OK someone is going to have to explain this one to me, because I just don't see why so many Government Agencies are behind this, and How Is This Going To Help The Housing Market? You may want to read the whole article, but when I saw the title "Agencies Propose More Exemptions for Appraisal Rules" I could not wait to read the article. However, I was in for a disappointment, what I read was not what I expected.
Basically "the FDIC, Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA), and Federal Reserve Board" are proposing exemptions be made to Dodd-Frank for appraisals on loans under $25,000. These are some of the most powerful agencies who regulate the Lending Industry today, and I fail to see how in the world this proposed change merits this much attention form them.
First of all most Lenders will not even go near a $25,000 loan. Loans this size are generally Lines of Credit, or Home Equity Loans which already have relaxed appraisal requirements. For example, when I did my Line of Credit, the appraisal (if one was done) was a drive by, so how much more relaxed can it get than that.
The concern seems to be loans this small would fall into the category of being High-Priced Loan's, and issues may result from an earlier proposal which is will be implimented in January, 2014 on appraisals, which stated:
"For higher-priced loans, creditors will be required to use a licensed or certified appraiser who prepares a written appraisal report based on a physical visit to the property interior. The rule also requires lenders to disclose to applications information about the appraisal’s purpose and to provide consumers with a free copy of any appraisal report.
In addition, if a seller flips a property for a higher price within six months of purchasing it, lenders will have to obtain a second appraisal (at no cost to the consumer) to ensure the value of the property is legitimately increased."
To the best of my knowledge Lenders have been following the above for some time now. I know we at McCue Mortgage have been providing the Borrower with a copy of the appraisal on every loan for several years now, as well two appraisals on a "flip" property. So what is new, and why the big concern over these small loans?
Like I said at the beginning someone is going to have to explain How Is This Going To Help The Housing Market? I have to be missing something here. Shouldn't these agencies be focusing their time on meaningful issues the Lending and Real Estate Industries are still facing, instead of focusing so much attention on something like this?
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Info about the author:
George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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