Ever wonder how appraisers come up with valuations for properties? The previously closed process that sometimes leaves Worcester homeowners scratching their heads has recently been unlocked by the passage of a new federal rule.
Changes to the Equal Credit Opportunity Act now require mortgage lenders to share any and all information with loan applicants that is used in determining how large of loans the lenders will fund. While some prospective buyers may not see the immediate benefit of getting more paperwork from mortgage lenders, the potential advantages of the new rule are replete and may help some individuals avoid real estate disputes.
For example, individuals who believe that the valuations on their prospective properties are wrong can now review all of the information that the lenders’ appraisers used to determine loan amounts. The timeline by which a lender must provide an applicant with the paperwork and established by the new rule also permits the applicant sufficient time to bring errors to the lender’s attention.
Addressing valuation problems before closing can save both lenders and prospective home buyers significant time and stress. However, this rule does not apply to second mortgages or other non-first lien loans taken out against properties. Homeowners can always ask their lenders for the valuation paperwork on such loans if they would like copies of it.
Homeowners know that residential property disputes between lenders and themselves are not uncommon. Hopefully this new federal rule will give homeowners more power in the mortgage valuation process. Individuals who are interested in learning more about this rule and others that affect their rights as homeowners may consider working with real estate attorneys. Lawyers who specialize in residential property transactions can help homeowners work through their questions about real estate contracts, lending and other real property matters.
Source: Hartford Courant, “New rule will help challenges to appraisals,” Ken Harney, Jan. 18, 2014