If a manufactured home only loan gets the presumption of compliance QM status, are we required to get an appraisal or do one of the 3 things listed in the exceptions? One of the exemptions to the HPML appraisal rule is for QMs, but it seems odd to create a HPML Appraisal rule where a HPML can still obtain a QM presumption of compliance and not require an appraisal or other valuation method.

Lenders lobbied hard to have the QM exemption included in the HPML appraisal rule. If the loan meets the QM definitions, the HPML appraisal rule doesn't apply. Odd or not, be thankful for the exemption and move on to the next important thing on your list.

Perhaps you can elaborate a bit more on this to settle a discussion we're having on this at work. The previous two posts pertaining to 1026.43(e), only apply to Reg Z. This has no bearing on the similar three-day before consummation appraisal requirements of 1002.14(a)2, or Reg B. Putting it another way, the QM exclusion does not apply to Reg B compliance.

They are two completely separate rules. One does not affect the other. For example, if your loan isn't an HPML, it won't be subject to the HPML appraisal requirements in 1026.35. But if it's secured by a first lien on a dwelling, the Reg B appraisal rule will apply.

Another example: If the loan is exempt from Reg Z altogether because it's a loan to a corporation or for business purposes, but it's secured by a first lien on a 1-4 family dwelling, it's subject to the Reg B appraisal rule, but, of course, not covered by anything in Reg Z, including the HPML appraisal rule.

There are a lot of other examples, but here's one last one to specifically address your comment, Bibliofiend: If a mortgage loan is a Qualified Mortgage under 1026.43, it qualifies for an exemption from the HPML appraisal rule, but it doesn't give you a "pass" on the Reg B appraisal rule if it's a first lien loan secured by a dwelling.

THANK YOU! Not the answer I was hoping for, BUT THE ANSWER I CAME UP WITH.

So if a lender qualifies as a "small creditor" under 1026.43(e)(5), any portfolio loans that otherwise meet the QM restrictions (points and fees test, loan features, etc.) and thus qualify as as QM under the "small creditor" exception would not be subject to the HPML Appraisal rule?

Regardless of how it gets the QM stamp, if it's a QM, it's exempt from the HPML appraisal requirements. And that includes loans that meet the QM requirements of another agency.

Not wanting to beat a dead horse, but, if we are exempt from the QM due to being a small creditor, even if the loan is an HPML we are exempt from Reg Z Receipt of Appraisal and timing? We do not have to have that document signed and wait the three days afterwards to close the loan?

Small creditor status doesn't exempt you from the QM requirements. You are given more, less rigid, QM parameters to deal with than creditors who don't meet small creditor criteria. You can make types of loans as QMs that the larger creditors cannot make (such as balloon QMs under section 1026.43(f)).

First, figure out whether the loan you're dealing with is an HPML. First, the loan has to be consumer credit that is closed-end, secured by the consumer's principal dwelling. If you get that far, determine whether you will have a first lien or a subordinate lien and whether the loan is a "jumbo" loan. Those criteria let you know which margins over the APOR to use in comparing your rate with the APOR.

If you have an HPML, run through the exemptions from the appraisal requirements. You'll find those exemptions in section 1026.35(c)(2). Notice that any loan that is a QM (that includes regular QMs, small creditor QMs and QMs under any of the agency rules referred to in 1026.43(e)(4)) will not be subject to the appraisal rules. There are a number of other exemptions in .35(c)(2) -- some are partial exemptions -- but if yours is a QM you have the "pass" you need, and you don't need to worry about anything in .35(c) at all.