Due to investor requirements, we are currently providing Cx14078 (AIR Verification of Receipt of Appraisal) and 15224, in which the borrower is informed that they will be provided with copies of their appraisals no less than three business days before closing, but that they may waive this timing requirement and elect to receive these copies at closings.
These documents have been provided due to Section III of Fannie Mae’s “Appraiser Independence Requirements” (AIR). Investors have required our AIR Verification of Receipt of Appraisal, to ensure that lenders have properly given copies of the appraisals at the appropriate times, as well as to have documentation of whether the borrower waived or not the timing requirements for receiving copies.
While the AIR is still applicable and in-force by Fannie Mae, it is superseded by the new appraisal requirements under Regulation B (12 CFR § 1002.14) and Regulation Z (Ibid. § 1026.35[c]) for first lien loans and higher-risk mortgages (HRM-HPMLs), respectively. In essence, this means that different requirements apply to different loans, as illustrated in the following chart:
Due to these requirements, we have created two new documents (Cx18182 and 18183), which will print dynamic text to match these various requirements, and will replace Cx14078 and 15224. The content of Cx18183 is discussed in this article, while the content of Cx18182 is discussed in a corresponding one.
First Lien Waiver/Receipt Form (Cx18183)
This document will be used to conform with the appraisal requirements of Regulation B (for regular first lien loans) and Regulation Z (for first lien HRM-HPMLs). It will print when:
1. “Application Taken On or After 01/18/2014” equals “Yes”;
2. “Document Package Type” equals one of the following:
a. Initial Disclosure
c. TILA Redisclosure
3. “Lien Position” equals “FirstLien”; and
4. “Print Appraisal/AVM Waiver/Receipt Form” equals “Yes.”
The text of the document will differ depending on which package it prints in and whether the loan is a regular or higher-risk one.
For regular first lien loans, the text in the Initial Disclosure package will briefly inform the borrower of the fact that he will receive a copy of all appraisal and valuation reports promptly upon completion, but no later than three business days before closing. It will also inform the borrower that he may waive these timing requirements, under certain circumstances.
The text of the document will then allow the borrower to elect to either receive the appraisal/valuation reports according to Regulation B’s timing requirements, to waive such timing requirements for all reports, or to waive it in regards to reports which are re-issued due to clerical errors.
For HRM-HPMLs, the text of the document will simply inform the borrower that they’ll receive a copy of the appraisal report(s) at least three business days before closing. Due to 12 CFR Pt. 1026, Supp. I, Paragraph 36(c)(6)(ii) – (3), no waiver language will be included, since the borrower may not waive the timing requirements imposed under Regulation Z.
For regular first lien loans, the text in this package will reiterate the disclosure of the borrower’s rights as set forth in the Initial Disclosure-text version. It will then allow the borrower to sign an acknowledgment, in which he acknowledges receipt of a copy of his appraisal and/or valuation report(s) (which will be sent in the Appraisal package). It will then allow the borrower to elect to continue following Regulation B’s timing requirements or to waive them for any subsequent appraisal or valuation reports which may be made.
For HRM-HPMLs, the text of the document will also reiterate the borrower’s rights, as previously disclosed. It will also contain an acknowledgment for the borrower to sign, in which they affirm receiving a copy of the appraisal report.
For regular first lien loans, there will (again) be text reiterating the borrower’s rights, as previously disclosed. The borrower may then elect to continue following Regulation B’s timing requirements or to waive them for subsequent appraisal or valuation reports.
For HRM-HPMLs, there will be text reiterating the borrower’s right, as previously disclosed in the Initial Disclosure-version of the document.
For regular first lien loans, the text concerning the borrower’s rights will again appear. However, instead of the timing options, there will be selections for the borrower to indicate which timing requirement they elected to follow, as well as an acknowledgment that they received copies of the appraisal and/or valuation report(s) within the time period elected.
For HRM-HPMLs, there will be the text reiterating the borrower’s rights, as previously disclosed. Following such will be an acknowledgment where the borrower affirms that they received a copy of all appraisal reports at least three business days prior to closing.
This new disclosure is now available in the ConformX Production environment. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
January 15, 2014