On Monday, the Consumer Financial Protection Bureau, Board of Governors of the Federal Reserve System, and Office of the Comptroller Currency announced that they were raising the threshold of loans exempt from special appraisal requirements for higher-priced mortgage loans (HPML). According to the CFPB, a loan is an HPML if it is secured by a consumer’s principal dwelling.
According to the notice, the threshold is increasing to $26,000 from $25,500. This will be effective on January 1, 2018 and is based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as of June 1, 2017.
This announcement updates requirements first passed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added special appraisal requirements for higher-priced mortgage loans. This included a requirement of a written appraisal based on a physical visit to the home interior.
To read more about recent updates to the appraisal industry, don’t miss MReport’s November feature Appraising the Appraisal. Penned by Mercury Network’s Jennifer Miller, this article explores how data and analytics are changing how appraisals are done. “Improved valuation modeling is a key area where you can focus by using data and analytics to drive information and decision making. Mortgage lenders now have new, readily available data at their fingertips that can help mitigate common appraisal issues,” says Miller.
To learn more about this rule change, click here.