Appraisals for Higher-Priced Mortgage Loans: Modified exemptions for loans secured by manufactured homes, Regulation Z, Effective date

Credit unions that receive an application for a higher-priced mortgage loan (HPML) must comply with the new HPML Appraisal Rule. Under the rule, a mortgage loan is an HPML if it is a closed-end transaction, secured by a consumer’s principal dwelling, and has an interest rate above a certain threshold, as described in more detail below.

Before originating an HPML, the credit unionou must:

1. Obtain one or more appraisals meeting specified standards;
2. Provide information to applicants regarding the use of the appraisals; and
3. Give applicants a copy of each appraisal used.

The requirements of the new Equal Credit Opportunity Act Appraisals and Written Valuations Rule (ECOA Valuations Rule),2 addressed in NCUA Regulatory Alert 13-RA-07 must be considered. The overlap between the two rules is detailed later in this alert.

The effective date for both the HPML Appraisal Rule and ECOA Valuations Rule was January 18, 2014. Modified exemptions for loans secured by manufactured homes will be effective on July 18, 2015.

http://www.ncua.gov/Legal/Documents/Regulatory%20Alerts/RA2014-07.pdf

http://www.cuna.org/WebAssets/Pages/newsnowarticle.aspx?id=27917288372&blogid=451