New Application - No Appraisal

We have a new application from a customer who previously applied (3 months ago) but credit was denied. An appraisal report was obtained in connection with that application and a copy was promptly delivered to the applicant.

Now, the issue that caused the first application to be declined has been cleared up and customer has made a new application. Since the appraisal report obtained in connection with the first application is about 3 months old, we will not be obtaining a new appraisal in connection with his current application nor will we be obtainng a recertification or update from the appraiser or conduct our own evaluation.

My question is whether we are required to provide a copy of the same appraisal report (from the first application). We did deliver the Notice of Appraisal timely. I don't think we are required to provide a copy of the appraisal report since we have not developed or obtained an appraisal in connection with the current request for credit.

Any comment is appreciated.

In my opinion it is a "new request" and you would provide the notice and appraisal copy again for each "new request.". It seems redundant, however I don't think you would be amiss doing that. Key is new request, new disclosures even if you use the same appraisal that appraisal now applies to the new request.

I don't think you have to deliver it in this instance due to the fact that Reg B talks about appraisals "developed" in conjunction with the request (emphasis mine):

1002.14(a)(1) 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.

The disclosure requirement also references the "developed" feature:

1022.14(a)(2) Disclosure. For applications subject to paragraph (a)(1) of this section, a creditor shall mail or deliver to an applicant, not later than the third business day after the creditor receives an application for credit that is to be secured by a first lien on a dwelling, a notice in writing of the applicant's right to receive a copy of all written appraisals developed in connection with the application.

You met the requirements with the first application (the one the appraisal was developed for.) I do not think you have to repeat them if no new appraisal or evaluation is being developed.

Jen J is correct. The appraisal was not developed in conjunction with the current application so another copy does not need to be provided.

we will not be obtaining a new appraisal in connection with his current application nor will we be obtainng a recertification or update from the appraiser or conduct our own evaluation.

You have to validate the existing appraisal is still valid. With the appraisal only being 3 months old that should be relative simple but IMO you still need to document its validity.

XIV. Validity of Appraisals and Evaluations
The Agencies allow an institution to use an existing appraisal or evaluation to support a subsequent transaction in certain circumstances. Therefore, an institution should establish criteria for assessing whether an existing appraisal or evaluation continues to reflect the market value of the property (that is, remains valid). Such criteria will vary depending upon the condition of the property and the marketplace, and the nature of the transaction. The documentation in the credit file should provide the facts and analysis to support the institution’s conclusion that the existing appraisal or evaluation may be used in the subsequent transaction. A new appraisal or evaluation is necessary if the originally reported market value has changed due to factors such as:

Agreed! Thanks for that reminder, Dan. With appraisals it's always good to remember there are at least two (possibly three, if the loan is HPML) sets of rules at play.