With the new ECOA Appraisal Rule officially in effect for some time now, many within the mortgage industry know the importance of delivering their appraisal reports to the borrower on time, every time. However, many industry participants have overlooked a key mandate, which requires lenders to also “obtain the applicant’s consent [to receive an electric copy of the document] under the Electronic Signatures in Global National Commerce Act (E-Sign Act)”.
If you, like many others, have only focused on the timing of the appraisal’s delivery to the borrower, then you have been missing a key step in your compliance with ECOA. Whenever you deliver files to a borrower electronically—a.k.a. by email—the new E-Sign Act in accordance with ECOA requires:
- That the applicant consents to receive the document electronically.
- The applicant must be provided with an accurate statement of the hardware and software requirements for successful receipt of the electronic document.
- Confirmation that the applicant can download and view the PDF must be made prior to them downloading the document.
Fortunately, technology does exist to help make this a seamless process, where there is no threat of falling out of compliance and facing stiff penalties. Global DMS’ eTrac® Appraisal Management Platform is now equipped with the new PDF Verification App, which requires borrowers to click a link within the appraisal delivery email to view a validation code.
How does this work?
When the borrower clicks on the “Get Validation Code” link within the appraisal delivery email that’s sent by eTrac, they will be presented with a PDF that includes a validation code. This PDF will only be displayed if the borrower’s electronic device is able to download and view PDF documents.
Instructions will also be presented within the PDF on how to return to the email that contains the link to the actual appraisal report. The borrower must click this link and then enter the validation code and their electronic signature on the Borrower File Delivery Acknowledgement screen. This not only demonstrates their ability to open and view the electronic PDF copy of the appraisal report on their computer or device, but shows their acknowledgement that they are both able and willing to view PDF documents.
All downloads that are initiated by the borrower are then logged in eTrac for tracking and audit purposes so the lender has a permanent record of when the borrower downloaded the appraisal report.
If your current appraisal compliance process has you stressed, please feel free to contact us at any time for a free consultation by sending an email to email@example.com or clicking the button below.