Final answer:
The "Notice of Right to Receive an Appraisal" must be delivered to the consumer within 3 business days of receiving the application. This is a requirement under the Equal Credit Opportunity Act to ensure fair treatment of consumers in property-secured lending. Lenders must also provide the appraisal report itself in a timely manner, either promptly after completion or three days before loan closing, whichever is earlier.
Step-by-step explanation:
The "Notice of Right to Receive an Appraisal" is mandated by the Equal Credit Opportunity Act (ECOA) and is part of the regulation that ensures consumers are treated fairly by lenders when they apply for credit on the basis of property-secured loans.
The rule states that the consumer must receive this notice within 3 business days after the creditor has received the consumer's application. This notice informs the consumer that they have the right to receive a copy of the appraisal report used in the evaluation of the application and reminds the creditor that they cannot charge for this copy.
Ensuring that this notice is delivered within the required timeframe is crucial for regulatory compliance. Failure to deliver this notice as required could result in regulatory penalties and potential legal risks for the lender. It's important for all financial services professionals and consumers to understand the timelines and rights associated with the lending process.
Lenders must also send the appraisal report itself promptly after it has been completed, or at least three days before the closing of the loan, whichever is earlier, giving the consumer an opportunity to review the document and to understand how the property was valued.