I know there are differing opinions on whether you still have to provide the right to receive a copy of the appraisal notice if you know you aren't going to order a new appraisal (or evaluation) for a transaction. I'm curious to see who is doing it which way and if anyone has found anything "concrete" that specifies one way or the other.

Thanks!

I don't know of anything that allows for not giving it, even with knowledge.

ETA: See below...strike this one up to brain freeze.

That's been my opinion but I have seen John Burnett opine otherwise, as well as a mortgage newsletter I recently came across.

Reg B Commentary:

14(a)(1) In general.

1. Coverage. Section 1002.14 covers applications for credit to be secured by a first lien on a dwelling, as that term is defined in § 1002.14(b)(2), whether the credit is for a business purpose (for example, a loan to start a business) or a consumer purpose (for example, a loan to purchase a home).

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.

I guess I don't want to leave that 'decision' up to lending staff...consistency generally rules around here!

Okay, well, yes, if 14(a)(1) doesn't apply, then you would not have to comply with:

(2) Disclosure. For applications subject to paragraph (a)(1) of this section, a creditor shall mail or deliver to an applicant, not later than the third business day after the creditor receives an application for credit that is to be secured by a first lien on a dwelling, a notice in writing of the applicant's right to receive a copy of all written appraisals developed in connection with the application. In the case of an application for credit that is not to be secured by a first lien on a dwelling at the time of application, if the creditor later determines the credit will be secured by a first lien on a dwelling, the creditor shall mail or deliver the same notice in writing not later than the third business day after the creditor determines that the loan is to be secured by a first lien on a dwelling.

Right. They do not require you to provide a copy of an appraisal or other value already provided on a prior loan (assuming reuse).

Right...but they were asking about the disclosure, not the appraisal.

So, Kaybee, would you say this "exemption" would only apply to a straight renewal of a loan and not to a refinance (that is still a 1st lien but maybe included more cash out)?

I'm not Kaybee, but....if you are renewing and will not develop a new written valuation report, you don't owe them the report (per 14.a.1) and therefore don't owe them a disclosure (per 14.a.2)

The question becomes are you SURE you won't order a new evaluation or appraisal. And are you sure you want your lending staff making the call. Or is it better to have a procedure that says we give the disclosure on all first liens on dwellings. And then we have a procedure that says we deliver the report if we get one.

I think that may have been the intention of the poll....we don't HAVE to give the disclosure, but how many of us are doing it anyway.

Sorry, raiders, your poll! You know your intent better than I.

I agree. If you want to give the disclosure out 100% of the time, to eliminate decisions, that is fine. The model notice does not say "we will order an appraisal" it says "we may".

"Form C-9—Sample Disclosure of Right to Receive a Copy of Appraisals.

We may order an appraisal to determine the property's value and charge you for this appraisal. We will promptly give you a copy of any appraisal, even if your loan does not close.

You can pay for an additional appraisal for your own use at your own cost."

Even with the old notice, many banks in areas like small business lending handed out the disclosure 100% of the time.

But, if you absolutely know you will use the existing appraisal, you do not have to give the notice. I responded to a statement above that there was no decision allowed. The regulation does allow a decision. Process wise, it is likely easier to just give the disclosure since it says "may".

Thanks for the responses, everyone. I would like to keep the poll going to get more responses on how this is being handled at other banks.

I'm gonna bump this poll up one more time then put this puppy to rest! Thanks for the responses!

KISS is my motto.
Simple = all the time based on the use of the word 'may'.