The proposed Fair Value and Independent Appraisal Act , introduced by Sen. Robert Casey [D-Pa] amends the Truth in Lending Act to prohibit a creditor from extending a mortgage to any consumer without first obtaining a written appraisal of the property to be mortgaged, prepared in accordance with specified requirements. Download S2860_Fair_Value_and_Independent_Appraisal_Act.pdf
Appraisal Scoop reported on this bill when it was first introduced in April (click here) but I think this is one of those bills that appraisers should really take a look at again and voice their opinions using the poll at the bottom of this post or on the sidebar of this blog.
One of the more interesting provisions of the S. 2860 Act is Sec. 2. Property Appraisal Requirements. Under that section it would amend Sec. 129 of the Truth in Lending Act (15 U.S.C. 1639) to require a written appraisal performed by a qualified appraiser that visits the interior of the mortgaged property.
The proposed Act also requires a creditor to provide a copy of each such appraisal to the consumer without charge, at least three days prior to the transaction closing date.
Another extremely important Sec. 2 sub-section deals with what copies of appraisals the mortgage applicant should receive and when.
The Act directs that "Each creditor shall furnish to an applicant, a copy of all appraisal reports and valuations developed in connection with the applicant's application for a loan that is or would have been secured by a lien on residential real property.
Why is it important that ALL reports be provided? This would be a giant step in eliminating the practice of "Appraisal Shopping" and "AVM Shopping" until the lender finds the highest value. If an AVM is ordered as part of a mortgage transaction . . .the applicant would receive a copy!
The Act also declares unfair or deceptive specified property appraisal practices in the provision of: (1) mortgage lending services for a consumer credit transaction secured by the consumer's principal dwelling; or (2) any mortgage brokerage services for such a transaction. Establishes civil monetary penalties for such practices.
It further directs the Board of Governors of the Federal Reserve System and the Federal Trade Commission to jointly prescribe regulations defining such unfair or deceptive acts or practices. Download S2860_Fair_Value_and_Independent_Appraisal_Act.pdf
Recent Comments