Threshold Set For Exempting Loans From Special Appraisal Requirements For Higher-Priced Mortgages

The Consumer Financial Protection Bureau (CFPB), Federal Reserve Board and Office of the Comptroller of the Currency (OCC) have set the threshold for exempting smaller loans from special appraisal requirements for higher-priced mortgages for 2016.

The threshold, which is updated annually based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), will remain $25,500 for next year, the agencies announced.

The special appraisal requirements for higher-priced mortgage loans – including a requirement that creditors obtain a written appraisal based on a physical visit to the home's interior before making a higher-priced mortgage loan – were born out of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The rules implementing these requirements contain an exemption for loans of $25,000 or less and also provide that the exemption threshold be adjusted annually to reflect increases in the CPI-W.

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