I received a question from our CCO regarding the new appraisal rules with Regulation B. We update values of property on existing loans, either by 3rd party appraisal or internal valuation prior to a change-in-terms or renewal of an existing loan. Do we need to provide a copy of that appraisal or provide a notice that a new valuation is being performed?
If you order a new appraisal or valuation for a renewal then you need to give a copy of that appraisal/valuation.
The commentary to the revised 1002.14(a)(1) states: 2. Renewals. Section 1002.14(a)(1) applies when an applicant requests the renewal of an existing extension of credit and the creditor develops a new appraisal or other written valuation. Section 1002.14(a)(1) does not apply to the extent a creditor uses the appraisals and other written valuations that were previously developed in connection with the prior extension of credit to evaluate the renewal request.
If you’d like to take a closer look, Regulation B and the commentary can be accessed here: https://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=8bc1ebae1cf15ad0ac732c3515a23b17&rgn=div5&view=text&node=12:126.96.36.199.1&idno=12