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Loans Secured in Whole or in Part by Manufactured Homes No Longer Exempt from HMPL Appraisal Rules

This is an exert from the CFPB's HPML Appraisal Rule Guide: 

 

What HPML loans are not covered by the HPML Appraisal Rule? (§ 1026.35(c)(2))

The rule exempts these loans (unless otherwise explained below, the rule exempts the loans from all of its requirements):

Qualified Mortgages, as defined in Regulation Z § 1026.43 or under rules on qualified mortgages adopted by HUD, USDA, or VA, including mortgages that meet the QM criteria for these rules. For more information on Qualified Mortgages, see comment 35(c)(1)(i)-1 and consult the Bureau’s Ability-to-Repay/Qualified Mortgage Rule Small Entity Compliance Guide online at http://www.consumerfinance.gov/regulations/ability-to-repay-and-qualified-mortgage-standardsunder-the-truth-in-lending-act-regulation-z/. 

Reverse mortgages  

Bridge loans (for 12 months or less and intended to be used to acquire a new principal dwelling)  

Loans for initial construction of a dwelling (not limited to loans of 12 months or less)  

Loans for $25,000 or less, indexed every year for inflation 

Streamlined refinance loans, so long as the holder of the credit risk of the existing obligation remains the same on the refinancing. Furthermore, the periodic payments under the refinance loan must not result in negative amortization, cover only interest on the loan, or result in a balloon payment. Finally, the proceeds from the refinanceloan may only be used to pay off the existing obligation and to pay closing or settlement charges.

Loans secured by manufactured homes for which the application is received before July 18, 2015, as discussed above, and for applications received thereafter: 

Loans secured by new manufactured homes and land are exempt from the requirement that the appraisal include a physical inspection of the interior of the property, but will be subject to all other HPML appraisal requirements. A new manufactured home is defined as one that has not previously been occupied. 

Loans secured by an existing (used) manufactured home and land will not be exempt from the rules.

Transactions secured solely by a manufactured home and not land will be exempt from the rules if the creditor gives the consumer one of three types of information about the home’s value: 

  • the manufacturer’s invoice of the unit cost (for a transaction secured by a new manufactured home) 
  • an independent cost service unit cost. An “independent cost service” would include a value report from the NADA guides, for example. 
  • a valuation conducted by an individual who has no financial interest in the property or credit transaction, and has training in valuing manufactured homes. An example would be an appraisal conducted according to procedures approved by the U.S. Department of Housing and Urban Development (HUD) for existing (used) home-only loans.
  • July 18, 2015
  • Time: All Day
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