Before the pandemic, financial institutions in North Dakota approached BND to assist them with collateral valuations. A collateral valuation measures the value of the collateral being used for loans in their institutions. They cited a lack of staff time, expertise and independence along with a lack of comparative data as primary reasons for requesting the service from BND.
The 2021 North Dakota Legislature approved the addition of six staff members so BND could add the service which generates revenue for the State. After a pilot project in the fall of 2021, the Bank made the services available to all financial institutions in early 2022.
Only financial institutions or attorneys working on behalf of a financial institution can request a collateral valuation for the following valuation services:
- Farm Real Estate Evaluations
- Appraisal reviews for Farm and Commercial Real Estate Loans
- Chattel Collateral Valuations
For Real Estate and Chattel Evaluations, the collateral must be located in the state of North Dakota. The only exception for location will be for collateral located in “sister cities” such as East Grand Forks, Moorhead and Breckenridge.
Bank of North Dakota’s Evaluation Reports provide an unbiased, professional opinion of value. There are many uses of an evaluation report, including but not limited to, transactions that do not require an appraisal, determining the validity of existing value, problem loan administration and liquidation scenarios.
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