Proposal to End Appraisal Requirement
Regulators’ Proposal to End Appraisal Requirement on Some Home Sales of $400,000 and Below…
The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve released a proposal that would increase the appraisal requirement from $250,000 to $400,000, meaning that certain home sales of $400,000 and below would no longer require an appraisal.
According to data provided by the FDIC, the agencies estimate that increasing the appraisal threshold from $250,000 to $400,000 would have exempted an additional 214,000 residential mortgages at regulated institutions from the agencies’ appraisal requirement in 2017, which represents 3% of total HMDA originations.
The regulators say the move is in response to “concerns raised about the time and cost associated with completing residential real estate transactions.”
Under the proposal, instead of requiring a full appraisal, lenders would need to obtain an “evaluation consistent with safe and sound banking practices.”
To read the full proposal from the FDIC, OCC, and Federal Reserve, click here.