Lenders are arguing that they should NOT have to provide a copy of the appraisal because the customer didn't pay for it. I'm pointing to 1002.14(a) which states "A creditor shall provide a copy of an appraisal report used in connection with an application for credit that is to be secured by a lien on a dwelling."

Am I wrong in my thinking?

Just a little bit further in the reg - from the Commentary

14(a)(2)(ii) Delivery.

1. Reimbursement. Creditors may charge for photocopy and postage costs incurred in providing a copy of the appraisal report, unless prohibited by state or other law. If the consumer has already paid for the report—for example, as part of an application fee—the creditor may not require additional fees for the appraisal (other than photocopy and postage costs).

I guess we should revisit when we are collecting the appraisal fee on these consumer loans given the fact we can't require the borrower to pay for the appraisal before we give them a copy. Thanks for your help!

If they haven't paid for the report...you can require them to.


ETA: I would imagine with the changes coming down the pipes, this may go away (mandantory delivery 3 days prior to closing.)

given the fact we can't require the borrower to pay for the appraisal before we give them a copy

Where are you getting this information? Under current regulation you most definitely can require reimbursement for the cost of the appraisal before providing a copy to the applicant.

GF, don't confuse not charging with "you cannot charge until they have the GFE".

RESPA says
(4) The lender is not permitted to charge, as a condition for providing a GFE, any fee for an appraisal, inspection, or other similar settlement service. The lender may, at its option, charge a fee limited to the cost of a credit report. The lender may not charge additional fees until after the applicant has received the GFE and indicated an intention to proceed with the loan covered by that GFE. If the GFE is mailed to the applicant, the applicant is considered to have received the GFE 3 calendar days after it is mailed, not including Sundays and the legal public holidays specified in 5 U.S.C. 6103(a).

Give them the GFE, then tell them in order to proceed, you need to give us $XXX. so the bank can order the appraisal.