Must obtain, before consummation, a Appraisal Requirements for Closed-end loan secured by Standard TILA liability, plus: if creditor Revisit if any priced mortgage “higher written appraisal performed by consumer’s principal dwelling willfully fails to obtain required appraisal, loans” will be made Priced Mortgage “Higher certified or licensed appraiser who Loans” that exceed the applicable there will be liability to the applicant or “higher Begin to examine current appraisal conducts physical visit of the interior priced” threshold borrower for $2,000 78 Fed. Reg. 10368 (2/13/13) practices to identify need for changes of property Issued by multiple regulators Exclusions: mortgage” State A.G. may bring action under a 3 year “qualified Effective Date: January 18, 2014 (see 12 CFR 1026.43(e)); credit statute of limitations Some purchase money transactions secured by new manufactured require two appraisals (but can only home; credit secured by mobile charge borrower for cost of one home, boat, or trailer; appraisal) construction loan; bridge loan; reverse mortgage Specific disclosure must be provided to loan applicant at time of application (very similar to ECOA appraisal disclosure) Must provide copy of all appraisals performed no later than 3 business days before consummation or, if not consummated, within 30 days of determination that loan will not close Appraisal Delivery and Loan secured by first lien on a Requires creditor to provide copy of all Standard ECOA liability is actual damages Consider how to implement process for Disclosure under ECOA dwelling appraisals to applicant promptly upon and, if appropriate, punitive damages up to providing copies of all appraisals and completion of appraisal but not later $10,000, plus and attorney fees to an written valuations routinely on all loans 78 Fed. Reg. 7216 (1/31/13) Note: Applies to HELOCs than 3 business days before aggrieved applicant in a successful action secured by a first lien on a dwelling Effective Date: January 18, 2014 Note: Applies to consumer and consummation (closed-end) or account 5year statute of limitations commercial purpose loans opening (open end) Applies regardless of whether loan closes Also requires notice within 3 business days of application of applicant’s right to receive copy of all appraisals
Appraisal Requirements for “Higher Priced Mortgage Loans” 78 Fed. Reg. 10368 (2/13/13) Issued by multiple regulators Effective Date: January 18, 2014 Closed-end loan secured by consumer’s principal dwelling that exceed the applicable “higher priced” threshold Exclusions: “qualified mortgage” (see 12 CFR 1026.43(e)); credit secured by new manufactured home; credit secured by mobile home, boat, or trailer; construction loan; bridge loan; reverse mortgage Must obtain, before consummation, a written appraisal performed by certified or licensed appraiser who conducts physical visit of the interior of property Some purchase money transactions require two appraisals (but can only charge borrower for cost of one appraisal) Specific disclosure must be provided to loan applicant at time of application (very similar to ECOA appraisal disclosure) Must provide copy of all appraisals performed no later than 3 business days before consummation or, if not consummated, within 30 days of determination that loan will not close Standard TILA liability, plus: if creditor willfully fails to obtain required appraisal, there will be liability to the applicant or borrower for $2,000 State A.G. may bring action under a 3 year statute of limitations Revisit if any “higher priced mortgage loans” will be made Begin to examine current appraisal practices to identify need for changes Appraisal Delivery and Disclosure under ECOA 78 Fed. Reg. 7216 (1/31/13) Effective Date: January 18, 2014 Loan secured by first lien on a dwelling Note: Applies to HELOCs Note: Applies to consumer and commercial purpose loans Requires creditor to provide copy of all appraisals to applicant promptly upon completion of appraisal but not later than 3 business days before consummation (closed-end) or account opening (open end) Applies regardless of whether loan closes Also requires notice within 3 business days of application of applicant’s right to receive copy of all appraisals Standard ECOA liability is actual damages and, if appropriate, punitive damages up to $10,000, plus and attorney fees to an aggrieved applicant in a successful action 5year statute of limitations Consider how to implement process for providing copies of all appraisals and written valuations routinely on all loans secured by a first lien on a dwelling
DoddFrankMortgageRules.docx