Agency Proposal Aims for Earlier Access to Appraisals
Agency Proposal Aims for Earlier Access to Appraisals
The Consumer Financial Protection Bureau is proposing a rule that would require borrowers receive earlier access to appraisal reports and information on how the home’s value was determined.
Under the proposal, creditors would have three days after applicants apply for a loan to inform borrowers that they have a right to receive a free copy of all appraisal reports and home value estimates. The appraisal reports would be required to be provided as soon as they’re available and at least three days prior to closing. Even if a loan is denied, creditors must still supply borrowers with the appraisal reports, under the proposed rules.
“When looking to buy a home or refinance a mortgage, consumers need the best available facts and data,” says Richard Cordray, the bureau’s director. “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.”
The earlier appraisal requirement would give borrowers more time to work with a lender too in case an appraisal comes in lower than the agreed upon price and threatens to derail a deal, says Glenn Crellin, associate director in real estate studies at the University of Washington.
The CFPB, which hopes to finalize the rule in January 2013, is accepting comments on the proposed rule until Oct. 15.
Source: “Feds Want Cleaner Disclosure of Home Appraisals by Lenders,” NBC News (Aug. 17, 2012)
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