subject to the same bias from mortgage companies. The purpose of the regression analysis will be to quantify the risk factor of the asset and check the OAR value (Transparency to the investors).
The risk factor could be appealed by the mortgage companies with a reconciliation process, which would involve an outside reviewer appraiser who has been training in regression analysis and licensed in the state of the subject property.