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.
Alert December 23, 2013