For a consummated higher-priced mortgage loan subject to Regulation Z1026.35(c)’s appraisal-copy requirement, when must the creditor provide the consumer each required written appraisal?
Correct Answer
C) No later than three business days before consummation
For a covered consummated HPML, provide each required appraisal no later than three business days before consummation. The consumer cannot waive this HPML timing requirement. Delivery rules, including receipt or presumed receipt, matter; simply mailing three days before consummation may be insufficient. If the loan is not consummated, provide the copy no later than thirty days after determining it will not be consummated.
Why This Is the Correct Answer
Option C is correct because, for a consummated covered HPML, the creditor must provide each required written appraisal no later than three business days prior to consummation. The consumer cannot waive this HPML timing requirement. Delivery rules matter, so the copy must be received or presumed received in time, not simply mailed three days ahead.
Why the Other Options Are Wrong
Option A: Only after the consumer requests it following consummation
Option A says the copy is given only after the consumer requests it following consummation. The HPML rule requires the creditor to provide the copy before consummation without waiting for a request.
Option B: No earlier than thirty days after consummation
Option B says no earlier than thirty days after consummation. The thirty-day period in the rule applies only to a loan that is not consummated, measured from when the creditor determines it will not be consummated; for a consummated loan the deadline is three business days before consummation.
Option D: At consummation whenever the consumer waives the three-day period
Option D allows delivery at consummation whenever the consumer waives the three-day period. The consumer cannot waive the HPML appraisal-copy timing requirement, so a waiver does not move delivery to consummation.
Three Before, Thirty If Not
Closing loan: three business days before consummation. Loan that does not close: thirty days after the creditor decides it will not close.
How to use: Use this to match the deadline to whether the HPML loan is consummated or not.
Exam Tip
Note that the HPML appraisal-copy timing cannot be waived by the consumer. An option relying on a waiver is a distractor for this rule.
Common Mistakes to Avoid
- -Believing the borrower can waive the three-day HPML timing requirement
- -Applying the thirty-day period to consummated loans
- -Assuming mailing three days before closing satisfies the deadline
Concept Deep Dive
Analysis
This question tests the timing rule in Regulation Z section 1026.35(c) for giving consumers copies of appraisals on higher-priced mortgage loans. The rule sets a deadline before consummation for consummated loans, and the consumer cannot waive it. Eliminate options that tie delivery to a consumer request, a post-closing delay or a waiver.
Background Knowledge
Regulation Z section 1026.35(c) sets special appraisal requirements for higher-priced mortgage loans, including giving consumers copies of required written appraisals. For a consummated loan, copies must be provided no later than three business days before consummation. If the loan is not consummated, copies are due no later than 30 days after the creditor determines it will not be consummated.
Real-World Application
A lender schedules closing on a higher-priced mortgage loan for a Friday and plans to mail the appraisal on Tuesday. Its compliance officer points out that mailed copies may not be presumed received in time, so the lender emails the appraisal earlier with the consumer's consent to electronic delivery. The copy reaches the borrower at least three business days before consummation.
More USPAP Questions
An appraiser signs, finalizes and electronically transmits a residential appraisal report to the client on March 15. Its value opinion has a March 1 effective date. The client does not open the transmitted report until March 20. What is the report date?
The Dodd-Frank Act's appraisal provisions primarily focus on:
According to AQB criteria, what is the minimum number of classroom hours of qualifying education required for a Certified Residential appraiser?
In a Fannie Mae appraisal, which item does not belong in the appraiser's site analysis?
After delivering a $485,000 URAR, an appraiser discovers a previously undisclosed $15,000 seller repair credit on a comparable sale that may materially change the analysis. What is the most appropriate response?
The special appraisal requirements in Regulation Z §1026.35(c), adopted under Dodd-Frank, concern which covered mortgage category?
A state appraiser regulatory agency is reviewing an appraiser's continuing education compliance. The appraiser completed 28 hours of continuing education in the current two-year period, including 5 hours of USPAP update training. Does this meet AQB requirements?
According to USPAP Standard 2, which of the following is NOT a required element in an appraisal report?
A client asks an appraiser to raise a completed report’s value conclusion by $15,000 solely to match the contract price, without providing new evidence. What should the appraiser do?
A comparable-sale grid includes a $5,000 bathroom adjustment. Which treatment best supports clear appraisal reporting?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Related Tools
Previous Question
For an assignment covered by Regulation Z’s customary-and-reasonable fee provisions, which proposed compensation term is inappropriate?
Next Question
In a federally related transaction, an appraiser discovers that the subject property has significant undisclosed structural damage that affects its value by $75,000. According to USPAP, the appraiser must: