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#2065548 - 02/23/16 05:30 PM Valuation under Regulation B
JC (Darth HMDA) Offline
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JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
Hello Everyone,

I have a question regarding the Appraisal Availability Requirements under Regulation B. I am trying to determine if internal evaluations of property prices using Comps from the MLS and Title Property Profiles are considered a "valuation" under Reg. B.

Under the examples of valuations (Comment 14(b)(3)-1), "A document prepared by the creditor's staff that assigns value to the property" is considered a valuation.

Under the examples of items not considered valuations are "Publicly available lists of valuations (such as published sales prices or mortgage amounts, tax assessments and retail price ranges".

So... when I ask the department's management for clarification on what they are using for a valuation, the response is "We get comps from various sources such as a title company profile".

Now, when I think of internal evaluations, I am thinking of an internal valuation produced within our appraisal department which is a formal written document attesting to the Bank's estimated value of the property. I do not believe using outside sources and compiling this information in emails constitutes a valuation under the reg but I wanted to hear other's opinion on the matter. Perhaps I am being way too cautious/paranoid.

We are not using these internal emails/comps as the actual valuation, but I came across a file where the department made an internal estimate of the value and told the applicant that the property would likely not come in anywhere near the amount needed to make the loan work. I think it was in the consumer's best interest to not request hundreds of dollars for an appraisal when we did not think the value was anywhere near what was needed... but at that point is it just an estimate or a valuation?

Thank you to everyone as always for opining.

Appreciate it!
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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#2065567 - 02/23/16 06:16 PM Re: Valuation under Regulation B JC (Darth HMDA)
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Did they deny the loan for insufficient type or value of collateral (seems obvious)? If so, I'd say they owe them a copy of how they made that determination.
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#2065580 - 02/23/16 06:57 PM Re: Valuation under Regulation B JC (Darth HMDA)
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
You need to go back to the appraisal and evaluation guidelines. If you are not performing an evaluation, why are you getting comps? E-mails are not going to cut it from a safety and soundness perspective.

This is like someone says they are slightly pregnant. You either are or you are not.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2065641 - 02/23/16 09:34 PM Re: Valuation under Regulation B JC (Darth HMDA)
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
These are the guidelines given us by our EIC.

If you are actually assigning a value to the property then your evaluation is an appraisal.

If you are simply restating a value from tax records or a previous appraisal as examples then your evaluation would not be an appraisal.

And I have to agree with Randy, as a rule emails discussing the value would not meet the evaluation requirements under the Interagency Appraisal and Evaluation Guidelines.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2065684 - 02/23/16 11:54 PM Re: Valuation under Regulation B JC (Darth HMDA)
JC (Darth HMDA) Offline
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JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
Thank you everyone! Appreciate the help as always.

Randy... I am totally stealing the slightly pregnant line in future training sessions smile hahaha
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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#2083995 - 06/17/16 05:06 PM Re: Valuation under Regulation B JC (Darth HMDA)
JG Offline
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Joined: Dec 2015
Posts: 11
All,
I am seeking opinion and further clarification on this topic and appreciate your insight.

When using a tax assessed value (TAV) does the act of doing an internal review looking at other available data to support the tax assessed value make it an appraisal under the rule if we end up using the TAV?

In cases where a TAV is considered reliable after conducting some internal review of market data it, TAV, will be used to support the UW decision. There are times where market data would suggest the TAV may be high or low and an adjustment is made. In these cases, I believe we have assigned a value under the rule and it becomes a valuation subject to Reg B.

I am grateful for your responses.

Thanks.
J

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#2084063 - 06/17/16 07:02 PM Re: Valuation under Regulation B JC (Darth HMDA)
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
There are times where market data would suggest the TAV may be high or low and an adjustment is made. In these cases, I believe we have assigned a value under the rule and it becomes a valuation subject to Reg B.

I agree.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2084074 - 06/17/16 07:28 PM Re: Valuation under Regulation B JC (Darth HMDA)
JG Offline
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Joined: Dec 2015
Posts: 11
Thank you Dan. Would you also agree if the TAV is deemed to be reliable based on our additional review of other market data it is not a "valuation" under Reg B?

J

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#2084076 - 06/17/16 07:32 PM Re: Valuation under Regulation B JC (Darth HMDA)
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Go back up 3 or 4 posts and read my reply from 2/23/16 post #2065641.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2084087 - 06/17/16 07:51 PM Re: Valuation under Regulation B JC (Darth HMDA)
JG Offline
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Joined: Dec 2015
Posts: 11
Thanks again Dan.

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