Effective January 18, 2014, the final rule was issued on new appraisal requirements for Higher-priced mortgage loans (HPML).
A licensed appraiser must provide a written appraisal based n a physical visit to the property, creditors must disclose the purpose of the appraisal and applicants will be given a free copy.
If seller bought the property within six months and the current price exceeds a threshold written into the new rule, the creditor must also pay for a second appraisal. This is intended to cut down on fraudulent property flipping by ensuring the property value has legitimately increased. The types of exempt loans include qualified mortgages, temporary bridge and construction loans, loans for new manufactured homes and loans for mobile homes, trailers and houseboats. Some rural areas and other transactions are exempt.
The complete rule can be downloaded from the Federal Reserve’s website.