Agencies Propose Rule Exempting Certain Mortgages from Appraisal Requirements
On Wednesday, July 10, 2013, the Board of Governors of the Federal Reserve System (the “Fed”), Bureau of Consumer Financial Protection, Federal Deposit Insurance Corporation, Federal Housing Finance Agency, National Credit Union Administration, and Office of the Comptroller of the Currency issued a proposed rule that would create exemptions from certain appraisal requirements for a subset of higher-priced mortgage loans.
This proposal relates to a final rule issued by the agencies on January 18, 2013, which is scheduled to become effective on January 18, 2014 (the “Final Rule”). The Final Rule implements Section 129H of the Truth in Lending Act, added Section 1471 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 129H requires appraisals for certain “higher-risk mortgages.” The proposed rule would amend the Final Rule creating exemptions from the appraisal requirement for: (1)transactions secured by existing manufactured homes and not land; (2) certain “streamlined” refinancings; and (3) transactions of $25,000 or less.
Read the Fed press release
Read the joint Federal Register notice