US Regulators Deny Banks’ Request to Cap Home Appraisal Do-Overs

Lenders can use an existing process from the Department of Veterans Affairs as a model for dealing with challenges to property value appraisals, federal regulators said, rejecting a push from banks to limit reappraisal requests.

Banks and realtors can design programs for “reconsiderations of value” that incorporate the VA’s “Tidewater” process, which allows no more than three requests to redo appraisals on homes purchased with a VA-backed loan, under final guidance released by five federal regulators Thursday.

But the regulators—the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the National Credit Union Administration, ...