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#2214444 - 05/28/19 07:02 PM Construction - Project Cost
deltacrcm Offline
100 Club
Joined: Apr 2015
Posts: 217
For our construction loans, we have been relying on estimated project cost for our loan to value calculation for credit approval. Thus, the officers have disclosed 'estimated property value' on the CD, even if there was an appraisal ordered. A recent external audit revealed that they (the hired auditors) interpret the commentary in 1026.38(a)(3)(vii) to say that if we order an appraisal we must disclose 'appraised value', while management is focusing on the part that states 'the creditor discloses the value determined by the appraisal or valuation [/i]used to determine approval of the credit transaction[i]. I can see how the regulation could be interpreted either way, I'm just wondering if anyone has had this come up with examiners and been given any guidance.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2214445 - 05/28/19 07:06 PM Re: Construction - Project Cost deltacrcm
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,294
Galveston, TX
For transactions involving construction where there is no seller, the creditor must disclose the value of the property that is used to determine the approval of the credit transaction, including improvements to be made on the property if those improvements are used in determining the approval of the credit transaction.

Find new auditors.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2214451 - 05/28/19 08:06 PM Re: Construction - Project Cost deltacrcm
deltacrcm Offline
100 Club
Joined: Apr 2015
Posts: 217
That is how I interpreted it as well, thanks!

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