Alert August 20, 2013

CFPB and Federal Agencies Propose Amendments to Appraisal Rule for Higher-Priced Mortgages

The CFPB and five other federal regulators—the FRB, FDIC, FHFA, NCUA, and OCC—issued a proposal to further amend Regulation Z, with regard to appraisal requirements for a subset of higher-priced mortgage loans. The agencies previously amended Regulation Z with respect to higher-priced mortgage loans to change the escrow maintenance requirements (see January 22, 2013 Alert) and create exemptions from certain appraisal requirements (see July 23, 2013 Alert). This proposal seeks to create additional exemptions from the appraisal requirements for higher-priced mortgage loans for: (1) transactions secured solely by existing manufactured homes and not land, (2) “streamlined” refinancings, specifically those where the owner or guarantor of the refinancing is the owner or guarantor of the existing obligation and other requirements are met, and (3) extensions of credit of $25,000 or less. The agencies seek comment on over 50 questions raised in the proposal, including matters such as whether to place additional conditions on the transactions proposed for exemption and input on existing and alternative valuation methods. Comments must be received on or before September 9, 2013.