twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories free on your Web site or for your RSS reader.

News Archives
Archive of stories by month going back to 1999.

Press Releases
Reports and announcements from

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map
Appraisal News | AMC Directory
Appraisal industry news coverage, including stories about independence requirements, AVMs and appraiser fraud.

Appraisal Requirements Proposed for Higher Risk Loans

Rule would require second appraisal on flips

Aug. 15, 2012

By staff

New appraisal requirements are being proposed for higher-risk mortgages. Included in the proposal is a requirement for a second appraisal at the lender's expense if the property recently sold for less than the purchase price.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires that new appraisal requirements be established for higher-risk loans on residential properties.

A mortgage is considered higher-risk if the interest rate exceeds a certain threshold and is secured by the borrower's primary residence. The threshold for first liens that fall within Freddie Mac's loan limit is 1.5 percentage points higher than the average prime offer rate, while loans in excess of Freddie's limit have a threshold of 2.5 percent.

On subordinate liens, the threshold is 3.5 percent.

Reverse mortgages and loans that meet the definition of a qualified mortgage are excluded from the higher-risk mortgage classification.

A proposed rule was jointly issued Wednesday by the Consumer Financial Protection Agency, the Federal Housing Finance Agency and federal banking and credit union regulators. The proposal implements amendments to the Truth in Lending Act enacted by Dodd-Frank.

The rule requires that a licensed or certified appraiser inspects the interior of the property and prepares a written report for higher-risk loans.

A creditor on such a transaction would be required to disclose information about the purpose of the appraisal to the prospective borrower and provide free a copy of all appraisal reports at least three days prior to closing. Consumers must also be advised that they can order second appraisals at their own expense.

In cases where a seller acquired the property during the prior six months for less than the price being paid by the buyer, the creditor would be required to obtain an additional appraisal at no cost to the consumer. The second report would need to analyze the difference in sales prices and address changes in market conditions and property improvements since the previous sale.

Comments are being sought about what price increase threshold, if any, would be required in order to trigger the second report.

The second appraisal requirement is intended to address fraudulent flipping and ensure that any increase in the value is legitimate.

Comments are being accepted on the proposed rule until Oct. 15 at [email protected].

read full proposed rule

next story

back to current headlines

Predatory Lending News
FTC and HUD settlements. Class action lawsuits. Predatory lending prevention. Archives back to 2001.

Nonprime and Subprime News | Subprime Statistics
Stories about non-QM products. Coverage of subprime, Alt-A and
hard money lending. Home-equity loans and home-equity lines of credit.

Financial Regulation News | Mortgage Regulations
Bank and mortgage regulators, regulations and regulatory actions. Coverage of regulatory legislation and testimony.
Mortgage Compliance News | Mortgage Compliance Newsletter | Mortgage Regulations
News about complying with mortgage laws, rules and regulations.

Real Estate News | Real Estate Statistics
Residential real estate news and coverage of how residential real estate impacts the mortgage industry and residential mortgage-backed securities.

Logout forgot

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders