Second Appraisals for HPMLs

Higher-Priced Mortgage Loans can have a lot of compliance hoops to jump through. For instance, if the HPML is a first lien you generally must establish an escrow account for the payment of property taxes and any lender-required insurance (hazard, flood, mortgage, etc.). Keep in mind, however; there are some exceptions. For more on these requirements, check out “Ability to Repay, QM, High-Cost & Higher-Priced Mortgage Loans” or “All About Escrowing & Escrow Accounts.”

Another requirement for HPMLs is to obtain a second appraisal in certain circumstances.

Jerod explains more in the video.

Video Highlights:

• The second appraisal requirement applies to borrowers purchasing homes being flipped by another party.
• The borrower must get a copy of both appraisals free of charge from the lender.

Speaking of appraisals, the Agencies recently issued proposed Guidance on Reconsiderations of Value for Residential Real Estate Valuations and are requesting comments on Quality Control Standards for Automated Valuation Models used in Real Estate Valuations. Join us for an overview of these and learn how they intersect with the appraisal requirements found in Regulations B and Z.

Published
2023/07/11