Mortgage Lending Crazy Train Is Back As FDIC And OCC Say No Appraisals Needed On Home Sales Under $400,000
Mortgage lending crazy train is officially back and the Trump Administration is the engineer!
It’s such a bad idea that even the dimwitted train operators Charlie Pratt and Floyd Smoot owners of the Cannonball Express think it’s a bad idea.
Home sales under $400,000 may soon not need an appraisal. Federal regulators are close to approving a proposal to increase the threshold at which residential home sales require an appraisal for the first time since 1994.
In November, the FDIC, the Office of the Comptroller of the Currency, and the Federal Reserve released a proposal that certain home sales of $400,000 and below would no longer require an appraisal.
The FDIC and OCC have approved the proposal. However, the rule cannot move forward without Fed approval.
The FDIC published the final rule on the matter earlier this week.
As a result, mortgage industry insiders falsely assumed that the rule is finalized. However, the Federal Reserve has not yet signed off the proposal.
The Consumer Financial Protection Bureau has also signed off on the plan. Therefore, it’s only a matter of time before the Fed approves the rule.
It is also important to note that the new rules do not apply to loans wholly or partially insured or guaranteed by, or eligible for sale to, a government agency or government-sponsored agency.
The new rule would immediately impact 40% of home sales.
The rule will become law likely within days after the Federal Reserve approves. The rule becomes law once it recorded in the Federal Register.
To read the final rule in full, click here.