Reg Z (R-1443) NFRM Press Release

Printer Version - Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/newsevents/press/bcreg/20130118a.htm

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.

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Printer Version - Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/newsevents/press/bcreg/20130118a.htm

Media Contacts:
Federal Reserve Board

Susan Stawick

(202) 452-2955

CFPB

Moira Vahey

(202) 435-9151

FDIC

Greg Hernandez

(202) 898-6984

FHFA

Stefanie Johnson

(202) 649-3030

NCUA

Kenzie Snowden

(703) 518-6334

OCC

Stephanie Collins

(202) 649-6870

Attachment (1.1 MB PDF)

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