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#2223036 - 10/04/19 02:27 PM Does this valuation need to be sent?
mmason Offline
Gold Star
Joined: Nov 2001
Posts: 447
New England
1002.14 A creditor shall provide a copy of each such appraisal or other written valuation promptly upon completion...

We started using EVMs in limited situations last year. Our process is to pull the valuation, have an inspection is done to support the value, then have both reports reviewed and accepted. We just had our first case where we received the initial report then the customer withdrew so we cancelled the inspection. The initial report was never reviewed and accepted by our appraisal reviewer. Does that initial valuation need to be sent to the customer? I'm leaning toward no because it was not completed.

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Interagency (Reg Z) and CFPB Reg B Appraisal Rules
#2223051 - 10/04/19 03:30 PM Re: Does this valuation need to be sent? mmason
Kimo in Idaho Offline
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Joined: Jun 2019
Posts: 135
As I would read it if the EVM (or anything else provides a value) it would need to be provided regardless of other processes that you might use. The commentary in particular references attachments or exhibits, and appears to be very expansive in what is covered. I wouldn't mess with it, and wouldn't want to have to debate how anything that provides a value isn't covered.



(3) Valuation. The term "valuation" means any estimate of the value of a dwelling developed in connection with an application for credit.

14(b)(3) Valuation.

1. Valuations—examples. Examples of valuations include but are not limited to:

i. A report prepared by an appraiser (whether or not licensed or certified) including the appraiser's estimate of the property's value or opinion of value.

ii. A document prepared by the creditor's staff that assigns value to the property.

iii. A report approved by a government-sponsored enterprise for describing to the applicant the estimate of the property's value developed pursuant to the proprietary methodology or mechanism of the government-sponsored enterprise.

iv. A report generated by use of an automated valuation model to estimate the property's value.

v. A broker price opinion prepared by a real estate broker, agent, or sales person to estimate the property's value.

2. Attachments and exhibits. The term "valuation" includes any attachments and exhibits that are an integrated part of the valuation.

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#2223055 - 10/04/19 03:53 PM Re: Does this valuation need to be sent? mmason
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
I agree with Kimo. In fact, the preamble to the final rule says this:

"Consistent with the purpose of ECOA section 701(e) and ECOA more broadly, if an AVM develops a valuation in connection with the application that is provided to the creditor, then the creditor has a duty under the final rule to disclose a copy to the applicant."

While you might be able to debate whether the valuation is "complete," I wouldn't want to have that argument with an examiner if I could avoid it.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

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