[Anonymous]

We give appraisal notices instead of giving a copy of the appraisal. When an application for a mortgage loan is denied the day it is received must we still give an appraisal notice? We know at that point that we are not going to order an appraisal, but the way the regulation reads sounds like we still should give it.

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[JGo9]

cbgrayson,

In looking at Reg B 202.14 here is what I found:

§ 202.14 Rules on providing appraisal reports.

(a) Providing appraisals. A creditor shall provide a copy of an appraisal report used in connection with an application for credit that is to be secured by a lien on a dwelling. A creditor shall comply with either paragraph (a)(1) or (a)(2) of this section.

(1) Routine delivery. A creditor may routinely provide a copy of an appraisal report to an applicant (whether credit is granted or denied or the application is withdrawn).

(2) Upon request. A creditor that does not routinely provide appraisal reports shall provide a copy upon an applicant’s written request.

(i) Notice. A creditor that provides appraisal reports only upon request shall notify an applicant in writing of the right to receive a copy of an appraisal report. The notice may be given at any time during the application process but no later than when the creditor provides notice of action taken under §202.9 of this regulation. The notice shall specify that the applicant’s request must be in writing, give the creditor’s mailing address, and state the time for making the request as provided in paragraph (a)(2)(ii) of this section.

If you had some kind of appraisal and turned the loan down then you would need to either give them a copy of the appraisal, a notice informing them of their right to receive an appraisal, or both (is fine to do but not necessary). It doesn’t matter of the loan is approved or denied. The regulation talks about the applicant and in 202.14(2)(i) it mentions that it can be delivered at time of application but no later than when the creditors provides notice of action taken under 202.9. 202.9 address among other things, the delivery of adverse action notices.

That being said, if you deny the loan and have yet to get an appraisal of some form then you wouldn’t have to give the notice as it wouldn’t apply without some form of appraisal.

[jholzknecht]

JGo9 provided an excellent answer, but, out of an abundance of caution, I advise that the notice be provided with the adverse action notice. It appears unneeded, since as JGo9 points out – there is no appraisal. But some examiners watch the latter of the law and the regulation states, “A creditor that provides appraisal reports only upon request shall notify an applicant in writing of the right to receive a copy of an appraisal report. The notice may be given at any time during the application process but no later than when the creditor provides notice of action taken under §202.9 of this regulation.”

[Author]

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