You will probably think me an idiot....but can I re-rehash this.

When we take an application (subject to HMDA), the first thing we do is pull a credit report. If the credit report disqualifies the application, we go no further. We send an adverse action with reasons for denial as per the credit report. So, yes, there is a property address, yes, there is a loan amount, but there is no property value anywhere in the file. We did not ask for it, we did not obtain a tax value or anything else. Wouldn't you say that the value was not considered because we have no idea what it is.....never got that far?

I would.

Official Interpretation of 1003.4(a)(28):

4. Transactions for which no property value was relied on. Section 1003.4(a)(28) does not require a financial institution to obtain a property valuation, nor does it require a financial institution to rely on a property value in making a credit decision. If a financial institution makes a credit decision without relying on a property value, the financial institution complies with § 1003.4(a)(28) by reporting that the requirement is not applicable since no property value was relied on in making the credit decision.

FYI, I'm agreeing with RR Joker. Forgot to put that in my previous post.

But if there is.....somewhere in the file, or on the application form.....someone's statement as to the value, we should report it.....just because it's there? It would have played no part in the decision to deny.

Sorry I am so stupid.

We could require lenders to include some sort of estimated value in every file, but I think I will get push back because it will cause the lender to do some extra.

I also have the same question, Swiggles, every residential loan application we take requires a value in the collateral value field, even if just an oral estimate from the applicant, so we have to report that as Property Value if not relied upon to make a credit decision?

Just because they filled in the value on the application, doesn’t mean you relied on it. I wouldn’t report value in these cases.

What I am struggling with is, where would you draw the line? On all of our real estate applications, the value is considered a part of a complete application. It is part of the preliminary approval process. In addition, our lending policy states that LTV is a consideration in the overall credit decision process. The property value may not have been part of why the application was denied; however, if the application had been approved it would most certainly have been a factor. That keeps taking me back to thinking it would need to be reported, even if an estimate.

We look at the value on all loans, so we will be reporting all estimated values, but in general, my opinion is you would report a provided estimated value if:

1. You ever consider a value in any way for a credit decision on the program for which they are applying.
2. You ever consider an LTV in any way on the program
3. If any estimated value they provide could ever result in you denying a loan for the program (really the same thing as #1). Example: If they wanted a $100,000 loan and listed $2,000 for the property value, would it cause the loan to be denied or further questioned? If so, then when they write in a clearly acceptable value in that box, you are considering that value as part of the decision because it did not cause you to deny them.

Thank you, cgorham. I'm not off the mark then. Just when I think I have it figured out, I start to question myself again.