January 18th saw the kicking in of new appraisal disclosure regulations – strengthening the sentiment of prospective property buyers and sellers alike. This new consumer protection law may help the Orlando real estate market to bloom further and listing agents in Orlando and other emerging US real estate and property markets are looking forward to witnessing the change.
Under the new rule, prospective buyers have the right to demand and receive a free copy of the appraisals, reviews, and details of computer valuations used for their mortgage applications from their lenders.
And what does this mean for consumers? They can make use of increased information and insight about the processing of their mortgage applications to their advantage. For instance, homebuyers who feel they were unjustly denied an appraisal would now have better proof, more time, and stronger ammunition to challenge the erroneous appraisal.
Key aspects of the new disclosure rules
The new rules currently apply only to first loans. Home equity loans or second mortgages are not covered under the appraisal disclosure rule but reverse mortgages and construction loans fall in its jurisdiction.
Central Florida and Orlando realtors are hopeful the new rule will help buyers contest wrongful processing of mortgage applications and increase their purchase power.
Key features of the new rule include:
* Lenders must inform mortgage applicants that they would promptly receive a copy of any appraisal that is valued for them, within three days of receiving the mortgage application from the consumer.
* Consequently, lenders must provide free copies of such appraisals and valuations.
* They have until three days before the closure of the loan, to provide the free copies of appraisal reports, valuations, and other proceedings. The Consumer Financial Protection Bureau however suggests reports to be sent as soon as they are completed, or three days before the loan is due to close, whichever comes earlier.
* This essentially means, home buyers are entitled to receiving their copy of the valuation and appraisal report, even if lenders fail to close their loans.
The Bureau provides lenders the option of asking a consumer to opt-out of the 3-day deadline. A consumer who agrees would thus receive his copy of the report at the time of closing of the mortgage. On the other hand, a customer who does not waive the deadline must be provided with his copy, within the stipulated time.
Orlando real estate agents feel the new law will help Orlando residents review the data used by the appraiser and contest faulty appraisals – increasing their confidence in seeking mortgages to purchase the property.
