We are working with a company to perform a data scrub for us and they are commenting on the CLTV that we have been using on our commercial loans.

We have been reporting the CLTV that appears on the approval or in the credit write-up which we feel is what the credit decision is based upon. They are telling us we have errors because they are calculating the actual CLTV. The reason why this figure changes sometimes is because we will approve the credit at a 70% CLTV but once the appraisal comes in the actual CLTV might be 68.35%.

Are we correct in reporting the amount on the approval or should we be recalculating the actual CLTV?

I believe you are correct. The HMDA instructions say to report the CLTV that you "relied on in making the credit decision."

I agree with TomS. The instructions state to report the value used in making the loan decision. I report the LTV as was calculated in the loan presentation.

I'm guessing you have a similar system as we do in that your underwriters will approve the loan subject to an CLTV under 70% once an appraisal comes in. If that's not what you guys do and they actually have an appraisal when they fill out their approval, ignore the rest of this.

We report the actual CLTV in these situation because at some point, somebody came in after the appraisal was done and confirmed the LTV was in fact below 70% (i.e. 68.35). That way it matches the property value we have as well. It becomes even more obvious when the underwriter approves in subject to LTV under 80% and the actual LTV is under 50%. You can try to make the arguement that CLTV relied on is the level set by the underwriter, but your examiners will question you about it just like your auditors are.