How refreshing to get a proposal from the CFPB that totals less than 100 pages.
On August 15, 2012 the Consumer Financial Protection Bureau (CFPB) published a 58-page release that contains proposed rules to implement a Dodd-Frank Act requirement that amends appraisal rules to help inform mortgage applicants on how a creditor determines a property’s value prior to closing on the mortgage. It will also make it easier for loan applicants to determine if a loan application was denied due to a discriminatory appraisal.. Comments are due by October 15, 2012. The CFPB plans to finalize the rule by January 2013.
The proposed rule would implement an amendment to the Equal Credit Opportunity Act (ECOA). ECOA prohibits lenders from discriminating on the basis of race, national origin, sex, or other bases protected under the statute. The proposed rule amends ECOA and Regulation B to require creditors to automatically provide mortgage applicants with a copy of appraisal reports and valuations prepared in connection with certain mortgage loans.
The proposed rule amends the regulation to:
- Limit the requirement to applications for credit to be secured by a first lien on a dwelling.
- Require that creditors notify applicants within three business days of receiving an application of their right to receive a copy of written appraisals and valuations developed in connection with their application.
- Require that creditors provide applicants a copy of all written appraisals and valuations promptly after receiving them, but in no case later than three business days prior to closing on the mortgage.
- Permit applicants to waive the timing requirement to receive copies three days prior to consummation, provided a copy of all written appraisals and valuations is provided at or prior to closing.
- Prohibit creditors from charging additional fees for providing a copy of written appraisals and valuations, but permit creditors to charge applicants a reasonable fee to reimburse the creditor for the cost of the appraisal or valuation unless otherwise provided by law.
For a copy of the 58-page proposal click here.