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Guidelines: Full Appraisals On Mortgage Loans

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Question: 
We are a small lender. If we have a mortgage that is an HPML, do we have to do full appraisals on every mortgage loan? Typically we do in-house evaluations on RE loans that are $150,000 which are the typical guidelines and order full appraisals when the loan exceeds $250,000.00
Answer: 

Unless one of the exemptions provided under 1026.35(c)(2) apply, you need a full appraisal on any HPML loan, regardless of dollar amount of the loan. In addition, if title to the property has previously been transferred within the 180 days prior to your loan, you may be required to have a 2nd appraisal performed. See 1026.35(c)(3) and (4). Now, one of the easiest exemptions to have under (c)(2) is that the loan is a qualified mortgage. If the loan is a qualified mortgage HPML loan, then you can default to the appraisal rule standard of only requiring a full appraisal if the loan amount is over $250,000 and doing a valuation if under.

First published on 08/07/2016

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