This morning the CFPB issued a proposed rule requiring mortgage lenders to provide free copies of all written appraisals and valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling no later than three days before closing, regardless of whether credit is extended, denied, incomplete or withdrawn. This rule would modify the existing requirement of providing copies of written appraisals to consumers on request. Moreover, and in seeming contradiction to the CFPB’s general goal of reducing redundancy, the rule would also require creditors to notify applicants in writing -- at the time they submit a loan application -- of their right to receive a copy of each written appraisal or valuation. That is, if the applicant is already receiving it by virtue of the proposed rule, it is entirely unclear why they would need to be informed of that right. Such a notification would make more sense if the consumer merely had an option to request the data.
The proposed rule would amend the Equal Credit Opportunity Act (ECOA)’s Regulation B, which requires certain disclosures and prohibits lenders from discriminating on the basis of race, national origin, sex, or other protected bases. The public will have 60 days, or until October 15, 2012, to review and provide comments on the proposed rule. The CFPB anticipates issuing a final rule in January 2013.
Stay tuned to the CFPB-Lawblog for our complete analysis of this rule and its full impact on the mortgage industry.