Federal Regulators Amend Appraisal Requirements for Higher-Priced Mortgages

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Collectively, the FDIC, the OCC, FRB, CFPB, NCUA, FHFA and HUD finalized the rule governing appraisal requirements for higher-priced mortgage loans. In August 2013, the federal regulators issued a proposal to amend Regulation Z to create additional exemptions from the appraisal requirements for higher-priced mortgage loans (see August 20, 2013 Alert). Section 1471 of the Dodd-Frank Act prohibits lenders from making certain higher-risk mortgages without first obtaining an appraisal that meets certain conditions (e.g., appraisal made by a certified or licensed appraiser). The final rule adopts the exemptions from the appraisal requirements for certain types of refinancings (i.e., “streamlined” refinancings) and transactions of $25,000 or less. The rule also temporarily exempts all loans secured in whole or in part by a manufactured home for 18 months—July 18, 2015—from the appraisal requirements. The final rule is effective January 18, 2014. 

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Topics:  CFPB, Dodd-Frank, FDIC, Federal Reserve, FHFA, Higher-Priced Mortgage Loans, HUD, Mortgages, NCUA, OCC

Published In: Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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