A
new appraisal rule has been 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.
Effective January 18, 2014, the
final rule was issued on new appraisal requirements for Higher-priced mortgage
loans (HPML).
A
licensed appraiser must provide a written appraisal based n a physical visit to
the property, creditors must disclose the purpose of the appraisal and
applicants will be given a free copy.
If
seller bought the property within six months and the current price exceeds a
threshold written into the new rule, the creditor must also pay for a second
appraisal. This is intended to cut down
on fraudulent property flipping by ensuring the property value has legitimately
increased. The types of exempt loans
include qualified mortgages, temporary bridge and construction loans, loans for
new manufactured homes and loans for mobile homes, trailers and
houseboats. Some rural areas and other
transactions are exempt.
The complete rule can be downloaded from the Federal Reserve’s website.
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