The summer is meant for enjoying a vacation where you experience the warm beach weather and the crashing ocean waves. Unfortunately, this summer has brought waves of proposed rules that have only heated up the regulatory environment with no sandy beach in sight.
One of those new proposed rules is a proposed change to Regulation B. On August 16th, the CFPB released a proposed rule that would amend the Equal Credit Opportunity Act (ECOA) by requiring mortgage lenders to provide home loan applicants with copies of written appraisals and other home value estimates developed in connection an application. The rule would ensure that members receive information on the property’s value determination prior to closing.
The following is a summary of the proposed rule about providing appraisals to applicants:
- The new requirement would apply to applications for credit secured by a first lien on a dwelling.
- Requires that creditors notify applicants within three business days of receiving an application of their right to receive a copy of written appraisals and valuations.
- Requires 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business days prior to closing on the mortgage, regardless of whether the credit is extended, denied, incomplete, or withdrawn.
- Permits 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.
- Prohibits 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.
These changes were enacted by the Dodd-Frank Act and the CFPB hopes to issue a final rule in January of 2013. For now, you can comment on these proposed rules until October 15th.
With all of these new regulations, I am sure most of us are wishing we could have some more summer vacation left.