Appraisals for Higher-Priced Mortgage Loans – Supplemental Proposal

170 Pages·2013·1.03 MB·English

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 34

Docket No. OCC-2013-0009

RIN 1557-AD70

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

12 CFR Part 226

Docket No. R-1443

RIN 7100-AD90

BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1026

Docket No. CFPB-2013-0020

RIN 3170-AA11

Appraisals for Higher-Priced Mortgage Loans – Supplemental Proposal
AGENCIES: Board of Governors of the Federal Reserve System (Board); Bureau of
Consumer Financial Protection (Bureau); Federal Deposit Insurance Corporation (FDIC);
Federal Housing Finance Agency (FHFA); National Credit Union Administration
(NCUA); and Office of the Comptroller of the Currency, Treasury (OCC).
ACTION: Proposed rule; request for public comment.
SUMMARY: The Board, Bureau, FDIC, FHFA, NCUA, and OCC (collectively, the
Agencies) are proposing to amend Regulation Z, which implements the Truth in Lending
Act (TILA), and the official interpretation to the regulation. This proposal relates to a
final rule issued by the Agencies on January 18, 2013 (2013 Interagency Appraisals Final
Rule or Final Rule), which goes into effect on January 18, 2014. See 78 FR 10368 (Feb.
13, 2013). The Final Rule implements a provision added to TILA by the Dodd-Frank
Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act or Act) requiring
appraisals for “higher-risk mortgages.” For certain mortgages with an annual percentage
rate that exceeds the average prime offer rate by a specified percentage, the Final Rule
requires creditors to obtain an appraisal or appraisals meeting certain specified standards,
provide applicants with a notification regarding the use of the appraisals, and give
applicants a copy of the written appraisals used. The Agencies are proposing
amendments to the Final Rule implementing these requirements; specifically, the
Agencies are proposing exemptions from the rules for: (1) transactions secured by
existing manufactured homes and not land; (2) certain “streamlined” refinancings; and
(3) transactions of $25,000 or less.
DATES: Comments must be received on or before September 9, 2013, except that
comments on the Paperwork Reduction Act analysis in part VIII of the Supplementary
Information must be received on or before [INSERT DATE 60 DAYS AFTER THE
DATE OF PUBLICATION IN THE FEDERAL REGISTER].
ADDRESSES: Interested parties are encouraged to submit written comments jointly to
all of the Agencies. Commenters are encouraged to use the title “Appraisals for Higher-
Priced Mortgage Loans – Supplemental Proposal” to facilitate the organization and
distribution of comments among the Agencies. Commenters also are encouraged to
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identify the number of the specific question for comment to which they are responding.
Interested parties are invited to submit written comments to:
Board: You may submit comments, identified by Docket No. R-1443 or RIN
7100 – AD90, by any of the following methods:
• Agency Web Site: http://www.federalreserve.gov. Follow the instructions for
submitting comments at
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
• Electronic: http://www.regulations.gov. Follow the instructions for submitting
comments.
• Mail: Monica Jackson, Office of the Executive Secretary, Bureau of Consumer
Financial Protection, 1700 G Street, NW, Washington, DC 20552.
• Hand Delivery/Courier in Lieu of Mail: Monica Jackson, Office of the Executive
Secretary, Bureau of Consumer Financial Protection, 1700 G Street, NW,
Washington, DC 20552.
All submissions must include the agency name and docket number or Regulatory
Information Number (RIN) for this rulemaking. In general, all comments received will
be posted without change to http://www.regulations.gov. In addition, comments will be
available for public inspection and copying at 1700 G Street, NW, Washington, DC
20552, on official business days between the hours of 10 a.m. and 5 p.m. Eastern Time.
You can make an appointment to inspect the documents by telephoning [phone].
All comments, including attachments and other supporting materials, will become
part of the public record and subject to public disclosure. Sensitive personal information,
such as account numbers or social security numbers, should not be included. Comments
will not be edited to remove any identifying or contact information.
FDIC: You may submit comments by any of the following methods:
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions
for submitting comments.
• Agency Web site: http://www.FDIC.gov/regulations/laws/federal/propose.html.
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• Mail: Robert E. Feldman, Executive Secretary, Attention: Comments/Legal ESS,
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC
20429.
• Hand Delivered/Courier: The guard station at the rear of the 550 17th Street
Building (located on F Street), on business days between 7:00 a.m. and 5:00 p.m.
• Email:
The package should be logged in at the Guard Desk, First Floor, on business days
between 9 a.m. and 5 p.m.
• U.S. Mail, United Parcel Service, Federal Express, or Other Mail Service: The
mailing address for comments is: Alfred M. Pollard, General Counsel, Attention:
Comments/RIN 2590-AA58, Federal Housing Finance Agency, Eighth Floor, 400
Seventh Street, SW, Washington, DC 20024.
Copies of all comments will be posted without change, including any personal
information you provide, such as your name, address, email address, and phone number,
on the FHFA Internet Web site at http://www.fhfa.gov. In addition, copies of all
comments received will be available for examination by the public on business days
between the hours of 10 a.m. and 3 p.m., Eastern Time, at the Federal Housing Finance
Agency, Eighth Floor, 400 Seventh Street, SW, Washington, DC 20024. To make an
appointment to inspect comments, please call the Office of General Counsel at (202) 649-
3804.
NCUA: You may submit comments, identified by RIN 3133-AE21, by any of the
following methods (Please send comments by one method only):
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions for submitting comments.
• NCUA Web Site: http://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx Follow
the instructions for submitting comments.
• E-mail: Address to
• Fax: [phone]. Use the subject line described above for e-mail.
• Mail: Address to Mary Rupp, Secretary of the Board, National Credit Union
Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428.
• Hand Delivery/Courier in Lieu of Mail: Same as mail address
You can view all public comments on NCUA’s website at
http://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx as submitted, except for those we
cannot post for technical reasons. NCUA will not edit or remove any identifying or
contact information from the public comments submitted. You may inspect paper copies
of comments in NCUA’s law library at 1775 Duke Street, Alexandria, Virginia 22314, by
appointment weekdays between 9:00 a.m. and 3:00 p.m. To make an appointment, call
[phone] or send an e-mail to
• Mail: Legislative and Regulatory Activities Division, Office of the Comptroller
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of the Currency, 400 7 Street, SW, Suite 3E-218, Mail Stop 9W-11, Washington,
DC 20219.
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• Hand Delivery/Courier: 400 7 Street, SW, Suite 3E-218, Mail Stop 9W-11,
Washington, DC 20219.
• Fax: [phone].
Instructions: You must include “OCC” as the agency name and “Docket ID OCC-
2013-0009” in your comment. In general, OCC will enter all comments received into the
docket and publish them on the Regulations.gov Web site without change, including any
business or personal information that you provide such as name and address information,
e-mail addresses, or phone numbers. Comments received, including attachments and
other supporting materials, are part of the public record and subject to public disclosure.
Do not enclose any information in your comment or supporting materials that you
consider confidential or inappropriate for public disclosure.
You may review comments and other related materials that pertain to this
rulemaking action by any of the following methods:
• Viewing Comments Electronically: Go to http://www.regulations.gov. Enter
“Docket ID OCC-2013-0009” in the Search box and click “Search.” Comments
can be filtered by Agency using the filtering tools on the left side of the screen.
• Click on the “Help” tab on the Regulations.gov home page to get information on
using Regulations.gov, including instructions for viewing public comments,
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viewing other supporting and related materials, and viewing the docket after the
close of the comment period.
• Viewing Comments Personally: You may personally inspect and photocopy
comments at the OCC, 400 7th Street, SW, Washington, DC. For security
reasons, the OCC requires that visitors make an appointment to inspect
comments. You may do so by calling [phone]. Upon arrival, visitors will
be required to present valid government-issued photo identification and to submit
to security screening in order to inspect and photocopy comments.
Docket: You may also view or request available background documents and
project summaries using the methods described above.
FOR FURTHER INFORMATION CONTACT:
Board: Lorna Neill or Mandie Aubrey, Counsels, Division of Consumer and
Community Affairs, at [phone], Carmen Holly, Supervisory Financial Analyst,
Division of Banking Supervision and Regulation, at [phone], or Kara Handzlik,
Counsel, Legal Division, [phone], Board of Governors of the Federal Reserve
System, Washington, DC 20551.
Bureau: Owen Bonheimer, Counsel, or William W. Matchneer, Senior Counsel,
Division of Research, Markets, and Regulations, Bureau of Consumer Financial
Protection, 1700 G Street, NW, Washington, DC 20552, at [phone].
FDIC: Beverlea S. Gardner, Senior Examination Specialist, Risk Management
Section, at [phone], Sandra S. Barker, Senior Policy Analyst, Division of
Consumer Protection, at [phone], Mark Mellon, Counsel, Legal Division, at (202)
898-3884, Kimberly Stock, Counsel, Legal Division, at [phone], or Benjamin
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Gibbs, Senior Regional Attorney, at [phone], Federal Deposit Insurance
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Corporation, 550 17 St, NW, Washington, DC 20429.
FHFA: Susan Cooper, Senior Policy Analyst, [phone], Lori Bowes,
Policy Analyst, Office of Housing and Regulatory Policy, [phone], Ming-Yuen
Meyer-Fong, Assistant General Counsel, Office of General Counsel, [phone],
Federal Housing Finance Agency, 400 Seventh Street, SW, Washington, DC, 20024.
NCUA: John Brolin and Pamela Yu, Staff Attorneys, or Frank Kressman,
Associate General Counsel, Office of General Counsel, at [phone], or Vincent
Vieten, Program Officer, Office of Examination and Insurance, at [phone], or
1775 Duke Street, Alexandria, Virginia, 22314.
OCC: Robert L. Parson, Appraisal Policy Specialist, [phone], G. Kevin
Lawton, Appraiser (Real Estate Specialist), [phone], Carolyn B. Engelhardt, Bank
Examiner (Risk Specialist – Credit), [phone], Charlotte M. Bahin, Senior
Counsel or Mitchell Plave, Special Counsel, Legislative & Regulatory Activities
Division, [phone], Krista LaBelle, Special Counsel, Community and Consumer
Law Division, [phone], or 400 Seventh Street, SW, Washington D.C. 20219.
SUPPLEMENTARY INFORMATION:
I. Summary of the Proposed Rule
As discussed in detail under part II of this Supplementary Information, section
1471 of the Dodd-Frank Act created new TILA section 129H, which establishes special
appraisal requirements for “higher-risk mortgages.” 15 U.S.C. 1639h. The Agencies
adopted the 2013 Interagency Appraisals Final Rule to implement these requirements
(adopting the term “higher-priced mortgage loans” (HPMLs) instead of “higher-risk
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