Appraisal Notification for Residentially Secured Business Loans>

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Question:

On the Good Faith Estimate and the HUD1 Settlement Statement, what is the appropriate line for property taxes paid outside of closing and flood determination fees (we use two lines for this)? Also, is the right to receive a copy of the appraisal notices required on business purpose loans secured by residential property, such as loans to builders?

Answer:

On GFEs and HUD1s, you can use any open line in the same section to provide additional information. For flood determination fees, you can split basic from life of loan, using an open line in the 800s for the basic and a line in the 800s or the 1300s for life of loan coverage.

For your second question, the right to receive a copy of the appraisal (or property valuation) on a dwelling secured loan is not limited to consumer lending. The rule also applies to commercial loans. Thus, an appraisal on an appartment building should be given to the commercial borrower.

However, that additional amount advanced does trigger rescission as to the new amount. This is contained in 226.23(f) of Regulation Z.

First published on BankersOnline.com 2/11/02