Federal Agencies Issue Rule on Appraisals of Higher-Priced Mortgages
The Federal Reserve and five other federal financial regulatory agencies on January 18 issued appraisal requirements for higher-priced mortgage loans.
Under the new requirements, creditors must use a licensed or certified appraiser who writes a report after physically visiting the inside of the home. The rule also requires creditors to tell applicants why the appraisal is done and to give consumers a free copy of any appraisal report.
Amends Regulation Z
There are, of course, other provisions. If the seller acquired the property for a lower price during the prior six months and the price difference exceeds certain thresholds, creditors must obtain a second appraisal at no cost to the consumer. This requirement for higher-priced home-purchase mortgage loans is intended to address fraudulent property flipping by trying to ensure that the property value legitimately increased.
Several loan types exempt
The rule is being issued by the Board of Governors of the Federal Reserve System, 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.
February 6, 2013