The Consumer Financial Protection Bureau (CFPB) adopted a rule that requires mortgage lenders to provide applicants with free copies of all appraisals and other home-value estimates.
“This rule will guarantee consumers can receive important information on how a lender determines the value of the home,” said CFPB Director Richard Cordray. “Having this information available promptly makes it easier for loan applicants to make informed decisions.”
While consumers are generally responsible for paying for the appraisal, the current law does not require that consumers receive a copy of the appraisal unless they request it and does not require that consumers receive a copy of any other estimates of the home’s value.
The rule also requires that creditors notify consumers within three days of receiving an application for a loan of their right to receive copy of all appraisals.
“Creditors will then be required to provide the copies of appraisal reports and other written home-value estimates to consumers promptly, or three days before closing, whichever is earlier,” said the CFPB.
The Mortgage Bankers association didn’t object to the new rule.
“A fair and accurate appraisal is a critical tool for lenders and borrowers alike,” said Debra W. Still, Chairman of the MBA. “The appraisal rules announced today, under both ECOA and TILA, appear to be reasonable, commonsense solutions. These standards will increase transparency for borrowers and give lenders a uniform set of guidelines under which to operate, hopefully without unnecessarily increasing costs or reducing access for borrowers.”
The new rule will go into effect in January 2014 and will apply to first-lien mortgages.
View a copy of the final rule here.