BRIEF SUMMARY

On October 18, 2010, the Federal Reserve Board (“Board”) issued an interim final rule to implement the appraisal independence provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The interim final rule also implements the provisions of the Dodd-Frank Act that require creditors and their agents to pay customary and reasonable fees to fee appraisers. This client alert summarizes the Board’s rule and discusses its ramifications for mortgage lenders.

HISTORY AND SCOPE

Section 1472 of the Dodd-Frank Act added a new Section 129E to the federal Truth-in-Lending Act (“TILA”) to impose appraisal independence requirements for a consumer credit transaction secured by the principal dwelling of the consumer. A detailed discussion of Section 1472 is found in our Dodd-Frank Residential Mortgage User Guide.