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Appraisals for Loans Not Originated

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  • #4048
    cnakashige
    Participant

    I am confused under the new appraisal regulations as to when an appraisal or valuation is required to be provided if the loan is not closed (denied, withdrawn, etc.). Under the commentary to Section 1002.14(a)(1)-4(v) it states the copy must be provided “promptly upon completion,” unless the applicant has waived that deadline in which case the copy must be provided no later than 30 days after the creditor determines the transaction will not be consummated. I cannot see us asking for a “waiver” if we are going to deny the loan or the applicant decides to withdraw; therefore, it appears that we would have to provide the appraisal or valuation “promptly upon completion” that means when the appraisal or valuation has been received and reviewed. Do we have to send “on the same day” that we complete the review, which seems rather harsh and ripe for violations?

    In addition, has it ever been resolved as to what the definition of “business day” means for Regulation B appraisal purposes?

    #4052
    rcooper
    Keymaster

    You are correct. If you determine that you are not going to close a loan or open a credit line, you still have to give the applicant a copy of the appraisal and other written valuations “promptly upon completion.” If the applicant has waived that deadline, you must provide copies of the appraisal and other written valuations to the applicant 30 days after you determine the transaction will not close.
    You do not have to give the appraisal the same day it is reviewed.

    The CFPB’s Small Entity Compliance Guide gives examples of what is “prompt upon completion” starting on page 17:
    https://files.consumerfinance.gov/f/201307_cfpb_updated-sticker_ecoa-implementation-guide.pdf

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