4. Home › Forums › Compliance Masters Group (Members Only) › Reg B Appraisal Rules. Carmen Thomas is meeting with the loan officer of her bank, Mark Shellig, to discuss a loan she would like to get to make some repairs on the house she has lived in for 18 years. 1. This provision is now covered by the CFPB’s Regulation B rules. 6. That is my thought as well. 6. Specified trigger events require a US public company to file an 8-K within four business days to report the event and provide certain related information. Michael Richards, a loan officer at Uptown Bank, is meeting with Karen Yates, a graduate student at a prestigious university. Redlining is an unethical and frequently illegal practice that denies loans or services to people living in majority-minority communities. Which statement best describes the purpose of the Equal Credit Opportunity Act (ECOA)? In finance, the term adverse action refers to a type of notice given by a lender when a borrower's credit application has been denied. A new home appraisal rule just went into effect—the first time in 25 years that “federal regulators have increased the property value limit of the homes that require an appraisal as part of the selling process,” said REALTOR® Magazine. 1639h(b… This topic has 1 reply, 1 voice, and was last updated 6 years, 10 months ago by rcooper. Thelma White, a loan officer at Downtown Bank, is meeting with Larry Cook, a retired schoolteacher. 3. Posted By: nossa Re: New Reg B Appraisal Notices & Copies - 08/06/14 04:35 PM. Home › Forums › Equal Credit Opportunity Act/Regulation B › Reg B Appraisal Rules – Esign. You hear a compliance officer express a concern that he may have identified a violation of the Equal Credit Opportunity Act. Reg B mandates that lenders provide explanations to rejected applicants within 30 days of receiving their completed applications. 53580 Federal Register/Vol. 5. 81 Fed. A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. Brandon reviews the completed application and decides to make a counteroffer for a loan and calls Ms. Boyd to tell her the counteroffer and she accepts. Triggers are external events or circumstances that may produce very uncomfortable emotional or psychiatric symptoms, such as anxiety, panic, discouragement, despair, or negative self-talk. Mr. and Mrs. Link have applied for a real estate loan with National Bank. Amanda, a loan officer, has three loan files on her desk. The final rule revises Regulation B to implement an ECOA amendment concerning appraisals and other valuations that was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Which option correctly lists two circumstances under which age can be considered? The offers that appear in this table are from partnerships from which Investopedia receives compensation. The Consumer Credit Protection Act of 1968 (CCPA) is federal legislation outlining disclosure requirements for consumer lenders. In the middle of the sample document they called it a Restricted Use Appraisal Report. One file includes a consumer loan for $35,000, the second file includes a consumer loan of $25,000, and the third file includes a business loan for $50,000. 12. Posts. Federal Reserve. 6. By Ken Lloyd . Consumer Credit Protection Act of 1968 (CCPA), Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B). In general, the revisions to Regulation B require creditors to provide to applicants free copies of all appraisals and other written valuations developed in connection … If a request is denied, Regulations B and V adverse action timing and notification requirement should be followed. Thelma tells Mr. Cook he will need to include information about his race, sex, marital status, and age on the loan application. Keymaster. Contains the CFPB rules regarding the provision of appraisal reports and other written valuations to consumers by creditors 12 CFR § 1026.42 – CFPB – Valuation Independence Establishes the valuation independence standards, including the requirements for the payment of reasonable and customary fees, applicable to institutions regulated by the Consumer Financial Protection Bureau An inquiry about loan rates and terms C. The refinance of a 20-unit apartment complex D. An application for an auto loan if the applicant plans to live in his car. Chip Dawson is a loan officer at Anytown Bank. Absent evidence of actual receipt by the applicant, delivery is deemed to have occurred on Thursday, December 5 ( i.e., three business days after mailing the appraisal). The Reg B appraisal rules are triggered by what event? When it comes to credit transactions, a creditor cannot discriminate:, Regulation B also mandates that lenders provide oral or written notice of rejection to failed applicants within 30 days of receiving their completed applications. Below is a comparison of the new 2014 appraisal rules with the appraisal rules that existed prior to January 18, 2014. Consumer Financial Protection Bureau (CFPB) changed the appraisal rules in Regulation B on January 18, 2013. Mateo needs to provide the customer with a free written valuation of the property. The Fair Housing Act is the federal law that forbids discrimination in housing based on race, sex, religion, nationality, disability, and family status. There are many different types of credit. The disclosure of an applicant's right to receive the appraisal must be mailed or delivered no later than what day? 9. During the loan interview, Richard expresses concern that Ms. Cooper may not qualify for the loan based on her current income and asks if her husband can cosign the loan. 195/Tuesday, October 8, 2019/Rules and Regulations 1 83 FR 63110 (December 7, 2018). Which method is the bank most likely using? The recession of 2007 to 2009 caused many mortgage lenders to tighten formerly acceptable rules. Reg B outlines the rules that lenders must adhere to when obtaining and processing credit information. Unlike TRID rules under Regulation Z which clearly define a completed application as having received six pieces of information (name, income, SSN, address, loan amount, and estimated property value), Regulation B provides latitude for establishing what a financial institution considers to be a complete application. (a) Providing appraisals and other valuations. Regulation B's prohibition of advertising that would discourage potential applicants from applying for loans is a crucial part of redlining cases. Creditors that fail to comply with Regulation B are subject to punitive damages. Ms. Cooper wants a loan to make repairs on her house. 84, No. Reacting to triggers is nor mal, but if we don't recognize them and respond to them appropriately, they may actually cause a downward spiral, making us feel worse and worse. 8. Congress enacted the ECOA to ensure that financial institutions and firms dealing with credit make it equally available to all creditworthy customers. Specifically, it has 1) processed loan payments 2) filed currency transaction reports 3) determined credit evaluation criteria 4) sent thank you letters. Regulation B covers the actions of a creditor before, during, and after a credit transaction. 2. Ms. Boyd wants a loan to make repairs on her house. The Reg B appraisal rules are triggered by what event? Creditors that fail to comply with Reg B will be held liable for punitive damages up to $10,000 in individual actions. She has a written business plan and knows exactly how to solicit donations from participating businesses, and already has some businesses lined up. TheBank. The initial final rule was issued in January 2013. For example, an applicant who puts down his home as collateral will have additional information collected for monitoring compliance. Given the volume and complexity of the CFPB’s new mortgage rules related to Reg Z and Reg X, we haven’t focused much on the new Reg B appraisal rule. Based on your understanding of Regulation B, which option correctly lists two instances of age consideration that were legal? 3. Tagged: refinance, Reg B, valuation. Compliance > Regulation B - ECOA. You can learn more about the standards we follow in producing accurate, unbiased content in our. Redlining is the discriminatory practice of denying services (typically financial) to residents of certain areas based on their race or ethnicity. Viewing 4 posts - 1 through 4 (of 4 total) Author. Federal Reserve. See. 5. 2 12 U.S.C. Summary: The federal banking agencies (the Agencies) are issuing the attached Frequently Asked Questions (FAQs) on appraisal and evaluation functions. Under RESPA, for example, you have an application when you have specific pieces of information; which includes a property address. An appraisal performed by a State certified or licensed appraiser is required for all real estate-related financial transactions except those in which: (1) The transaction is a residential real estate transaction that has a transaction value of $400,000 or less; (2) A lien on real estate has been taken as collateral in an abundance of caution; Marital status is also required if the applicant resides in a community property state., A creditor may only request information from a loan applicant’s spouse if:. 6. 2. How long would the bank need to keep the loan documentation on file if Ms. Boyd did not accept the bank's counteroffer? Rochelle applied for a loan to purchase a car, but was denied because her credit score was too low. February 6, 2014 at 6:52 pm #5315. rcooper. It was supplemented with additional information. Federal Reserve. Rolf has seen four customers today who were applying for loans. The NCUA’s left provisions in 701.31(c)(5) that would still require FCUs to provide copies of appraisals upon request for member’s whose loan application was for a subordinate lien item. We also reference original research from other reputable publishers where appropriate. Which comment was a violation? Jerry's job includes many credit activities. Posted By: Dan Persfull Re: New Reg B Appraisal Notices & Copies - 08/06/14 03:20 PM. Carmen is interested in a home equity line secured by her home. Accessed Sept. 4, 2020. Posts. When his bank sends Josh the Regulation B required adverse action notice, what additional information must be included in that notice? The Consumer Financial Protection Bureau (Bureau) is now proposing a rule to implement those changes, which were enacted in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Regulation B is intended to prevent applicants from being discriminated against in any aspect of a credit transaction. Applications, Adverse Action & Appraisals/Evaluations . The rule … "Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B)," Page 2. The final rule issued in September 2013 adds comments to clarify the definition of valuation. Has Mark declined the loan? 3331 et seq. 4 Public Law 111–203, 124 Stat. This list also includes refinancing, credit applications, information requirements, standards of creditworthiness, investigation procedures, and revocation or termination of credit. By definition…that’s an appraisal. An application for credit that is to be secured by a first lien on a 1-4 family dwelling B. Common themes in performance appraisals focus on employee attitudes such as reliability, dependability, and integrity. To which credit file does the coverage of ECOA and Regulation B apply? 10. The results are as expected - most creditors are complying with the new rules but some seem a little confused by the requirements. The results are as expected - most creditors are complying with the new rules, but some creditors seemed to be a little confused by the requirements. Regulation B prohibits creditors from discriminating the creditworthiness of applicants with regard to their race, color, religion, national origin, sex, marital status, or age. To which type of credit does the coverage of ECOA and Regulation B apply? Reg B implements the Equal Credit Opportunity Act (ECOA), which is regulated and enforced by the Consumer Financial Protection Bureau (CFPB). The disclosure of an applicant's right to receive the appraisal must be mailed or delivered no later than what day? This means that the borrower can waive this timing requirement and agree to receive the updated copy at or before consummation. Home Appraisal Rules. Appraisal guidelines may be triggered in instances when a borrower requests a renewal of an existing loan and a new appraisal/evaluation will be produced. Errors in credit reports are fairly common, and many people only find out about them after being denied credit. The CFPB lists credit transactions and aspects of credit transactions to include consumer credit, business credit, mortgage, and open-end credit. Reg. Question: Some items of Form 8-K are triggered by the specified event occurring in relation to the “registrant” (such as Items 1.01, 1.02, 2.03, 2.04). Accessed Sept. 4, 2020. He asks if she would be agreeable to a loan for a lesser amount or for a shorter term. Which item is considered a valuation under Reg B rules that must be provided to his customer? Rather the rule follows the same risk-based review format of other Bank Secrecy Act (BSA) requirements. Now that the rules have been in place for a year reports of violations are filtering in from examiners and auditors. 9. The Regulation B 30-day rule sets forth the requirements of a financial institution for notifying applicants of their credit decision. Finally, he tells her she will need to include information about her race, sex, marital status, and age on the loan application. Joint intent must be evidenced at the time of application. Thus, we have to look at the definition of “application”, which can differ depending on which regulation you’re looking at. Chip knows, under Reg B revisions, that he is required to notify Jill in writing of her right to receive a copy of the appraisal or valuation. Betsy Call is an astute businesswoman with years of retail experience. The Reg B appraisal rules are triggered by what event? 10. All lenders are required to comply with Regulation B, which protects applicants from discrimination. Home appraisals are required for all first mortgages. Thus, we have to look at the definition of “application”, which can differ depending on which regulation you’re looking at. The new appraisal rules are effective for any mortgage loan application received on or after January 18, 2014. The age of a credit applicant can be considered under certain circumstances. The final rule increases the threshold level at or below which appraisals are not required for commercial real estate transactions from $250,000 to $500,000. Once people know the reason for the denial, there is a strong incentive to correct the credit reports and reapply. More importantly, it gives applicants the chance to correct the creditor's mistakes in evaluating the applicant's creditworthiness.. A. The loan being secured by a 1-4 dwelling is the triggering factor. In response to the recent mortgage crisis, Congress amended the Equal Credit Opportunity Act (ECOA) to require creditors to automatically provide applicants with a copy of appraisal reports and valuations prepared in connection with certain mortgage loans. Then he added, "I think filling this out is a waste of time—this bank will never loan money on such a risky venture." He is responsible for collecting and processing loan payments, answering questions from potential applicants, taking loan applications, determining credit evaluation criteria, and developing marketing materials. Regulation B is intended to prevent applicants from being discriminated against in any aspect of a credit transaction. 3. Viewing 2 posts - 1 through 2 (of 2 total) Author. 7. Furthermore, an applicant's age can be requested if it appears that they cannot legally sign a contract. The OCC, Board, and FDIC (collectively, the agencies) are adopting a final rule to amend the agencies' regulations requiring appraisals of real estate for certain transactions. 8. Appraisal Regulations Frequently Asked Questions Printable Format: FIL-62-2018 - PDF . Reg B also helps anyone who is denied credit by requiring lenders to give them an explanation. Karen inherited a house from her parents, who are now deceased. Investopedia uses cookies to provide you with a great user experience. 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