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Appraisal timing and fair lending

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Question: 
If a financial institutions normal process for commercial property loans is to start appraisal bids/engagements post-decision, can there be fair lending violations for starting appraisal bids/engagements pre-decision for customers based on length of relationship with the financial institution, credit exposure with the financial institution, etc?
Answer: 

Anytime you treat one customer different from another customer there is fair lending risk. It all comes down to does doing so represent disparate treatment and can you justify it through a "business necessity". Only an analysis of which customers are getting favorable treatment versus which customers are not can answer this question.

First published on 10/20/2024

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