You must notify the applicant in writing within three business days of application of the right to receive a copy of any appraisal developed in connection with the application. Appendix C to the rule includes sample text for this disclosure.
A Loan Estimate is a three-page form that you receive after applying for a mortgage. The Loan Estimate tells you important details about the loan you have requested. The lender must provide you a Loan Estimate within three business days of receiving your application.
(c) The lender shall mail or deliver a copy of an appraisal within 15 days after receiving a written request from the applicant, or within 15 days after receiving the appraisal, whichever occurs later.
Section 1474 of the Dodd-Frank Act amended ECOA section 701(e) to require that creditors provide copies of all appraisals and other written valuations to loan applicants, in credit transactions to be secured by a first lien on a dwelling, at no additional cost and without requiring applicants to request such copies ...
Section 1002.14(a)(1) requires that the creditor “provide” copies of appraisals and other written valuations to the applicant “promptly upon completion,” or no later than three business days before consummation (for closed-end credit) or account opening (for open-end credit), whichever is earlier.
The Rule requires that creditors provide copies of the appraisals and other written valuations to the applicants promptly upon completion or no later than three business days before consummation or account opening, whichever is earlier.
A lender can ask you to “waive” your right to get a copy of valuations three business days before closing. This means you agree that the lender does not have to provide you with a copy three days in advance of closing.
Dodd-Frank Act & Appraisals
The Dodd-Frank Act corrected this “loophole” with guidelines intended to ensure that home appraisals being done are accurate, fair, and realistic while also prohibiting brokers from pressuring appraisers to provide higher valuations.
Lenders have no obligation to share or “release” an appraisal with other lenders. New lenders often need a formal “release” of an appraisal from the previous lender, whose name is on the appraisal, before the new lender can use the appraisal for lending purposes.
MDIA. Timing Requirements – The “3/7/3 Rule” The initial Truth in Lending Statement must be delivered to the consumer within 3 business days of the receipt of the loan application by the lender. The TILA statement is presumed to be delivered to the consumer 3 business days after it is mailed.
The 7 Day Waiting Period: Use the precise definition of Business Day here. Consummation may occur on or after the seventh business day after the delivery or mailing of the initial Loan Estimate.
If the lender refuses to send you a Loan Estimate, consider working with another lender. You can also submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372). We'll forward your complaint to the lender and work to get a response, generally in 15 days.
The seller often does not generally get a copy of the appraisal, but they can request one. The CRES Risk Management legal advice team noted that an appraisal is material to a transaction and like a property inspection report for a purchase, it needs to be provided to the seller, whether or not the sale closes.
Timing of notice - when an application is complete.
Once a creditor has obtained all the information it normally considers in making a credit decision, the application is complete and the creditor has 30 days in which to notify the applicant of the credit decision. (See also comment 2(f)-6.)
A valuation for mortgage purposes will have been undertaken, though this may not be based on a physical inspection of the property. A copy of the valuation report will be sent to you with a copy of the Mortgage Offer. The valuation report is obtained for mortgage purposes only and should not be passed to the borrower.
Subsection 1 does not prohibit a person with an interest in a real estate transaction from requesting that an appraiser: (a) Consider additional appropriate property information; (b) Provide further detail, substantiation or explanation for the appraiser's conclusion as to value; o (c) Correct errors in his appraisal.
The Regulation B appraisal requirements apply to any loan application (business or consumer purpose) that is or will be secured by a first lien on a 1-4 family dwelling. The first thing you are required to do is notify an applicant of their right to receive a copy of any appraisal.
Part 2 - The 91-180 day flip rule
It states that if there sale date of the property falls between 91-180 days following the seller's acquisition of the property, AND if the property is being sold for 100% or more over the price paid by the seller to acquire it, then a second appraisal of the home is required.
Note that if the transaction is a higher-priced mortgage loan covered by the 2013 Appraisals for Higher-Priced Mortgage Loans Rule, then under that rule, you must provide copies of written appraisals no later than three business days before consummation. There is no waiver option for appraisals covered by that rule.
Bottom line. Appraisal waivers can be a beneficial option for some buyers, as they save money on appraiser fees and can speed up the closing process. However, the potential risks, such as getting an inaccurate or incomplete picture of the home's value, can be significant.
The Lender Wants To Expedite Underwriting
Another reason lenders might approve an appraisal waiver is if they want to speed up the underwriting process. Issuing a waiver could save lenders both money and time.
The transferring lender is required to provide the new lender with the appraisal but is not required to provide any processing documents. If processing documents are transferred, the fee for providing these documents is to be negotiated between the lenders.
Depending on certain factors, home buyers can expect to receive their appraisal report within 6 – 20 days from the beginning of the appraisal process.
Yahoo Finance tip: Your purchase contract must include an appraisal contingency, which states you can back out if the appraised amount is too low. Otherwise, you will forfeit the earnest money you put into the deal if you walk.