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Marvin Von Renchler's Blog

By Marvin Von Renchler | Managing Broker in Tigard, OR

More APPRAISAL rules to overly complicate the process

This is a quote from a newsletter by California atty Herman Thordson

FACTS

Mortgage lenders are to provide home loan applicants with copies of written appraisals and other home value estimates and ensure that consumers receive information prior to closing about how the property’s value was determined.

Creditors are to inform consumers within three days of applying for a loan of their right to receive a free copy of the appraisal reports and home value estimates. Creditors must furnish the reports as promptly as possible, but in no case later than three days before closing. The rule applies to all loans, regardless of whether credit is extended, denied, incomplete or withdrawn.

Creditors could still charge reasonable fees associated with conducting appraisals and home value estimates; however, the rule would prohibit creditors from charging consumers fees for obtaining the reports.

The rule will:

1. Limit the requirement to applications for credit to be secured by a first lien on a dwelling.

2. Require that creditors notify applicants within three business days of receiving an application of their right to receive a copy of written appraisals and valuations developed in connection with their application.

3. Require creditors provide applicants a copy of all written appraisals and valuations promptly after receiving them, but in no case later than three business days prior to closing on the mortgage.

4. Permit applicants to waive the timing requirement to receive copies three days prior to consummation, provided a copy of all written appraisals and valuations is provided at or prior to closing.

5. Prohibit creditors from charging additional fees for providing a copy of written appraisals and valuations, but permit creditors to charge applicants a reasonable fee to reimburse the creditor for the cost of the appraisal or valuation unless otherwise provided by law.  (alrgs101512bkrsadvinc)

MORAL

Seems repetitive to me since most states require the consumer get a copy anyway. But watch out for the fact that you have to give the consumer the report even if loan denied or withdrawn.

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