Final Rule on Appraisals for High Priced Mortgage Loans Released.
High Priced Mortgage Loan also called an HPML is a loan that is secured against a borrower’s primary residence and has an interest rate that is higher than the average prime offer rate. The Federal Reserve Board issued the Final Rule on Appraisals for HPML on January 18, 2013, which was mandated by provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).
The Final Rule requires lenders to use a certified or licensed appraiser who prepares a written appraisal report based on a physical inspection of the interior of the property. The rule also requires lenders to provide borrowers with a free copy of the appraisal report and to disclose the purpose of the appraisal report. In an effort to prevent fraudulent property flipping, the rule requires creditors to obtain an additional appraisal at no cost to the borrower if the property has been acquired: