A proposed rule was issued by six federal financial regulatory agencies that would create exemptions from specific appraisal requirements for a subset of higher-priced mortgages.
The proposed exemptions would save borrowers both time and money as well as promote the safety and soundness of creditors.
The Dodd-Frank Act imposed appraisal requirements for high-priced mortgages. Under the act, loans are deemed “higher-priced” if they are secured by a consumer’s home and have interest rates above a certain threshold.
The rule proposed would allow the following three types of higher-priced mortgage loans to be exempt from the Dodd-Frank Act appraisal requirements: loans of $25,000 or less, certain streamlined refinancing and certain loans secured by manufactured housing.
In January, the Federal Reserve Board, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration, and the Office of the Comptroller of the Currency issued a final rule implementing the new Dodd-Frank Act appraisal requirements.
As of January 18, 2014, compliance with the final rule will become mandatory. The agencies listed above are jointly issuing the proposed rule on additional exemptions in response to public comments received previously.
Public comments are encouraged by the agencies on all aspects of the proposal. The public will have until September 9, 2013, to review and comment on most of the proposal. However, comments linked to the proposed Paperwork Reduction Act analysis will be due 60 days after the rule is published in the Federal Register.