i need clarification, please, on what property value - which leads into the reported LTV - to report on the LAR.

1003.4(a)(28) states - in general - we "report the property value relied on in making the credit decision." Our presentations have a collateral table that many times state the required appraised value that is needed, as an appraisal is not ordered until the loan is approved by the lender.
The loan is conditioned on receiving an appraisal for at least the stated required value. The associated LTV on the approval is calculated on this required value. These are the values relied on in making the decision.

Is it these presentation values and LTVs that I report? Or, because a condition of the loan is the satisfactory appraisal, do I report the actual final appraised value and the LTV calculated from that final appraisal.

You condition the approval on a minimum appraisal amount, but the decision is made based on the actual appraised value it sounds like to me. Just like the denial would be.

Thank you rl. The decision is really made on what we require the value to come in at. When the appraisal is received, we verify that the amount at least equals the required amount. If it does, there is no further action taken and the loan proceeds to closing. The only time the loan would be resubmitted for review based on the final appraised amount is if it came in less than was required, which would then require changing the loan amount.

It sounds as if your first response is indicating that we should be reporting the final appraised amount and associated LTV on the LAR. Does the additional information change that?

It might be best to run this past your EIC, as they are the only ones that count. There is no real clear guidance.

If your LAR matches your appraisal, then I can't see an examiner challenging that. If it's based off your max allowable LTV, you'll probably have to explain things to your examiner, and they may or may not accept it. An amount based on the max LTV allowable is not the property value imho.

Sounds to me like you relied on the appraised value in making your credit decision.

Am I interpreting correctly that you rely on the lower of the appraised and the required value?

If the final appraised value is at least the required amount, we proceed to close. If the final appraised amount is less than required, then we don't meet the required LTV for which the loan was approved and have to go back to the borrower.

I was thinking about this as I was walking my dog this morning. The loans, when approved by the lender, are usually "Subject to an appraised value of XXXX to provide for a maximum LTV of XX." So in reality, we really do have only an initial provisional approval, subject to the appraised value of a certain minimum amount, at which time the provisional decision becomes final.

It would appear the only time I can use the collateral value as shown in the presentation for the loan request - which the lender uses to decision the loan - would be if no new valuation were required, which sometimes happens when a borrower comes back for an additional loan against a property recently appraised and no new valuation is required.

I may be getting confused, but IMHO, the Loan to Value is the

Amount of the loan
_________________________
Determined value of the collateral

If the applicant wants a $100K loan, and the appraisal comes back at $100K it's 100% LTV.
If the appraisal comes back at $400K it's 25% LTV

What the bank requires, IMHO is not the LTV - it based on the determined property value - not expectations.

Thank you Rocky. I have come to the same conclusion.

Thank you, everyone, for your input.