A new Consumer Financial Protection Bureau rule requires lenders to provide mortgage applicants with free copies of appraisals and other home value estimates. The CFPB announced final adoption of the rule Friday.
Under the rule, creditors are required to inform consumers within three days of receiving a loan application of their right to receive copies of the appraisal. Furthermore, creditors are required to provide appraisal copies and other home valuations to consumers at least three days before closing.
"This rule will guarantee consumers can receive important information on how a lender determines the value of the home," said CFPB director Richard Cordray. "Having this information available promptly makes it easier for loan applicants to make informed decisions."
The CFPB says consumers have traditionally paid for appraisals, but current law does not require lenders to send appraisal copies unless homeowners request it. The Dodd-Frank Wall Street Reform Act stipulates that lenders have to give consumers a copy of every appraisal or other home estimate free of charge. Consumers will still pay for the appraisal process itself.
The new rule takes effect in January 2014 and applies specifically to first-lien mortgages.