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#970 - 03/17/01 05:22 AM Reg B

Does the appraisal requirement under Reg.B apply to mixed use properties? A storefront with 2 residential apartments above?

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General Discussion
#971 - 03/18/01 12:27 AM Re: Reg B
A D Virr Offline
Gold Star
Joined: Oct 2000
Posts: 398
Derry, NH
It would appear that it does apply. Reg B 202.5(a)covers applications for credit involving a lien on a dwelling - .5(c) defines residential structure 1-4 family. The real answer I think is the Staff Commentary in 202.5(a(1) includes a business purpose in the requirement to provide a copy of the appraisal.

That is my opinion - I would be interested in other's viewpoints.

Allan D. Virr, CRCM,CRP
Compliance Audit Solutions, LLC

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#972 - 03/19/01 02:29 AM Re: Reg B
Lucy Griffin Offline

Diamond Poster
Lucy Griffin
Joined: Nov 2000
Posts: 1,544
Yes. There is no exception for business loans under ECOA. The test for the appraisal rule is whether a dwelling secures the loan. Commercial lenders are always looking for a way out of compliance requirements. But there is virtually no mercy in ECOA (and none whatsoever in Flood.) The appraisal requirement is the result of years of lobbying by various interests. Any lender should assume that if there is a dwelling, no matter what else is involved, the requirement is triggered.

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