Does Section 202.5a apply to interim construction? I cannot find basis for exemption in the Reg or Commentary.

My bank uses the "upon request" method of delivery [202.5a(a)(2)], in that we provide the notice to the borrower of his or her right to receive a copy and the notice is provided prior to a credit decision being made.

Also, what about a construction loan to a builder? Is this covered?

Thanx for your input.

I believe it does apply as I am also aware of no exemption.

The argument (from a loan officer, of course) is that the notice must be given during the application process but no later than when the credit decision is made.....so, there is no structure to appraise.....no formal appraisal.

I argue that the Reg defines an "appraisal report" as the document relied upon by a creditor in evaluating the value of a dwelling. So, whatever value was used in order to decide whether or not to make the loan (that is......what is the value of the house going to be and does the loan request fit in the boundaries of the bank's loan policy)must be made available to the applicant upon request. Thus, the notice is required.

Any further opinions on this issue?

Preconstruction appraisals are not uncommon in my area. And somebody better have a pretty good idea of what the value of that property will be when it is done. How did they get there, what supports it?

If that material meets the definition of an appraisal, I'm with you, Shirley.

Your loan officer is out to lunch and trying to become the star of a lawsuit. The provision of the appraisal should not be predicated on clever technicalities.

The rule applies to any method or document used by the lender to evaluate the property. It is broadly inclusive and not limited to source or timing.

I'll play historian again and point out that this change to ECOA and Regulation B is the result of long, determined lobbying on the part of consumer interest groups. Lenders could only argue against it by claiming that providing the appraisal would somehow undermine the safety of the underwriting process. Congress threw out that argument.

The best rule of thumb is to provide the appraisal or other valuation whenever the customer wants it. The customer has a right to know what you took into consideration.