Six financial regulators proposed amendments to their joint final rule on appraisal requirements for higher-risk mortgage loans. The rule, which takes effect January 18, 2014, applies to mortgage loans secured by a consumer’s home with interest rates above a certain threshold.
The proposed amendments would exempt from the rules “streamlined refinancings” -- that is, transactions in which the owner or guarantor of the refinance loan is also the owner or guarantor of the existing loan; the refinance loan does not result in negative amortization, interest-only payments, or balloon payments; and the refinance loan’s proceeds go only to the existing loan’s outstanding balance and closing costs.
The amendments also would exempt loans secured solely by existing manufactured homes and not land, as well as loans of less than $25,000.
Comments on the proposal are due by September 9.