Fed announces 2015 higher-priced mortgage threshold

December 29, 2014

WASHINGTON (12/30/14)--The 2015 adjustment of the dollar amount used to determine whether a small loan is exempt from special appraisal requirements that apply to higher-priced mortgage loans has been announced by the Federal Reserve board. The exemption threshold will be $25,500, effective Jan. 1.

The adjustment is based on the annual percentage increase in the Consumer Price Index for urban wage earners and clerical workers as of June 1.

The Dodd-Frank Act amended the Truth in Lending Act in 2010 to require creditors to obtain a written appraisal based on a physical visit of the home's interior before making a higher-priced mortgage loan.

Federal regulators issued rules implementing this requirement in January 2014, which contained an exemption for loans of $25,000 or less. The rules also required the exemption threshold be adjusted annually based on the annual percentage change reflected in the Consumer Price Index.

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