Six federal agencies approve new appraisal requirements

The rule also requires that creditors tell consumers within three days of receiving an application for a loan of their right to receive a copy of all appraisals.  

Consumers are usually charged for the costs related to conducting an appraisal. However, the law currently does not require that consumers receive a copy of the appraisal unless they request it and does not require that consumers receive a copy of any other estimates of the home’s value.

Under Dodd-Frank, mortgage loans are higher-priced if they are secured by a consumer's home and have interest rates above certain thresholds.

The new rule attempts to put a stop to fraudulent property flipping by seeking to ensure that the value of the property legitimately increased.

If the seller acquired the property for a lower price during the prior six months and the price difference exceeds certain thresholds, creditors will have to obtain a second appraisal at no cost to the consumer.  

The rule exempts several types of loans, such as qualified mortgages, temporary bridge loans and construction loans, loans for new manufactured homes and loans for mobile homes, trailers and boats that are dwellings.  

The rule also provides exemptions from the second appraisal requirement for loans in rural areas. 

The rule is being issued by the CFPB, the Federal Reserve, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration and the Office of the Comptroller of the Currency. 

The rule will become effective on Jan. 18, 2014, and will apply to first-lien mortgages.

In response to public comments, the agencies are planning to request additional comment on possible exemptions for "streamlined" refinance programs and small dollar loans. They also will request clarification on whether the rule should apply to loans secured by existing manufactured homes and certain other property types.