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2014 Changes To Regulation B Appraisal Rules

Comparison of Old and New Appraisal Rules

2014 Changes To Regulation B Appraisal Rules

Consumer Financial Protection Bureau (CFPB) changed the appraisal rules in Regulation B on January 18, 2013. The new appraisal rules are effective for any mortgage loan application received on or after January 18, 2014. Below is a comparison of the new 2014 appraisal rules with the appraisal rules that existed prior to January 18, 2014.

Source :www.MortgagesAnalyzed.com
Basis of
  Comparison  
Appraisal Rules Prior to Jan 18, 2014 Appraisal Rules From Jan 18, 2014
Key Requirement Send Either
  1. Right to Receive Copy of Appraisal Report Disclosure (Upon Request): Disclose to the applicants that they have the right to receive a copy of the appraisal report if they make a request within 90 days from when the lender provided the notice of action taken. In this case, appraisal is provided if requested by the applicant.
  2. Copy of Appraisals (Routine Delivery): Automatically send a copy of the appraisals promptly after they are completed, regardless of whether credit is extended, denied, incomplete, or withdrawn.
Send Both
  1. Appraisal Disclosure: Disclose to applicants that they will receive copies of appraisals and written valuations.
  2. Copy of Appraisals: Automatically send a copy of appraisal report or any other written valuation promptly after they are completed, regardless of whether credit is extended, denied, incomplete, or withdrawn.
Delivering Appraisal Appraisals are either provided routinely for each loan application or upon request of the applicant. If appraisal is provided upon request, then the lender must provide the Right to Receive Copy of Appraisal Report Disclosure. Appraisal is to be provided for each loan application.
Timing – Disclosure Lender may send the Right to Receive Copy of Appraisal Report Disclosure at any time during the application process but no later than the date of action taken. Lender must mail or deliver the Appraisal Disclosure within 3 days from date of application.
Timing - Appraisal Routine Delivery: No timing was specified in the regulation. However, appraisal was generally provided at least three days prior to closing (based on HVCC).

Upon Request: A copy of the appraisal report must be sent within 30 days of receiving a request from the applicant, provided the applicant makes a request for the appraisal within 90 days of providing the notice of action taken.
Appraisal must be delivered promptly upon completion, or no later than three business days prior to loan consummation (for closed-end credit) or account opening (for open-end credit), whichever is earlier.

Delivery occurs three business days after mailing or delivering the copies to the last-known address of the applicant, or when evidence indicates actual receipt by the applicant, whichever is earlier. Delivery to or actual receipt by the applicant by electronic means must comply with the E-Sign Act.
Waiver for Timing of Delivery of Appraisal Waiver did not apply. Provided certain conditions are met, the applicant can waive the timing requirements for the receipt of appraisal and elect to receive the appraisal at or before consummation or account opening.
Coverage - Loans Applied to any loan secured by dwelling, including first and subordinate liens. Applies to first liens only. Appraisal disclosure and appraisal requirements do not apply to subordinate lien loans.
Coverage - Appraisals Rules applied to appraisal reports that were used in connection with the loan application. Rules apply to all appraisal reports and any other written valuation. Reg B defines valuation as "any estimate of the value of a dwelling developed in connection with an application for credit." Therefore, it would include AVMs, BPOs, and internally developed valuations.
E-sign The appraisal and Right to Receive Copy of Appraisal Report Disclosure can be sent electronically to the applicant without the E-sign requirements. Appraisal: The appraisal can be sent electronically to the applicant subject to the compliance with the requirements of E-Sign Act

Appraisal Disclosure: The Appraisal Disclosure can be provided electronically to the applicant without regard to the applicant’s consent or other provisions of the E-Sign Act.
Cost of Delivery of Appraisal Lenders could charge for photocopy fee, postage fee, and other costs associated with delivery. No fee can be charged for delivering the appraisal. Therefore, photocopy, postage, and other delivery fee cannot be charged.
Cost of Appraisal Lender may charge a fee for appraisal. Fee reflecting reasonable cost of appraisal may be charged.
Credit Unions Credit unions that were regulated by National Credit Union Administration were not subject to Reg B Appraisal requirements. Reg B appraisal requirements now apply to credit unions.
Source :www.MortgagesAnalyzed.com

Updated: Jun 14, 2014

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The new appraisal rules are effective for any mortgage loan application received on or after January 18, 2014
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