On November 21, 2018, the Agencies announced the 2019 threshold for smaller loan exemption from appraisal requirements for higher-priced-mortgage loans (HPMLs). The Dodd-Frank Act amended the Truth in Lending Act to add special appraisal requirements for higher-priced mortgage loans, including a requirement that creditors obtain a written appraisal based on a physical visit to the home’s interior before making a higher-priced mortgage loan. The rules implementing these requirements contain an exemption for loans of $25,000 or less and also provide that the exemption threshold will be adjusted annually to reflect inflation increases.
If there is no inflation increase during a year, the agencies will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage change in a common index to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the index had been taken into account.
The threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans during 2019 has been increased from $26,000 to $26,700.
The OCC’s version of the interagency release can be found here.