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Lenders must follow new appraisal disclosure rules


WASHINGTON – Jan. 17, 2014 – New consumer protection rules kick in tomorrow, Jan. 18, that give mortgage applicants more information on why a loan was accepted or rejected. While the rule will help identify cases of discrimination, it also empowers buyers by providing appraisals and other data early enough that the buyer can contest the results.

The relatively new Consumer Financial Protection Bureau (CFPB) oversees the change.

Under the Jan. 18 rule, a lender:

• has three days after a mortgage application is submitted to tell an applicant that he or she will “promptly get a copy of any appraisal”

• must provide a free copy of any valuation, which may include many commonly used reports, such as an appraisal report, an automated valuation model report, or a broker price opinion

• has to give an applicant the copies “promptly after the reports are completed” or three days before the loan closes, whichever is earlier

• has to provide the copies promptly even if your loan doesn’t close

• may charge an applicant a “reasonable fee for the cost of the valuation”

• can ask an applicant to waive the three-day deadline if the applicant agrees; in that case, the copies would be provided at closing

Buyers who don’t waive their right to early documents should receive a copy of the appraisal earlier in the process, giving them more time to review the underlying data the appraiser used.

The new rule applies only to first liens, including construction loans and reverse mortgages. It does not apply to second mortgages or home equity loans.

© 2014 Florida Realtors®

Related Topics: Mortgages