On January 18, the Consumer Financial Protection Bureau (CFPB) issued a final rule that implements amendments made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to the Equal Credit Opportunity Act (ECOA) to require creditors to provide applicants with copies of appraisals and other written valuations conducted as part of the credit process (the Final Rule). Specifically, the Final Rule requires creditors to provide residential mortgage loan applicants with a copy of any and all appraisals and other written valuations developed in connection with an application for closed or open-end credit that is to be secured by a first lien on a dwelling. The practical import of this Final Rule is that creditors will need to ensure that their systems and procedures ensure that any time an appraisal or valuation is conducted or obtained for an application for credit, the borrower is provided both notice of the right to a copy, and the actual copy itself, of such appraisals or valuations. The requirements of the Final Rule will become effective on January 18, 2014.
Previously, creditors were required to provide applicants with copies of appraisal reports only upon written request from the borrower. Under the Final Rule, creditors must: (i) provide a disclosure that notifies applicants, within three business days of receiving an application, of their right to receive a copy of any appraisals or other written valuations; and (ii) actually provide a copy of the appraisals and/or other written valuations to the applicant, regardless of whether the consumer requests them and regardless of whether the credit is extended or denied, or the application is incomplete or withdrawn.
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