Appraisal Notice If There Is Not An Official App?

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Question:

We do a lot of investment (rental) property financing as commercial loans. They are 1st lien, 1-4 family dwellings. We do not have an official commercial application. Trying to determine if we need to send or give the customer the Appraisal Notice, and if so, 3 days from what date since there is no application?

Answer:

The bank needs, for many reasons, to determine when it has an initial application for commercial loans. An application does not have to be written. When does the bank tell the customer what information is needed to move forward with the request? That would mean you have a request for financing, presumably have discussed potential collateral, and the bank has taken the next step of stating what is required. The bank could create a process whereby a notice of incomplete application is sent, listing the required information, and including the appraisal disclosure.

A bank needs to determine an initial application date and a complete application for other Reg B purposes as well. That is a basic step and has been needed for many years.