“Section 1474 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) amended the ECOA, section 701 (e), to require creditors to provided loan applicants with copies of all appraisals and other written valuations obtained in connection with applications for loans to be secured by a first lien on a dwelling, regardless of loan purpose. Copies of appraisals/valuations are to be provided at no cost to the applicants promptly upon completion; applicants are not required to request the copies. This new rule is a revision of existing Regulation B, which formerly required either the delivery of a copy of an appraisal or delivery of a notice that a copy of the appraisal would be provided to applicants upon request.”
You can get an overview of the act here: Disclosure and Delivery Requirement for Copies of Appraisals and Other Valuations Under the Equal Credit Opportunity Act (Regulation B)
Here is a letter a colleague wrote to the CFPB (Consumer Financial Protection Bureau). The CFPB has been asked to address questions that have been raised. We would like the CFPB to be clear in their communication. The CFPB wrote a 125-page document that goes into great detail of many nuances of this act, but we need clarification and an answer to the following question:
“Can a potential borrower who receives a mandated copy of an appraisal report three days before consummation use, rely on, and be able to read the appraisal report? The appraisal report noted here is the same appraisal report that the potential borrowers often pay for. Some potential borrowers believe that they do, some judges and juries have ruled that they do, and yet other CFPB communication infers they do not but does not clearly state one way or the other.
The following quotes are from the Summary of final Equal Credit Opportunity Act (ECOA) rule on providing appraisals and valuations dated January 18, 2013 and the Disclosure and Delivery Requirements for Copies of Appraisals and Other Written Valuations Under the Equal Credit Opportunity Act (Regulation B) published by the CFPB (January 24, 2013).
Some of the CFPB quotes in the 125-page document infer that the potential borrower can use, rely on, and be able to understand the appraisal report. Other quotes from the same document contradict this.
First the CFPB quotes in support of the potential borrower making use, relying on and being able to read or understand the appraisal report: