Right to Receive Copy of Appraisal Report is a disclosure informing loan applicants of their right to receive a copy of the appraisal report that was used in connection with an application of a loan secured by a residential property. Residential property includes any residential structure that contains one to four units whether or not that structure is attached to real property. This includes, but is not limited to, an individual condominium or cooperative unit, and a mobile or other manufactured home.
The requirement for sending this disclosure is specified in §1002.14 of Regulation B. Under Regulation B, the lender has a choice to either send:
On January 18, 2013 CFPB amended the Regulation B rules. The new rules will be effective for applications received on or after January 18, 2014. Under the new rules, the lender will be required to send both:
While the current rules give the lender a choice in implementing either of the two above, the new rules will require the lender to send both.
Another key change will require a lender to send the Right to Receive Copy of Appraisal Report disclosure within 3 days from date of application. The current rules allow the lender to send this disclosure no later than date of action taken.
The disclosure document contains the following:
You may want to take advantage of obtaining a copy of the appraisal report from the lender. Make your request in writing at the address provided in the disclosure. Remember you have only 90 days from the date you receive the notice to send your request.
The requirement to either provide the appraisal report or the Right to Receive Copy of Appraisal Report disclosure applies to any type loan that is secured by a residential property. This includes both commercial purpose loans and consumer purpose loans. This requirement also applies when an applicant requests the renewal of an existing loan and you obtain a new appraisal report. However, it does not apply when you use an appraisal report you previously obtained to evaluate the renewal request.
If there are more than one loan applicants then the disclosure or the appraisal report can be given to only one applicant, but it must be given to the primary applicant where one is readily apparent. Generally, your loan officer or the processor would be responsible to send the disclosure.
The disclosure should be sent in writing.
Per Regulation B, the disclosure must be given at any time during the application stage as long as it no later than when you provide a notice of action taken. Therefore, depending upon the action taken, the following may apply:
As mentioned above, the ECOA Valuations Rule will change the timing requirements whereby you will be required to send the disclosure within 3 days from the date of application.
We recommended that you include this disclosure along with the early disclosures/three day disclosure (GFE, TIL, etc.). This will simplify the process. However, the only risk here is that you may decline a loan within three days from the date of completed application and you may not send the early TILA and RESPA disclosures. In this case, you have to remember to still send the Right to Receive Copy of Appraisal Report disclosure. Regulation B requirements still apply, irrespective of whether or not the RESPA or TILA disclosures apply.
|Purpose||To inform the loan applicants of their right to receive a copy of the appraisal report that was used in connection with their application of a mortgage loan.|
|Use in Mortgages||To inform the applicant of their right to receive a copy of the appraisal report and the time within which to make the request for the appraisal.|
|Provided To||Loan applicants|
|Life Cycle Stage||Origination|
|Recordkeeping||We recommend retaining a copy of the disclosure that was sent to the borrower in the loan file for as long as the loan file is maintained. For cancelled, withdrawn, or denied applications, retain a copy of the appraisal for at least 25 months from date of notifying an applicant of action taken.|
|Applicable Laws||CFPB Regulation B, 12 CFR §1002.14|