The Consumer Financial Protection Bureau (CFPB) recently proposed a new rule that would require mortgage lenders to provide free appraisal reports to applicants. The report would offer a deeper look at how the value of the property was determined. The proposed rule is open for commentary until October 15. At that point, all comments and concerns will be reviewed and taken into consideration before the final rule takes effect in January 2013.
The new rule states that consumers would be informed of their right by creditors to the free appraisal report and home estimates within three days of applying for a loan. CFPB proposed the rule as a response to a provision in the Dodd-Frank Act that requires creditors to provide mortgage applicants with a copy of written appraisals and home value estimates. Additionally, the report would be required irrespective of whether credit was extended, denied, incomplete, or withdrawn no later than three days before closing. The hope is that consumers would be given these reports as quickly as possible in order to make a sounder decision.
Adds CFPB director Richard Cordray, “When looking to buy a home or refinance a mortgage, consumers need the best available facts and data. This rule would guarantee consumers receive important disclosures on how a lender determines the value of the home, making it easier for loan applicants to make informed decisions.”
Presently, consumers are normally charged for appraisal costs, and in order to have access to the report, consumers must request them from creditors, sometimes for a fee. The new rule would still allow lenders to charge a reasonable fee to conduct the appraisal and assist them with their lending decision. But now, they will no longer be permitted to charge a fee for providing a copy of the report to a consumer.
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