Joint Release
Board of Governors of the Federal Reserve
System
Consumer Financial Protection Bureau
Federal Deposit Insurance Corporation
Federal Housing Finance Agency
National Credit Union Administration
Office of the Comptroller of the Currency
For Immediate Release January 18, 2013
Agencies Issue Final Rule on Appraisals for Higher-priced Mortgage Loans
WASHINGTON— Six federal financial regulatory agencies today issued the final rule
that establishes new appraisal requirements for "higher-priced mortgage loans." The
rule implements amendments to the Truth in Lending Act made by the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Under the
Dodd-Frank Act, mortgage loans are higher-priced if they are secured by a consumer's
home and have interest rates above certain thresholds.
For higher-priced mortgage loans, the rule requires creditors to use a licensed or
certified appraiser who prepares a written appraisal report based on a physical visit of
the interior of the property. The rule also requires creditors to disclose to applicants
information about the purpose of the appraisal and provide consumers with a free copy
of any appraisal report.
If the seller acquired the property for a lower price during the prior six months and the
price difference exceeds certain thresholds, creditors will have to 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 seeking to ensure
that the value of the property legitimately increased.
The rule exempts several types of loans, such as qualified mortgages, temporary bridge
loans and construction loans, loans for new manufactured homes, and loans for mobile
homes, trailers and boats that are dwellings. The rule also has exemptions from the
second appraisal requirement to facilitate loans in rural areas and other transactions.
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. The Federal Register notice is attached. The
rule will become effective on January 18, 2014.
In response to public comments, the agencies intend to publish a supplemental
proposal to request additional comment on possible exemptions for "streamlined"
refinance programs and small dollar loans, as well as to seek clarification on whether
the rule should apply to loans secured by existing manufactured homes and certain
other property types.
Board of Governors of the Federal Reserve
System
Consumer Financial Protection Bureau
Federal Deposit Insurance Corporation
Federal Housing Finance Agency
National Credit Union Administration
Office of the Comptroller of the Currency
For Immediate Release January 18, 2013
Agencies Issue Final Rule on Appraisals for Higher-priced Mortgage Loans
WASHINGTON— Six federal financial regulatory agencies today issued the final rule
that establishes new appraisal requirements for "higher-priced mortgage loans." The
rule implements amendments to the Truth in Lending Act made by the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Under the
Dodd-Frank Act, mortgage loans are higher-priced if they are secured by a consumer's
home and have interest rates above certain thresholds.
For higher-priced mortgage loans, the rule requires creditors to use a licensed or
certified appraiser who prepares a written appraisal report based on a physical visit of
the interior of the property. The rule also requires creditors to disclose to applicants
information about the purpose of the appraisal and provide consumers with a free copy
of any appraisal report.
If the seller acquired the property for a lower price during the prior six months and the
price difference exceeds certain thresholds, creditors will have to 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 seeking to ensure
that the value of the property legitimately increased.
The rule exempts several types of loans, such as qualified mortgages, temporary bridge
loans and construction loans, loans for new manufactured homes, and loans for mobile
homes, trailers and boats that are dwellings. The rule also has exemptions from the
second appraisal requirement to facilitate loans in rural areas and other transactions.
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. The Federal Register notice is attached. The
rule will become effective on January 18, 2014.
In response to public comments, the agencies intend to publish a supplemental
proposal to request additional comment on possible exemptions for "streamlined"
refinance programs and small dollar loans, as well as to seek clarification on whether
the rule should apply to loans secured by existing manufactured homes and certain
other property types.
# # #
Attachment:
Appraisals for Higher-Priced Mortgage Loans - PDF (PDF Help)
Media Contacts:
Federal Reserve Susan Stawick (202) 452-2955
CFPB Moira Vahey (202) 435-9151
FDIC Greg Hernandez (202) 898-6993
FHFA Stefanie Johnson (202) 649-3030
NCUA Kenzie Snowden (703) 518-6334
OCC Stephanie Collins (202) 649-6870
FDIC-PR-4-2013
Attachment:
Appraisals for Higher-Priced Mortgage Loans - PDF (PDF Help)
Media Contacts:
Federal Reserve Susan Stawick (202) 452-2955
CFPB Moira Vahey (202) 435-9151
FDIC Greg Hernandez (202) 898-6993
FHFA Stefanie Johnson (202) 649-3030
NCUA Kenzie Snowden (703) 518-6334
OCC Stephanie Collins (202) 649-6870
FDIC-PR-4-2013