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Reg B Appraisal Notice Requirements
by Andy Zavoina, BOL Guru

Question: This questions is in reference to Reg B, more specifically about the appraisal notice or ALWAYS providing the customer with a copy of the appraisal. This is the situation: A corporation is borrowing money for business purposes, the two officers of the corp will guarantee the loan and are also putting up each of their primary residence as collateral. Is the notice of a right to the appraisal required to be given to the guarantors? Our mortgage dept. says no, it is a business loan and no "disclosure" is required.

Answer: While they are correct, it is not because it is a commercial loan. Remember parts of Reg. B apply to commercial entities.

Guarantors are defined separately under Reg. B and are subject to signatory requirements but not other parts. The section in "B" requiring appraisal disclosures is specific to "applicants". A guarantor is not an applicant. If they are not applicants, they need not be given an appraisal.

First published on 09/2/02

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