Regulation Z identifies additional compliance requirements associated with loan transactions that are considered higher-priced.
A recent CUNA CompBlog entry breaks down these requirements and identifies the updated higher-priced mortgage loan (HPML) appraisal exemption threshold for 2018.
An HPML is a closed-end consumer credit transaction secured by the borrower's principal dwelling with an annual percentage rate that exceeds the average prime offer rate by:
The following additional compliance requirements apply to a loan transaction that is higher-priced:
There are several exceptions to the mandatory appraisal requirement for an HPML. The credit union may instead rely upon an alternative method of valuation for:
This appraisal exemption threshold was $25,500 for 2017.
The CFPB published a final rule in the Federal Register earlier this month which increases this amount to $26,000 for calendar year 2018.