Texas Commercial Law Firm
Foreclosure
A state-certified appraisal is required for all federally related transactions which (1) have a value of $1 million or more, (2) are commercial transactions valued at $250,000 or more, or (3) are “complex” residential transactions of $250,000 or more. Financial Institution's Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). A 1-4 unit, single-family residential appraisal may be performed by state-licensed appraisers, unless the size and complexity require a state-certified appraiser. State-licensed appraisers may perform appraisals for (i) non-complex residential properties valued up to $1 million; and (ii) any type of property valued at less than $250,000. No regulatory agency requires an appraisal in a federally-related transaction valued at less than $50,000.
2. Environmental problems are the new owner's responsibility. Depending upon whether the property is residential or commercial, where it is located and the kinds of industrial activity presently occurring in the area or known to have occurred in the past, a lender may be well advised to obtain an environmental assessment of the property prior to foreclosure. This is because once foreclosure occurs and the lender becomes titleholder, the lender will acquire liability under the Comprehensive Environmental Response, Compensation, and Liability Act (usually referred to as “CERCLA” or “Superfund”). Generally speaking, CERCLA provides that any owner in the chain of title becomes liable for environmental cleanup costs of any hazardous substances released on the property, regardless of when such substances were released. Needless to say, depending upon the volume of release of a hazardous substance and the type of hazardous substance, costs of cleanup could be enormous. (See Appendix “D” regarding environmental surveys.)
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