Agencies approve new mortgage appraisal requirements
WASHINGTON (Reuters) - U.S. mortgage lenders making higher-priced loans to consumers must have properties appraised and provide borrowers a free copy of the report, under new rules released by six financial regulatory agencies on Friday.
The rule is part of an overhaul of mortgage market regulations, as U.S. officials try to prevent the types of industry abuses that contributed to millions of home foreclosures and helped spark the 2007-2009 U.S. financial crisis.
Lenders making loans with interest rates above a certain threshold, which do not meet the "qualified mortgage" definition set by regulators last week, will be required to have a certified appraiser visit the interior of the property, the regulators said.
In an effort to crack down on property flipping, regulators said creditors also must obtain a second appraisal if the difference between what the seller paid for the property and what the consumer will pay exceeds certain levels.
Six agencies approved the appraisal rules, which were called for by the 2010 Dodd-Frank financial oversight law and which will take effect in January 2014.
The Federal Deposit Insurance Corp, Consumer Financial Protection Bureau, Federal Reserve, Federal Housing Finance Agency, National Credit Union Administration and Office of the Comptroller of the Currency all signed off on the rules.