The federal financial regulatory agencies have approved rules requiring residential lenders offering higher-risk mortgages to use certified or licensed appraisers.
Under the new rules – which go into effect on Jan. 18, 2014 – originators that issue loans that do not meet the new qualified mortgage definition will need to hire certified or licensed appraisers to prepare written reports that will determine the value of a property. The report must be based on physical inspections conducted in the property's interior.
Furthermore, lenders must provide potential borrowers with a free copy of the appraisal report. If the property was purchased for less than the current sale price within the last six months, a second appraisal must be conducted, and the appraiser's report must detail the difference in sale prices, market conditions and any property improvements.
The agencies that approved the rule are the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., the Federal Housing Finance Agency, the Federal Reserve, the National Credit Union Administration and the Office of the Comptroller of the Currency.