Section 1471 of the Dodd-Frank Act established a new Truth in Lending (TILA) section 129H, which contains appraisal requirements applicable to higher-risk mortgages and prohibits a creditor from extending credit in the form of a higher-risk mortgage loan to any consumer without meeting those requirements. A Higher-risk mortgage is defined as a residential mortgage loan secured by a principal dwelling with an annual percentage rate (APR) that exceeds the average prime offer rate (APOR) for a comparable transaction as of the date the interest rate is set by certain enumerated percentage point spreads. The rule requires that, within three days of application, a creditor provide a disclosure that informs consumers regarding the purpose of the appraisal, that the creditor will provide the consumer a copy of any appraisal, and that the consumer may choose to have a separate appraisal conducted at the expense of the consumer. If a loan meets the definition of a higher-risk mortgage loan, then the creditor would be required to obtain a written appraisal prepared by a certified or licensed appraiser who conducts a physical visit of the interior of the property that will secure the transaction, and send a copy of the written appraisal to the consumer. To qualify for the safe harbor provided under the rule, a creditor is required to review the written appraisal as specified in the text of the rule and appendix A. If a loan is classified as a higher-risk mortgage loan that will finance the acquisition of the property to be mortgaged, and the property was acquired within the previous 180 days by the seller at a price that was lower than the current sale price, then the creditor is required to obtain an additional appraisal.
The latest form for Appraisals for Higher-Priced Mortgage Loans expires 2022-10-31 and can be found here.
Document Name |
---|
Supporting Statement A |
Supplementary Document |
Supplementary Document |
Approved without change |
Revision of a currently approved collection | 2022-10-26 | |
Approved without change |
Extension without change of a currently approved collection | 2019-09-16 | |
Approved without change |
Revision of a currently approved collection | 2016-06-15 | |
Approved without change |
New collection (Request for a new OMB Control Number) | 2013-03-29 | |
Comment filed on proposed rule |
New collection (Request for a new OMB Control Number) | 2012-12-04 |
Federal Enterprise Architecture: Economic Development - Financial Sector Oversight