If a financial institution obtained an evaluation that was unacceptable, so an appraisal was obtained which was then used to underwrite the loan, does Reg B require they both be disclosed? If yes, that could be confusing to the borrower.

The evaluation was never completed, as it was never accepted by the financial institution.

iii. "Completion" occurs when the last version is received by the creditor, or when the creditor has reviewed and accepted the appraisal or other written valuation to include any changes or corrections required, whichever is later.

If you have to pay for both appraisals even if you didn't accept the first one, don't try to parlay this situation in a changed circumstance that might allow you to charge the consumer for both appraisals. You should have a performance requirement in your agreement with the appraiser.

First of all, this is not a mortgage loan but rather a HELOC. I started this thread due to a recent audit finding citing us for not providing the initial evaluation (AVM), which I agree is not "complete", since it wasn't accepted by us. However, the citing below from the commentary indicates we should have sent the AVM even though it was unacceptable (incomplete). Is "completion" referring to revisions to the same appraisal? I really don't want to provide the AVM since it wasn't used to underwrite the loan.

14(a)(I)-5

v. Delay in sending an AVM report while waiting for completion of a second valuation. The creditor receives an AVM report on day 5 after application and completes its review of the AVM report the day it is received. The creditor also has ordered an appraisal, but the initial version of the appraisal received by the creditor is found to be deficient and is sent for review. The creditor waits 30 days to provide a copy of the completed AVM report, until the appraisal is completed on day 35. The creditor then provides the applicant with copies of the AVM report and the revised appraisal. While the appraisal report was provided promptly upon completion, the AVM report was not.

That the loan is a HELOC is irrelevant if it's a first-lien HELOC.

It is an interest question however. If an AVM or an appraisal is not actually accepted by the bank, is there any delivery requirement? I would say not, as it doesn't meet the definition of "completed"..

It's a second lien, so we got out of this one. However, I need to clarify what is a "complete" valuation at my bank, specifically an AVM.

Thanks so much for your opinions.