OCC Seeks Public Comment on Mortgage Appraisal Rules Renewal

You might care about this because the Office of the Comptroller of the Currency, or OCC, is currently seeking public feedback on rules about appraisals for certain home loans. These are called Higher-Priced Mortgage Loans, or HPMLs. This public notice is not about creating new rules. Instead, it is part of a regular process to review and renew an existing information collection. Federal agencies must do this under the Paperwork Reduction Act. The rules themselves come from the Dodd-Frank Act and the Truth in Lending Act. They were put in place to protect consumers. For these specific mortgage loans, lenders must follow strict appraisal requirements. They need to get a written appraisal from a certified or licensed appraiser. This appraiser must physically visit the inside of the property. Lenders also have to tell loan applicants that an appraisal will be ordered and that they might be charged for it. They must also give applicants a copy of the completed appraisal report. A special rule applies if a property is bought and quickly resold for a much higher price. For example, if a seller acquired a property within 90 days and sells it for more than 10 percent above their purchase price, an additional appraisal is required. The same applies if the property is sold within 91 to 180 days for more than 20 percent above the original purchase price. This second appraisal must look at how the price changed, market conditions, and any improvements made to the property. The goal of these rules is to make sure appraisals are fair and accurate. This helps both consumers and the financial system. What makes this notice particularly interesting is its focus on protecting consumers in specific, higher-risk home loan situations. The rules for Higher-Priced Mortgage Loans ensure that property values are thoroughly checked. This helps prevent people from paying too much for a home. It also prevents certain questionable practices in real estate. The requirement for a physical visit by a certified appraiser adds a layer of confidence. This ensures that the appraisal is based on a real inspection, not just data from a desk. The additional appraisal rule is especially important. It directly addresses property flipping. This happens when a home is bought and then quickly sold for a much higher price, often without significant improvements. The rule requires a deeper look into the reasons for the price increase. This includes analyzing market changes and any improvements made. This scrutiny helps protect buyers from inflated prices. It also makes the mortgage market safer overall. The OCC is not changing these rules now. This public notice simply shows that the agency is reviewing the paperwork burden associated with these consumer protection measures. It also gives the public another chance to provide input on how well these rules are working. Many different groups of people will find this legal document and its underlying rules very interesting. If you are a financial institution, such as a bank or a credit union, that offers mortgage loans, these rules directly affect how you do business. Mortgage lenders and loan officers need to understand these appraisal requirements to make sure they are following the law. Real estate appraisers, especially those who work with residential properties, are also directly impacted. The document specifies their role and the standards they must meet for certain loans. Home buyers, particularly those looking to purchase a higher-priced home, should also pay attention. These rules are designed to protect them from unfair or inflated property valuations. Anyone considering buying a property that has been recently sold should also be aware of the additional appraisal requirements. Consumer advocacy groups and legal professionals working in real estate or consumer protection will find this document relevant. It shows the ongoing efforts of regulators to maintain fairness and stability in the housing market.