Thread Options
#2269178 - 04/15/22 03:48 PM Copy of Appraisal
lisawin Offline
Member
Joined: Sep 2015
Posts: 68
Mississippi
We have a business application to a contractor that builds homes. The loan will be secured by the home that is being built and will be a first lien. Is there any exemptions to the appraisal notice or sending a copy of an appraisal to the contractor? This loan is temporary.

Thank you!

Return to Top
Interagency (Reg Z) and CFPB Reg B Appraisal Rules
#2269206 - 04/16/22 12:46 PM Re: Copy of Appraisal lisawin
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
1002.14—Rules on providing appraisals and other valuations.
(a) Providing appraisals and other valuations. (1) In general. A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling.

Regulation B is not a consumer regulation and there is no temporary financing exemption.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2269271 - 04/18/22 04:33 PM Re: Copy of Appraisal lisawin
lisawin Offline
Member
Joined: Sep 2015
Posts: 68
Mississippi
That is what I thought. I am being told since these loans were approved under a guidance line of credit and they are developer loans that this rule did not apply. So I wanted to double check.

Return to Top
#2269273 - 04/18/22 04:39 PM Re: Copy of Appraisal lisawin
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,710
Bloomington, IN
1002.1

Official Interpretation
1(a) Authority and scope.
1. Scope. The Equal Credit Opportunity Act and Regulation B apply to all credit—commercial as well as personal—without regard to the nature or type of the credit or the creditor, except for an entity excluded from coverage of this part (but not the Act) by section 1029 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5519).
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2271396 - 06/08/22 08:27 PM Re: Copy of Appraisal lisawin
Margarita Offline
Member
Joined: Oct 2005
Posts: 74
Wisconsin
I was wondering if I could get clarification on the appraisal delivery requirements regarding a rental property being built. We have a commercial application from an individual for a construction loan to build an office and a residential VRBO on a lot. I know the loan being a 12 month construction loan or temporary financing (as defined in HMDA) doesn't matter, but does it matter that the residential structure will be a rental vacation home? I don't think it does because it is still a 1st lien on a residential dwelling and feel a copy of the appraisal should be provided. The commercial side is stating they disagree because it is not an individuals home. They feel because it is a transient dwelling, that the appraisal delivery rules don't apply.

Could you please confirm whether it matters if the residential dwelling being constructed is an individuals home or a rental home?

Any opinion would be greatly appreciated (especially if I am correct!).

Thank you!

Return to Top
#2271401 - 06/08/22 09:19 PM Re: Copy of Appraisal lisawin
fmissle Offline
Platinum Poster
Joined: Jul 2007
Posts: 986
Pac NW
Quote
§ 1002.14 Rules on providing appraisals and other valuations.

(a) Providing appraisals and other valuations -

(1) In general. A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling.

Quote
Definitions. For purposes of paragraph (a) of this section:

......

(2) Dwelling. The term “dwelling” means a residential structure that contains one to four units whether or not that structure is attached to real property. The term includes, but is not limited to, an individual condominium or cooperative unit, and a mobile or other manufactured home.

My question would be: In what way is this rental home not a dwelling? Also, why are your commercial lenders arguing so hard against what is such a simple regulation to comply with?

Return to Top
#2271402 - 06/08/22 09:24 PM Re: Copy of Appraisal lisawin
fmissle Offline
Platinum Poster
Joined: Jul 2007
Posts: 986
Pac NW
Tried to edit, but I mean my questions would be to the commercial department, who is arguing against this.

Return to Top
#2271403 - 06/08/22 09:32 PM Re: Copy of Appraisal lisawin
Margarita Offline
Member
Joined: Oct 2005
Posts: 74
Wisconsin
I totally agree with you and told them they must provide a copy. I was just looking for confirmation in my thinking that the purpose of the residential dwelling does not matter. Started second guessing...............

Thank you for your reply.

Return to Top
#2271406 - 06/08/22 09:43 PM Re: Copy of Appraisal fmissle
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,593
Cape Cod
Originally Posted by fmissle
Tried to edit, but I mean my questions would be to the commercial department, who is arguing against this.
I think I managed to make that edit for you, fmissle.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2271454 - 06/09/22 05:40 PM Re: Copy of Appraisal lisawin
fmissle Offline
Platinum Poster
Joined: Jul 2007
Posts: 986
Pac NW
Thanks John!

Return to Top