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When we receive an application for a new loan and we know at that time we will be using an existing appraisal that has already been provided to the borrower, are we still required to provide the ECOA appraisal notice?
The Commentary to Regulation B states, “Section 1002.14(a)(1) applies when an applicant requests the renewal of an existing extension of credit and the creditor develops a new appraisal or other written valuation. Section 1002.14(a)(1) does not apply to the extent a creditor uses the appraisals and other written valuations that were previously developed in connection with the prior extension of credit to evaluate the renewal request.” You define your transaction as a new loan, not as a renewal. While the Comment does not address a new loan, we suspect that reusing an existing appraisal would not trigger the Regulation B disclosure requirement. The borrower already received a copy of the appraisal in the original transaction. Be sure to check the interagency appraisal guidelines. Also the requirements of Regulation Z, Section 1026.35(c)(3), do not allow reuse of an existing appraisal for a higher priced mortgage loan.
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