For clarification of the regulation on the Closing Disclosure?
Appraisal report- Appraised value
Evaluation performed by a certified appraiser meets appraisal guidelinesâ€“ estimated property value
If we have a refinance or home equity loan and the borrower purchased the property less than a year ago we would use the purchase price or the appraisal value, whichever is less. If we use the purchase price in our LTV approval do we disclose purchase price as estimated property value?
8(a)(3)(vii) Sale price.
1. No seller. In transactions where there is no seller, such as in a refinancing, Â§ 1026.38(a)(3)(vii)(B) requires the creditor to disclose the appraised value of the property. To comply with this requirement, the creditor discloses the value determined by the appraisal or valuation used to determine approval of the credit transaction. If the creditor has not obtained an appraisal, the creditor may disclose the estimated value of the property. Where an estimate is disclosed, rather than an appraisal, the label for the disclosure is changed to â€œEstimated Prop. Value.â€ The creditor may use the estimate provided by the consumer at application but, if it has performed its own estimate of the property value for purposes of approving the credit transaction by the time the disclosure is provided to the consumer, the creditor must disclose the estimate it used for purposes of approving the credit transaction. 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.