The Consumer Financial Protection Bureau ( CFPB ) has issued the much-anticipated final rules that implement residential mortgage reforms of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank ). In a series of reports, PYA is analyzing the impact of each of these new rules, this week looking at the amendment to the Equal Credit Opportunity Act ( ECOA ) that will require creditors to provide applicants with copies of appraisal reports and other written valuations prepared in connection with first-lien loans secured by a dwelling.
The CFPB states: This provision was designed to inform mortgage applicants of how a property s value was determined by the creditor, and to make it easier for loan applicants to determine if a loan application was denied due to discrimination.
The final rule, which takes effect January 18, 2014:
- Requires creditors to notify applicants of their rights to receive copies of appraisals within three business days of receipt of an application.
- Requires creditors to provide applicants copies of appraisals and other written valuations promptly upon their completion or three business days before consummation (for closed-end credit) or account opening (for open-end credit), whichever is earlier.
- Permits applicants to waive the timing requirement for providing the appraisals or written valuations; however, applicants who waive the timing requirement must be given the appraisals or written valuations at or prior to consummation or account opening. If the transaction is not consummated or the account is not opened, these documents must be provided no later than 30 days after the creditor determines the transaction will not be consummated or the account will not be opened.
- Prohibits creditors from charging for copies of appraisals and other written valuations, but permits creditors to charge applicants reasonable fees for the costs of the appraisals or other written valuations unless applicable law provides otherwise.
View the final rule amending appraisal requirements under ECOA. To discuss the bearing of the new mortgage rules on your institution, please contact the expert listed below at PYA, (800) 270-9629.
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