Exemptions to a rule that goes into effect next month on appraisal requirements for higher-priced mortgages have been finalized. Special provisions were made for financing manufactured home.
As required by the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, a final rule on appraisal requirements for higher-priced loans was finalized by the Consumer Financial Protection Bureau last January.
But in July, the CFPB — along with the Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve Board, National Credit Union Administration and Office of the Comptroller of the Currency — proposed exemptions from certain appraisal requirements for a subset of higher-priced home loans.
On Thursday, the proposed exemptions were included in a final rule. The rule goes into effect on Jan. 18, 2014.
A joint announcement from the regulators indicated that the exemptions are intended to save borrowers time and money while still ensuring that the loans are financially sound.
Loans that don’t exceed $25,000 are exempted from the appraisal requirements. Also exempted are certain streamlined refinances.
Special provisions in the final rule for manufactured homes won’t go into effect for 18 months as creditors make the necessary adjustments.
The notice indicated that manufactured homes can present unique issues in n determining the appropriate valuation method, and access to affordable housing options needs to be preserved.
“Starting on July 18, 2015, loans secured by an existing manufactured home and land will be subject to the Dodd-Frank Act’s appraisal requirements,” the notice stated. “Loans secured by a new manufactured home and land will be exempt only from the requirement that the appraiser visit the home’s interior. For loans secured by manufactured homes without land, creditors will be allowed to use other valuation methods without an appraisal, such as using third-party valuation services or ‘book values.'”
