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We are working through the process of revising our policies and procedures to implement this rule in January. During our last project meeting, we came across this question that we can’t seem to agree upon. We are using the tools on the CFPB website, such as the Small Entity Compliance Guide, the Consumer Summary, the rule itself and the Official Interpretations. Even so, at times the information appears to contradict.
In reference to Section 1002.14, it says: “A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. A creditor shall provide a copy of each such appraisal or other written valuation promptly upon completion…
In a situation where an Home Value Estimator (HVE) is ordered and isn’t “reviewed and accepted” by the underwriter (because of various reasons, such as the confidence score is either medium or low, there are no comparable sales data or not enough comparable sales data, etc.), we have two other HVE types we can order. Sometimes these HVEs come back with usable data and sometimes they don’t, in which case an appraisal is then ordered. In all HVE cases, we also prepare an internal “Loan Evaluation with Photos” to assess the condition of the property.
Our question is this:
1. Do we have to send the HVEs that we didn’t use to the customer? If you read it one way, I would say yes – we have to send copies of ALL appraisals or valuations. But on the other hand, I would say no – the underwriter didn’t “accept” the unused valuations. Something was wrong with it and it didn’t provide us with an adequate value. In other words, it wasn’t a “complete” valuation and we only have to send “complete” valuations to the customer.
2. Do we have to send the internal “Loan Evaluation with Photos” to the customer? It doesn’t contain any valuation of the property – it just assesses the condition of the property via pictures, basically to ensure that the data contained in the HVE is reasonable.Thank you in advance for your time and assistance,
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