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Dodd-Frank required mortgages with higher rates to face greater appraisal demands, but regulators have expanded the loans granted exemptions in a new final rule.
January 15 -
The CFPB released its long-awaited final rule laying out how lenders must ensure borrowers have the ability to repay a loan, including creating a carve-out for qualified mortgages.
January 10 -
Many lenders aren't waiting around for regulators to define what a qualified mortgage is and instead are making their own rules.
October 5
WASHINGTON — The Consumer Financial Protection Bureau will require mortgage lenders to release free copies of home appraisals to borrowers as part of several appraisal rules released this week.
The free appraisal rule issued solely by the CFPB follows one issued earlier this week by all six federal financial regulators on high-priced mortgages.
In the bureau's independent rule, the agency allows lenders to still charge borrowers "a reasonable fee" for performing the appraisal but the copies to the applicant must be free. This includes all appraisals and any home value estimates.
"This rule will guarantee consumers can receive important information on how a lender determines the value of the home," said CFPB Director Richard Cordray, in the release. "Having this information available promptly makes it easier for loan applicants to make informed decisions."
Lenders typically charge applicants for an appraisal but are not required to give a copy of it to borrowers unless they request it. Under the CFPB's rule, lenders can still charge for performing the appraisal but must give copies for free.
Creditors will also be required to inform the consumer within three days of receiving an application of their right to a free appraisal. The appraisal copies must then be given immediately or three days before closing, whichever is earlier.
The new rule takes effect next January and applies to first-lien mortgages. It follows another rule the CFPB adopted today that was released by all regulators Tuesday on higher-priced mortgages.
That rule requires certified appraisals (including a physical home inspection) for non-jumbo mortgages with rates at least 1.5 percentage points higher than the prime rate. However, the agencies did establish new loan classes that would be exempt from the requirement, including loans considered a "qualified mortgage" under the CFPB's recently issued rule.
