The Consumer Financial Protection Bureau on Friday released a new rule that requires mortgage lenders to provide applicants with free copies of all appraisals and other home-value estimates.
Lenders may still recover the cost of obtaining the appraisal, but not for providing a copy to the borrower.
Lenders must also inform consumers within three days of receiving a first mortgage application of their right to receive a copy of the appraisal. Appraisals must be furnished to the borrower at least three days before the loan closes. The new rule goes into effect in January 2014.
“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.”
The disclosure requirements of the new appraisal rule overlap with a rule on appraisals for higher-priced mortgage loans the CFPB formally issued jointly with several other agencies Friday, including the NCUA. The FDIC had made the rule public on Wednesday.
That new rule creates an additional level of due diligence by requiring that creditors use a licensed or certified appraiser to prepare the written appraisal report based on a physical inspection of the property. The rule also requires creditors to disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report.