The Consumer Financial Protection Bureau on Friday released a newrule that requires mortgage lenders to provide applicants with freecopies 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 ofreceiving a first mortgage application of their right to receive acopy of the appraisal. Appraisals must be furnished to theborrower at least three days before the loan closes. The new rulegoes into effect in January 2014.
|“This rule will guarantee consumers can receive importantinformation on how a lender determines the value of the home,” saidCFPB Director Richard Cordray. “Having this information availablepromptly makes it easier for loan applicants to make informeddecisions.”
|The disclosure requirements of the new appraisal rule overlapwith a rule on appraisals for higher-priced mortgage loans the CFPB formally issued jointly with several other agencies Friday, includingthe NCUA. The FDIC had made the rule public on Wednesday.
|That new rule creates an additional level of due diligence byrequiring that creditors use a licensed or certified appraiser toprepare the written appraisal report based on a physical inspectionof the property. The rule also requires creditors to disclose toapplicants information about the purpose of the appraisal andprovide consumers with a free copy of any appraisal report.
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