Vol. 78 Thursday,
No. 248 December 26, 2013
Part II
Department of the Treasury
Office of the Comptroller of the Currency
Board of Governors of the Federal Reserve
System
Bureau of Consumer Financial Protection
12 CFR Parts 34, 226, and 1026
Appraisals for Higher-Priced Mortgage Loans; Final Rule
VerDate Mar<15>2010 18:30 Dec 24, 2013 Jkt 232001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\26DER2.SGM 26DER2
tkelley on DSK3SPTVN1PROD with RULES2
No. 248 December 26, 2013
Part II
Department of the Treasury
Office of the Comptroller of the Currency
Board of Governors of the Federal Reserve
System
Bureau of Consumer Financial Protection
12 CFR Parts 34, 226, and 1026
Appraisals for Higher-Priced Mortgage Loans; Final Rule
VerDate Mar<15>2010 18:30 Dec 24, 2013 Jkt 232001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\26DER2.SGM 26DER2
tkelley on DSK3SPTVN1PROD with RULES2
78520 Federal Register / Vol. 78, No. 248 / Thursday, December 26, 2013 / Rules and Regulations
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 34
[Docket No. OCC–2013–0009]
RIN 1557–AD70
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R–1443]
RIN 7100–AD90
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
[Docket No. CFPB–2013–0020]
RIN 3170–AA11
Appraisals for Higher-Priced Mortgage
Loans
AGENCY: Board of Governors of the
Federal Reserve System (Board); Bureau
of Consumer Financial Protection
(Bureau); Federal Deposit Insurance
Corporation (FDIC); Federal Housing
Finance Agency (FHFA); National
Credit Union Administration (NCUA);
and Office of the Comptroller of the
Currency, Treasury (OCC).
ACTION: Supplemental final rule; official
staff commentary.
SUMMARY: The Board, Bureau, FDIC,
FHFA, NCUA, and OCC (collectively,
the Agencies) are amending Regulation
Z, which implements the Truth in
Lending Act (TILA), and the official
interpretation to the regulation. This
final rule supplements a final rule
issued by the Agencies on January 18,
2013, which goes into effect on January
18, 2014. The January 2013 Final Rule
implements a provision added to TILA
by the Dodd-Frank Wall Street Reform
and Consumer Protection Act (the
Dodd-Frank Act or Act) requiring
appraisals for ‘‘higher-risk mortgages.’’
For certain mortgages with an annual
percentage rate that exceeds the average
prime offer rate by a specified
percentage, the January 2013 Final Rule
requires creditors to obtain an appraisal
or appraisals meeting certain specified
standards, provide applicants with a
notification regarding the use of the
appraisals, and give applicants a copy of
the written appraisals used. On July 10,
2013, the Agencies proposed
amendments to the January 2013 Final
Rule implementing these requirements.
Specifically, the Agencies proposed
exemptions from the rules for
transactions secured by existing
manufactured homes and not land;
certain streamlined refinancings; and
transactions of $25,000 or less.
DATES: This final rule is effective on
January 18, 2014. Alternative provisions
regarding manufactured home loans in
amendatory instructions 3b and 5f (12
CFR 34.203(b)(8) and 12 CFR part 34,
appendix C, 34.203(b)(8) entry OCC), 12
CFR 226.43(b)(8) Board, and 12 CFR
1026.35(c)(2)(viii) CFPB, are effective
July 18, 2015.
FOR FURTHER INFORMATION CONTACT:
OCC: Robert L. Parson, Appraisal Policy
Specialist, at (202) 649–6423, G. Kevin
Lawton, Appraiser (Real Estate
Specialist), at (202) 649–7152, Charlotte
M. Bahin, Senior Counsel or Mitchell
Plave, Special Counsel, Legislative &
Regulatory Activities Division, at (202)
649–5490, Krista LaBelle, Special
Counsel, Community and Consumer
Law Division, at (202) 649–6350, or 400
Seventh Street SW., Washington, DC
20219.
Board: Lorna Neill or Mandie Aubrey,
Counsels, Division of Consumer and
Community Affairs, at (202) 452–3667,
Carmen Holly, Supervisory Financial
Analyst, Division of Banking
Supervision and Regulation, at (202)
973–6122, or Kara Handzlik, Counsel,
Legal Division, at (202) 452–3852, Board
of Governors of the Federal Reserve
System, Washington, DC 20551.
FDIC: Beverlea S. Gardner, Senior
Examination Specialist, Risk
Management Section, at (202) 898–3640,
Sandra S. Barker, Senior Policy Analyst,
Division of Consumer Protection, at
(202) 898–3615, Mark Mellon, Counsel,
Legal Division, at (202) 898–3884,
Kimberly Stock, Counsel, Legal
Division, at (202) 898–3815, or
Benjamin Gibbs, Senior Regional
Attorney, at (678) 916–2458, Federal
Deposit Insurance Corporation, 550 17th
St, NW., Washington, DC 20429.
NCUA: John Brolin, Staff Attorney,
Office of General Counsel, at (703) 518–
6540, or Vincent Vieten, Program
Officer, Office of Examination and
Insurance, at (703) 518–6360, or 1775
Duke Street, Alexandria, Virginia,
22314.
Bureau: Owen Bonheimer, Counsel,
or William W. Matchneer, Senior
Counsel, Division of Research, Markets,
and Regulations, Bureau of Consumer
Financial Protection, 1700 G Street NW.,
Washington, DC 20552, at (202) 435–
7000.
FHFA: Robert Witt, Senior Policy
Analyst, at 202–649–3128, or Ming-
Yuen Meyer-Fong, Assistant General
Counsel, Office of General Counsel,
(202) 649–3078, Federal Housing
Finance Agency, 400 Seventh Street
SW., Washington, DC 20024.
SUPPLEMENTARY INFORMATION:
I. Summary of the Final Rule
As discussed in detail under part II of
this SUPPLEMENTARY INFORMATION,
section 1471 of the Dodd-Frank Act
created new TILA section 129H, which
establishes special appraisal
requirements for ‘‘higher-risk
mortgages.’’ 15 U.S.C. 1639h. The
Agencies adopted a final rule on January
18, 2013 (January 2013 Final Rule; 78
FR 10368 (Feb. 13, 2013)) to implement
these requirements (adopting the term
‘‘higher-priced mortgage loans’’
(HPMLs) instead of ‘‘higher-risk
mortgages’’). The Agencies believe that
several additional exemptions from the
new appraisal rules are appropriate.
Specifically, the Agencies are adopting
exemptions for certain types of
refinancings and transactions of $25,000
or less (indexed for inflation). The
Agencies are also adopting a temporary
exemption of 18 months (until July 18,
2015) for all loans secured in whole or
in part by a manufactured home.
Starting on July 18, 2015, transactions
secured by a new manufactured home
and land will be exempt from the
requirement that the appraisal include a
physical inspection of the interior of the
property; transactions secured by an
existing (used) manufactured home and
land will not be exempt from the rules;
and transactions secured solely by a
manufactured home and not land will
be exempt from the rules if the creditor
gives the consumer one of three types of
information about the home’s value,
discussed in more detail below.
The Agencies are not adopting the
proposed definition of ‘‘business day’’
that would have differed from the
definition used in the January 2013
Final Rule. A revision to the exemption
for ‘‘qualified mortgages’’ is adopted
that is similar to the proposed revision,
as well as a few proposed non-
substantive technical corrections.
A. Exemption for Extensions of Credit of
$25,000 or Less
The Agencies are adopting without
change the proposed exemption from
the HPML appraisal rules for extensions
of credit of $25,000 or less, indexed
every year for inflation.
B. Exemption for Certain Refinancings
The Agencies also are adopting an
exemption from the HPML appraisal
rules for certain types of refinancings
with characteristics common to
refinance products often referred to as
VerDate Mar<15>2010 18:30 Dec 24, 2013 Jkt 232001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\26DER2.SGM 26DER2
tkelley on DSK3SPTVN1PROD with RULES2
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 34
[Docket No. OCC–2013–0009]
RIN 1557–AD70
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R–1443]
RIN 7100–AD90
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
[Docket No. CFPB–2013–0020]
RIN 3170–AA11
Appraisals for Higher-Priced Mortgage
Loans
AGENCY: Board of Governors of the
Federal Reserve System (Board); Bureau
of Consumer Financial Protection
(Bureau); Federal Deposit Insurance
Corporation (FDIC); Federal Housing
Finance Agency (FHFA); National
Credit Union Administration (NCUA);
and Office of the Comptroller of the
Currency, Treasury (OCC).
ACTION: Supplemental final rule; official
staff commentary.
SUMMARY: The Board, Bureau, FDIC,
FHFA, NCUA, and OCC (collectively,
the Agencies) are amending Regulation
Z, which implements the Truth in
Lending Act (TILA), and the official
interpretation to the regulation. This
final rule supplements a final rule
issued by the Agencies on January 18,
2013, which goes into effect on January
18, 2014. The January 2013 Final Rule
implements a provision added to TILA
by the Dodd-Frank Wall Street Reform
and Consumer Protection Act (the
Dodd-Frank Act or Act) requiring
appraisals for ‘‘higher-risk mortgages.’’
For certain mortgages with an annual
percentage rate that exceeds the average
prime offer rate by a specified
percentage, the January 2013 Final Rule
requires creditors to obtain an appraisal
or appraisals meeting certain specified
standards, provide applicants with a
notification regarding the use of the
appraisals, and give applicants a copy of
the written appraisals used. On July 10,
2013, the Agencies proposed
amendments to the January 2013 Final
Rule implementing these requirements.
Specifically, the Agencies proposed
exemptions from the rules for
transactions secured by existing
manufactured homes and not land;
certain streamlined refinancings; and
transactions of $25,000 or less.
DATES: This final rule is effective on
January 18, 2014. Alternative provisions
regarding manufactured home loans in
amendatory instructions 3b and 5f (12
CFR 34.203(b)(8) and 12 CFR part 34,
appendix C, 34.203(b)(8) entry OCC), 12
CFR 226.43(b)(8) Board, and 12 CFR
1026.35(c)(2)(viii) CFPB, are effective
July 18, 2015.
FOR FURTHER INFORMATION CONTACT:
OCC: Robert L. Parson, Appraisal Policy
Specialist, at (202) 649–6423, G. Kevin
Lawton, Appraiser (Real Estate
Specialist), at (202) 649–7152, Charlotte
M. Bahin, Senior Counsel or Mitchell
Plave, Special Counsel, Legislative &
Regulatory Activities Division, at (202)
649–5490, Krista LaBelle, Special
Counsel, Community and Consumer
Law Division, at (202) 649–6350, or 400
Seventh Street SW., Washington, DC
20219.
Board: Lorna Neill or Mandie Aubrey,
Counsels, Division of Consumer and
Community Affairs, at (202) 452–3667,
Carmen Holly, Supervisory Financial
Analyst, Division of Banking
Supervision and Regulation, at (202)
973–6122, or Kara Handzlik, Counsel,
Legal Division, at (202) 452–3852, Board
of Governors of the Federal Reserve
System, Washington, DC 20551.
FDIC: Beverlea S. Gardner, Senior
Examination Specialist, Risk
Management Section, at (202) 898–3640,
Sandra S. Barker, Senior Policy Analyst,
Division of Consumer Protection, at
(202) 898–3615, Mark Mellon, Counsel,
Legal Division, at (202) 898–3884,
Kimberly Stock, Counsel, Legal
Division, at (202) 898–3815, or
Benjamin Gibbs, Senior Regional
Attorney, at (678) 916–2458, Federal
Deposit Insurance Corporation, 550 17th
St, NW., Washington, DC 20429.
NCUA: John Brolin, Staff Attorney,
Office of General Counsel, at (703) 518–
6540, or Vincent Vieten, Program
Officer, Office of Examination and
Insurance, at (703) 518–6360, or 1775
Duke Street, Alexandria, Virginia,
22314.
Bureau: Owen Bonheimer, Counsel,
or William W. Matchneer, Senior
Counsel, Division of Research, Markets,
and Regulations, Bureau of Consumer
Financial Protection, 1700 G Street NW.,
Washington, DC 20552, at (202) 435–
7000.
FHFA: Robert Witt, Senior Policy
Analyst, at 202–649–3128, or Ming-
Yuen Meyer-Fong, Assistant General
Counsel, Office of General Counsel,
(202) 649–3078, Federal Housing
Finance Agency, 400 Seventh Street
SW., Washington, DC 20024.
SUPPLEMENTARY INFORMATION:
I. Summary of the Final Rule
As discussed in detail under part II of
this SUPPLEMENTARY INFORMATION,
section 1471 of the Dodd-Frank Act
created new TILA section 129H, which
establishes special appraisal
requirements for ‘‘higher-risk
mortgages.’’ 15 U.S.C. 1639h. The
Agencies adopted a final rule on January
18, 2013 (January 2013 Final Rule; 78
FR 10368 (Feb. 13, 2013)) to implement
these requirements (adopting the term
‘‘higher-priced mortgage loans’’
(HPMLs) instead of ‘‘higher-risk
mortgages’’). The Agencies believe that
several additional exemptions from the
new appraisal rules are appropriate.
Specifically, the Agencies are adopting
exemptions for certain types of
refinancings and transactions of $25,000
or less (indexed for inflation). The
Agencies are also adopting a temporary
exemption of 18 months (until July 18,
2015) for all loans secured in whole or
in part by a manufactured home.
Starting on July 18, 2015, transactions
secured by a new manufactured home
and land will be exempt from the
requirement that the appraisal include a
physical inspection of the interior of the
property; transactions secured by an
existing (used) manufactured home and
land will not be exempt from the rules;
and transactions secured solely by a
manufactured home and not land will
be exempt from the rules if the creditor
gives the consumer one of three types of
information about the home’s value,
discussed in more detail below.
The Agencies are not adopting the
proposed definition of ‘‘business day’’
that would have differed from the
definition used in the January 2013
Final Rule. A revision to the exemption
for ‘‘qualified mortgages’’ is adopted
that is similar to the proposed revision,
as well as a few proposed non-
substantive technical corrections.
A. Exemption for Extensions of Credit of
$25,000 or Less
The Agencies are adopting without
change the proposed exemption from
the HPML appraisal rules for extensions
of credit of $25,000 or less, indexed
every year for inflation.
B. Exemption for Certain Refinancings
The Agencies also are adopting an
exemption from the HPML appraisal
rules for certain types of refinancings
with characteristics common to
refinance products often referred to as
VerDate Mar<15>2010 18:30 Dec 24, 2013 Jkt 232001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\26DER2.SGM 26DER2
tkelley on DSK3SPTVN1PROD with RULES2