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Appraisal Notice On New Request?

Question: 
Do we need to send an Appraisal Notice on a new request if we are using an existing appraisal we already have for a separate loan?
Answer: 

by Randy Carey:

There is an exemption for a renewal, but there is no mention of an exemption for an additional loan secured by the same property. If you already have one loan on the property, another loan on the property would not be a 1st lien.

14(a)(1) In general.

2. Renewals. Section 1002.14(a)(1) applies when an applicant requests the renewal of an existing extension of credit and the creditor develops a new appraisal or other written valuation. Section 1002.14(a)(1) does not apply to the extent a creditor uses the appraisals and other written valuations that were previously developed in connection with the prior extension of credit to evaluate the renewal request.

Answer: 

by John Burnett:

Randy's pointed out that a junior-lien loan on a dwelling isn't subject to the Regulation B appraisal copy rule, and therefore, not subject to that rule's requirement for the notice.

However, if the loan is a Higher Priced Mortgage Loan (HPML) subject to the appraisal requirements in Regulation Z section 1026.35(c), section 1026.35(c)(5) requires a disclosure by the third business day after receipt of the application, or, if determination that the application is for an HPML is made later, by the third business day after that determination. A junior-lien loan secured by a consumer's principal dwelling can be an HPML subject to this requirement.

First published on 04/07/2019

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