The following scenarios were received by email
(1) A consumer submits an application for home improvement, offering her son’s mobile home, which is situated on her property, as collateral. An hour after she leaves the bank, she calls the Loan Officer to withdraw the application. Are we still bound by Reg B to provide an appraisal/valuation? Answer: Regulation B does not require you to obtain an appraisal; it requires you to provide a copy of any appraisal/evaluation developed in connection with an application. Since no appraisal was developed in connection with the application, nothing is required.
(2) A consumer submits a consumer-purpose application, offering two mobile homes as collateral. We are denying the loan because of a poor credit record with others. The titles of both mobile homes show another financial institution as first lienholder. Are we still bound by Regulation B to provide an appraisal/valuation, or would our second-lien status exempt us? Answer: Regulation B applies only to first lien situations. If you deny the loan before the appraisal/evaluation is developed you would be doubly exempt.