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.
|Appraisal Rules Prior to Jan 18, 2014||Appraisal Rules From Jan 18, 2014|
|Key Requirement||Send Either
|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.|
Updated: Jun 14, 2014