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#2233268 - 03/18/20 08:59 PM ECOA Appraisal rule for Debt Modification
Likes to Comply Offline
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Joined: Nov 2008
Posts: 1,062
In the mountains
A commercial dwelling secured loan changing the rate and extending out the maturity via a debt modification. The appraisal obtained three years ago at the origination of the loan was re-validated by our on staff appraiser. Must a copy of the re-validation be given three days in advance of consummation of the debt modification?
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Lending Compliance
#2233281 - 03/19/20 11:47 AM Re: ECOA Appraisal rule for Debt Modification Likes to Comply
Adam Witmer Offline
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Joined: Sep 2010
Posts: 2,643
Great question as this can be quite confusing. In short, the answer is yes. The re-validation is new and the customer has not yet received a copy, so they should be provided with one. The preamble to the final rule talks about this in a round about way, but here is what the commentary says:

2. Renewals. Section 1002.14(a)(1) applies when an applicant requests the renewal of an existing extension of credit and the creditor develops a new appraisal or other written valuation. Section 1002.14(a)(1) does not apply to the extent a creditor uses the appraisals and other written valuations that were previously developed in connection with the prior extension of credit to evaluate the renewal request.
Adam Witmer, CRCM

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

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