On what types of loans will a bank be required to provide a copy of the appraisal or other valuation to the applicant under the new Regulation B appraisal rule?  Specifically, would it apply to commercial mortgage and residential construction loans?

Under the new appraisal rule of Regulation B going into effect on January 18, 2014, the nature of the property securing the loan controls, not the nature of the loan.

Whenever credit is applied for that is to be secured by a first lien on a dwelling, the creditor must provide the applicant with a written notice of the availability of the appraisal within three business days of receiving the application. The creditor must also provide a copy of the appraisal or other valuation developed in connection with the application promptly upon completion, but not later than three business days prior to the consummation of the loan (or account opening, in the case of open-end credit). This must be done whether the credit is for a business or consumer purpose, and whether the loan is closed-end, open-end, for construction, or for temporary financing.

For the purposes of these rules, a “dwelling” is a residential structure that contains one-to-four units, whether or not the structure is attached to real property. The term includes but is not limited to, an individual condominium, a cooperative unit, and a mobile or other manufactured home. 12 CFR §1002.14(a)(1), (b).

This entry was posted on Monday, December 9th, 2013 at 2:56 pm.