On July 10th, the Consumer Financial Protection Bureau (CFPB), in cooperation with five other federal agencies, issued joint proposed regulations providing exemptions from appraisal requirements for certain higher-priced mortgage loans (HPMLs), which would include manufactured home loans. Imposed by the Dodd-Frank Act, mortgage loans are considered to be higher-priced if they are secured by the borrower’s home and have an APR (average prime rate) more than 1.5 percent above the average prime offer rate. The proposed rules released by the CFPB exempt from appraisal requirements transactions secured by existing manufactured homes and not land, which covers new manufactured homes as well as pre HUD Code homes. This exemption marks a breakthrough for the manufactured housing industry and consumers. Additionally, the proposed rule change exempts loans of $25,000 or less, without which creditors providing non-QM loans for the purchase of manufactured homes would have been required to perform a complete Uniform Standards of Professional Appraisal Practices (USPAP)-compliant appraisal. That would add costs to the consumer and a burden to the lender, as MHProNews has learned from the Manufactured Housing Institute (MHI) newsletter. All six federal agencies are seeking comments on the proposal which closes Sept. 9, 2013. The rule is scheduled to take effect Jan. 2014. For the full report, please click here.
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