Friday, August 6, 2004 - Appraisals and Consumers Rights

Many of you who have taken our Alliance Academy mortgage courses have probably heard me say in class that real estate licensees should be required to take mortgage courses to understand what happens to their customers when they hand them off to their favorite mortgage broker or loan officer.  Real estate licensees rarely, if ever, handle a cash deal.  If they knew what we do, there would be fewer phone calls to us asking what happens next. Did you get the appraisal?  Is he approved?  Etc.

It wasn’t until I read in a large number of emails from Real Estate Educators who are members of the National Real Estate Educators Association, REEA, of which I am President of our 5 state Chapter, that there is a “nationwide” void of mortgage knowledge.  For instance, they didn’t know nor could they teach correctly in their classes the rules concerning the consumer’s right to a copy of the appraisal as provided in the Federal Consumer Protection Statute, the Equal Credit Opportunity Act, ECOA. 

The Federal Statute, the Equal Credit Opportunity Act, Section 202.14, Rules on Providing Appraisal Reports, says;

(a) Providing appraisals. A creditor shall provide a copy of an appraisal report used in connection with an application for credit that is to be secured by a lien on a dwelling.  A creditor shall comply with either paragraph (a)(1) or (a)(2) of this section.

(1) Routine delivery.  A creditor may routinely provide a copy of an appraisal report to an applicant (whether credit is granted or denied or the application is withdrawn).

(2) Upon request.  A creditor that does not routinely provide appraisal reports shall provide a copy upon the applicant's written request.

    (i) Notice.  A creditor that provides appraisal reports only upon request shall notify an applicant in writing of the right to receive a copy of an appraisal report.

The notice may be given at any time during the application process......  The notice shall specify that the applicant's request must be in writing, give the creditor's mailing address, and state the time for making the request as provided in paragraph (a)(2)(ii) of this section.

    (ii)  Delivery. A creditor shall mail or deliver a copy of the appraisal report promptly, generally within 30 days, after the creditor receives the appraisal request, receives the report, or receives reimbursement from the applicant for the report, whichever is last to occur.  The creditor need not provide a copy when applicant's request is received more than 90 days after the creditor has provided notice of action taken on the application.

By the way, the ECOA is the only Federal statute which prohibits discrimination based on "age".  So if an 85 yr old buyer applies for a 30 year mortgage, they can't be turned down because they are too old.