Is it mandatory for a guaranteed lender to obtain an appraisal of the collateral before liquidation?

A guaranteed lender is generally required to obtain an appraisal of the collateral before proceeding with liquidation. This requirement ensures that the lender has an accurate understanding of the collateral's value, which is crucial for determining the financial outcome of the liquidation process. However, there is a provision that allows for this appraisal requirement to be waived by the Farm Service Agency (FSA) under certain circumstances. This flexibility acknowledges that in some situations, conducting an appraisal might not be feasible or necessary.

The option indicating that it is mandatory unless waived provides the necessary balance between regulatory requirements and practical considerations. It emphasizes the importance of due diligence while allowing for exemptions when appropriate, demonstrating a nuanced understanding of regulatory processes in farm lending.