New CFPB Proposed Changes: Part 2 – Regulations B & Z: Appraisal
Two hour tele-web seminar October 25, 2012

The CFPB recently proposed significant changes to Regulations B, Z and X. This three-part program explains the proposals in detail and what they will mean to your bank. Part 2 addresses proposed changes to appraisal rules.

This tele-web seminar will begin on Thursday, October 25, 2012 at 11:30 AM to 1:30 PM Pacific Time.

On August 15 the Consumer Financial Protection Bureau (CFPB) published two significant proposed rules to revise the Truth in Lending (TILA) and the Equal Credit Opportunity (ECOA) Acts related to mortgage appraisals.

TILA/Regulation Z – The Federal Reserve, the CFPB, FDIC, FHFA, NCUA and OCC jointly proposed to amend Regulation Z, to implement a Dodd-Frank Act provision requiring appraisals for “higher-risk mortgages.” Comments are due on or before October 15, 2012.

ECOA/Regulation B – The CFP published a 58-page proposal to implement a Dodd-Frank Act requirement that amends appraisal rules to inform applicants on how a creditor determines property value prior to closing. It will also make it easier for applicants to determine if a loan application was denied due to a discriminatory appraisal. Comments are due by October 15, 2012. The CFPB plans to finalize the rule by January 2013.

Note: Part 1 on October 18 deals with proposed changes to Mortgage Servicing Rules, and Part 3 on November 1 addresses Loan Originator Compensation Rules.


Regulation Z rules that:

  • Define a “higher-risk mortgage.”
  • Allow a creditor to make a higher-risk mortgage loan only if the following conditions are met:
  • The creditor obtains a written appraisal;
  • The appraisal is performed by a certified or licensed appraiser;
  • The appraiser conducts a physical visit of the interior of the property;
  • At application, the applicant is provided with a statement regarding the purpose of the appraisal, that the creditor will provide a copy of any written appraisal, and that the applicant may have a separate appraisal conducted at the applicant’s expense; and
  • The creditor provides the consumer with a free copy of any written appraisals at least three (3) business days before closing.

Regulation B rules that:

  • Limit the requirement to applications for credit to be secured by a first lien.
  • Require that creditors notify applicants within three business days of receiving an application of their right to receive a copy of written appraisals and valuations developed in connection with their application.
  • Require that creditors provide applicants a copy of all written appraisals and valuations promptly after receipt, but in no case later than three business days prior to closing.
  • Permit applicants to waive the timing requirement to receive copies three days prior to consummation, provided a copy of all written appraisals and valuations is provided at or prior to closing.
  • Prohibit creditors from charging additional fees for providing a copy of written appraisals and valuations, but permit creditors to charge applicants a reasonable fee to reimburse the creditor for the cost of the appraisal or valuation unless otherwise provided by law.


Loan originators, officers, assistants, compliance officers and auditors.


Jack Holzknecht, Pegasus Educational Services, LLC.

Credit Information

2.0 total credits


Member price: $250.00 | Non member price $500.00