Scenario: new $50,000 loan request, secured by a second lien on an apartment building (behind our first lien). Existing note amount is over $900,000. Original appraisal was dated 5/15/15 and valued property at $1,221,000.
Do we have to get a new appraisal, or would it be appropriate/legal to send and engagement letter to the original appraiser and have him recertify the value and show that the value has not changed on the property?
You can use an old appraisal, you just have to validate it. Sending it to the appraiser to re-certify is certainly acceptable.
XIV. Validity of Appraisals and Evaluations
The Agencies allow an institution to use an existing appraisal or evaluation to support a subsequent transaction in certain circumstances. Therefore, an institution should establish criteria for assessing whether an existing appraisal or evaluation continues to reflect the market value of the property (that is, remains valid). Such criteria will vary depending upon the condition of the property and the marketplace, and the nature of the transaction. The documentation in the credit file should provide the facts and analysis to support the institution's conclusion that the existing appraisal or evaluation may be used in the subsequent transaction. A new appraisal or evaluation is necessary if the originally reported market value has changed due to factors such as:
What do you do when you have taken a verbal request for a stop payment on a check, but the stop pay form has not been signed and the item is presented for payment?
If you have an oral stop payment on a check, it's good for 14 days if no written request is completed/given. So, if the item is presented for payment within 14 days, you would not pay it. Otherwise, you would.
Are all types of prepaid cards covered under the requirements for CIP?
In order to determine if CIP requirements apply to purchasers of prepaid cards, the bank should first determine whether the issuance of a prepaid card establishes an “account”; and if so, determine the identity of the bank’s customer. Generally, prepaid cards that provide the cardholder with (1) the ability to reload funds or (2) access to credit or overdraft features should be treated as accounts, and the cardholder should be treated as the bank’s customer. For a more detailed summary of the new guidance, refer to Compliance Alliance’s summary for CIP for Prepaid Cards.
Do construction-permanent loans qualify for the 12-month exception from flood escrow if the construction phase is for 12 months or less?
No. While construction-permanent loans typically have an interest-only construction phase of around one year, the total loan term is generally 20 to 30 years. The exception from the new escrow rules requires that the total loan term be 12 months or less. Since both the construction and permanent phases have to be considered in the loan term, a construction-permanent loan would not qualify for the exception, even if the construction phase is for 12 months or less.
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