Thread Options
#2254515 - 05/27/21 04:53 PM Reg B Appraisal Copy
JustKeepSwimming Offline
Junior Member
Joined: Jun 2015
Posts: 31
Midwest
We have a situation where an appraiser went to inspect a property and came back to us with comments and pictures related to C5 condition property with extreme conditions making the property unsuitable for a mortgage. Basically the appraiser is asking if he should continue with the preparation of a full appraisal or not. The decision was made not to move forward, and the appraiser charged a partial fee and the rest was refunded the applicant that had paid an upfront payment after giving his intent to proceed.

My question is related to Reg B's requirement to provide the borrower with a copy of the appraisal. We don't have one obviously, but we are denying for unacceptable collateral. Is this a problem? Should we have moved forward with the appraisal to have one to provide to the borrower?

Return to Top
Lending Compliance
#2254517 - 05/27/21 04:56 PM Re: Reg B Appraisal Copy JustKeepSwimming
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,207
Galveston, TX
You can't provide something that you do not have and there is no requirement to do an appraisal on a loan that is being denied.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2254520 - 05/27/21 05:03 PM Re: Reg B Appraisal Copy JustKeepSwimming
JustKeepSwimming Offline
Junior Member
Joined: Jun 2015
Posts: 31
Midwest
Thanks, Randy. I was worried since we have appraiser comments and photos in the file, but no actual report.

Return to Top
#2254522 - 05/27/21 05:20 PM Re: Reg B Appraisal Copy JustKeepSwimming
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,957
TN
Make sure you document the file accordingly.
_________________________
My Opinions Only

Return to Top
#2254729 - 06/01/21 08:24 PM Re: Reg B Appraisal Copy JustKeepSwimming
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,333
Cape Cod
Without a statement of value, you don't have an appraisal. The appraiser did the bank -- and the applicant -- a favor by cutting it short and issuing the report using the language you described.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2254737 - 06/02/21 01:47 AM Re: Reg B Appraisal Copy JustKeepSwimming
InFairness, CRCM Offline
Platinum Poster
InFairness, CRCM
Joined: Nov 2010
Posts: 561
USA
Just a couple of thoughts:
  • How do you justify denying for collateral without a valuation?
  • Reg. B is broader than appraisals, as it covers all written valuations
  • For purposes of §1002.14, an “appraisal or other written valuation” includes, without limitation, an appraisal or other valuation received or developed by the creditor in paper form (hard copy); electronically, such as CD or email; or by any other similar media. Does what the appraiser provided rise to the level of a valuation?
  • What did the applicant receive for the portion of the fee retained by the appraiser?


I don't know if what you received rises to the level of a valuation, but it does appear the borrower paid for something that they did not receive.
_________________________
Opinions are strictly my own, and have nothing to do with my employer.

Return to Top
#2254748 - 06/02/21 03:34 PM Re: Reg B Appraisal Copy JustKeepSwimming
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,207
Galveston, TX
IMHO - The appraiser communicating a C-5 condition is not a valuation.

It is a condition report: Some significant repairs are needed to the improvements due to the lack of adequate maintenance. It reflects a property in which many of its short-lived building components are at the end of or have exceeded their physical life expectancy, but remain functional.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  Andy_Z