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#1857407 - 10/01/13 06:56 PM What happens with subordinate liens after 1/18?
BNach Offline
Junior Member
Joined: Jul 2011
Posts: 41
Central PA
Here is another Reg B appraisal question that has me stumped. Currently, Reg B applies to all loans secured by a dwelling. As you know, we have to give the Right to Receive notice to all loans secured by a dwelling. The new rule only covers 1st liens on a dwelling. So, after January 18th we will have to provide notice and appraisals to all applicants who apply for a loan secured by a 1st lien on a dwelling. So, what happens to the subordinate liens after January 18th? We have no Reg B appraisal requirements for subordinate liens? I would tend to believe that that is the correct answer since the regulation is silent on it but it seems like they would mention it since we currently have a responsibility to give them a notice.

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Interagency (Reg Z) and CFPB Reg B Appraisal Rules
#1857441 - 10/01/13 07:43 PM Re: What happens with subordinate liens after 1/18? BNach
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
The changed language doesn't include any requirements for subordinates, so my take is...it disappears when the new rule takes over.
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#1857834 - 10/02/13 08:00 PM Re: What happens with subordinate liens after 1/18? BNach
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
1) You still have to conform to the Interagency Appraisal Guidelines.

2) There will not be a Regulation B requirement after 1/18/14 for notices or appraisal copies for junior-lien secured loans.

3) However, there remains the matter of the HPML appraisal requirement under Reg Z 1026.35(c). If the loan in question is closed-end and secured by the consumer's principal dwelling, and otherwise fits the definition of an HPML at 1026.35(a)(1) for a junior lien-secured loan, the appraisal requirements of section .35(c) will apply.
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#1883698 - 01/07/14 03:17 PM Re: What happens with subordinate liens after 1/18? John Burnett
DCollins Offline
Platinum Poster
DCollins
Joined: Oct 2001
Posts: 707
If we decide to give our customers their appraisal even if the loan is a junior lien, are we in violation to the new requirements?

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#1883702 - 01/07/14 03:21 PM Re: What happens with subordinate liens after 1/18? BNach
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
No.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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