Appraisal Exemptions Proposed for High-Priced Loans

Regulatorsrnare proposing to exempt three types of loans from some of thernappraisal requirements for so-called higher priced mortgages. Thernrequirements are mandated by the Dodd-Frank Wall Street Reform andrnConsumer Protection Act for mortgages loans which are considered tornbe higher priced if they are secured by the borrower’s home and haverninterest rates above a certain threshhold. </p

Thernproposed exemptions do not affect the majority of residential loansrncovered under the regulation which goes into affect on January 18,rn2014. Proposed for exemption from the appraisal requirements are:</p<ul<li

Transactionsrnsecured solely by an existing manufactured home and not land. Thernagencies propose to retain the appraisal requirement for loansrnsecured by new manufactured homes but are seeking further commentsrnon the scope of the exemption, whether certain conditions on thernexemption might be appropriate, and if an alternative valuationrnshould be required.</p</li<li

Certain types of refinancings with characteristics common to what arerncommonly called “streamlined” refinances. Specificallyrnthe agencies propose to exempt a loan where the borrower orrnguarantor of the new loan is also the borrower or guarantor of thernloan being refinanced. The new loan must not result in negativernamortization, be an interest only loan, or result in a balloonrnpapyment. Finally, the refinancing must not result in “cash-out”rnto the borrower or guarantor.</p</li<li

Extensionsrnof credit of $25,000 or less with that amount indexed every year forrninflation.</p</li</ul

Thernsix regulatory agencies, the Federal Reserve System, ConsumerrnFinancial Protection Bureau, Federal Deposit Insurance Corporation,rnFederal Housing Finance Agency, National Credit Union Administration,rnand the Office of Comptroller of the Currency, are inviting publicrncomment on the proposed exemptions. The deadline for those commentrnis September 9, 2013. </p

Inrnannouncing the proposed exemption the agencies state they arernintended to save borrowers time and money and to promote the safetyrnand soundness of creditors and are being issued in response to publicrncomments previously received. The exemptions are proposed to go intorneffect at the same time as the governing rule, however the agenciesrnsay that if they should adopt any conditions affecting the exemptionsrnthey will consider establishing a later date for the conditions tornallow creditors time to plan their compliance.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.