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HPML Appraisal & Regulation Z and Regulation M Exemption Amounts Hold Steady for 2021

The Federal Reserve Board and the Consumer Financial Protection Bureau jointly issued an increase in the exemption thresholds for Regulation Z and Regulation M, which are tied to the Consumer Price Index. Loans or leases at or below the thresholds are subject to the protections of the regulations.

The regulators have released the new index limit for 2021 effective January 1, 2021; it is $58,300, thus no change from 2020.

Keep in mind that private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act, regardless of the loan amount.

Revisit your loan origination systems and training for Bank personnel to ensure they are updated in time to enact the change.

Also, the Office of the Comptroller of the Currency (OCC), Federal Reserve Bank (FRB) and Consumer Financial Protection Bureau (CFPB) released the revised exemption threshold for appraisals required for higher priced mortgage loans (HPML) effective January 1, 2021. The limit began at $25,000 and is adjusted annually for inflation. The figure for 2021 remains at $27,200, thus no change from the 2020 figure. Loans which may be HPMLs with dollar amounts below this figure would be exempt from the requirement to obtain a written appraisal from a certified or licensed appraiser.

TCA, A Better Way provides you with regulatory information from a compliance professional’s viewpoint. Contact us at [email protected] or at 800-934-7347 if you have any questions!

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