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#2090001 - 07/26/16 06:51 PM Line of Credit
Tracey, CRCM Offline
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Joined: Jul 2015
Posts: 542
Gorham, ME
Can someone clarify for me- if we are doing a line of credit (commercial customer) secured by a dwelling, under the following, we still have to provide the appraisal within 3 days of closing or they can waive and we can provide the appraisal at closing, correct? I have a commercial lender that is interpreting this to mean that there is no 3 day requirement.

1002.14—Rules on providing appraisals and other valuations.
(a) Providing appraisals and other valuations. (1) In general. A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. A creditor shall provide a copy of each such appraisal or other written valuation promptly upon completion, or three business days prior to consummation of the transaction (for closed-end credit) or account opening (for open-end credit), whichever is earlier. An applicant may waive the timing requirement in this paragraph (a)(1) and agree to receive any copy at or before consummation or account opening, except where otherwise prohibited by law.
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Interagency (Reg Z) and CFPB Reg B Appraisal Rules
#2090007 - 07/26/16 07:00 PM Re: Line of Credit Tracey, CRCM
Adam F Offline
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Adam F
Joined: Apr 2013
Posts: 420
VA
Keep reading 1002.14(a)(1)

"(a) Providing appraisals and other valuations. (1) In general. A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. A creditor shall provide a copy of each such appraisal or other written valuation promptly upon completion, or three business days prior to consummation of the transaction (for closed-end credit) or account opening (for open-end credit), whichever is earlier. An applicant may waive the timing requirement in this paragraph (a)(1) and agree to receive any copy at or before consummation or account opening, except where otherwise prohibited by law. Any such waiver must be obtained at least three business days prior to consummation or account opening, unless the waiver pertains solely to the applicant's receipt of a copy of an appraisal or other written valuation that contains only clerical changes from a previous version of the appraisal or other written valuation provided to the applicant three or more business days prior to consummation or account opening. If the applicant provides a waiver and the transaction is not consummated or the account is not opened, the creditor must provide these copies no later than 30 days after the creditor determines consummation will not occur or the account will not be opened."
Last edited by NSF; 07/26/16 07:02 PM.
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#2090010 - 07/26/16 07:06 PM Re: Line of Credit Tracey, CRCM
Tracey, CRCM Offline
Platinum Poster
Joined: Jul 2015
Posts: 542
Gorham, ME
Correct. The lender is thinking that because it is an open-ended line of credit, Reg. B doesn't apply. I am saying, yes it does, we did a new valuation on the dwelling that is our collateral, we have to provide them a copy of it 3 days before closing or obtain a waiver 3 days prior to closing.
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#2090013 - 07/26/16 07:12 PM Re: Line of Credit Tracey, CRCM
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
Based on lien status, not product type. First lien, you abide by the rule and timeframes.

1002.14(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).
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#2090019 - 07/26/16 07:28 PM Re: Line of Credit #Just Jay
Adam F Offline
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Adam F
Joined: Apr 2013
Posts: 420
VA
Agreed. I actually had to walk a commercial loan officer through this requirement yesterday.
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It is better to act cautiously beforehand than to suffer afterward.

The answers I give are my opinions. Not legal advice.

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#2090020 - 07/26/16 07:29 PM Re: Line of Credit Tracey, CRCM
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
"The lender is thinking that because it is an open-ended line of credit, Reg. B doesn't apply."

I suppose they think that they can discriminate on a prohibited basis on open-end lines also, since after all, Reg. B doesn't apply to open-end credit smile
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