The Federal Reserve and five other federal financial regulatory agencies proposed new appraisal requirements for higher-risk mortgage loans as part of the financial system overhauls required under the Dodd-Frank Act.
The rule would require lenders for those mortgages to use certified appraisers who prepare written reports based on a physical inspection of the home, the Fed said in a statement today. The agencies also proposed requiring creditors to disclose the purpose of the appraisal to applicants and give them free copies of the reports.
Under the Dodd-Frank Act, mortgage loans are considered higher-risk if they’re backed by the borrower’s home and have interest rates above a certain level. The Fed is seeking comments on the rules, which it is proposing jointly with the Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., Federal Housing Finance Agency, National Credit Union Administration and Office of the Comptroller of the Currency.