Some jumbo investors require a second appraisal at all times. Others may only require a second appraisal when the loan amount exceeds a specific amount (like $1,500,000 or $2,000,000).
Under the rule, a mortgage loan is an HPML if it is a closed-end transaction, secured by a consumer's principal dwelling, and has an interest rate above a certain threshold, as described in more detail below.
The cost of only one (1) of the appraisals may be charged to the consumer/applicant. The other appraisal will be an expense of the lender.
There are a few reasons why a lender might order a second appraisal. One reason could be that the first appraisal came in lower than the loan amount the borrower requested. In this case, the lender may want a second opinion to ensure the property is actually worth the loan amount.
There are going to be some instances where you're required to get two appraisals, usually only on a jumbo loan. And usually only on jumbo loans that are over $1.5 million.
The perception of a threat triggers a secondary appraisal: judgment of the options available to cope with a stressor, as well as perceptions of how effective such options will be (Figure 2.2).
If the consumer is applying for an HPML to buy a flipped property, an additional appraisal is required if the price reflected in the consumer's purchase agreement is a certain amount higher than the seller's acquisition price.
Under the ECOA Valuations Rule: When you receive a mortgage loan application, you have three business days to notify the applicant of the right to receive a copy of appraisals and other written valuations. You must promptly share copies of appraisals and other written valuations with the applicant.
The lender must also report suspected overt violations of anti-discrimination laws to the proper local, state, or federal agency. In the event of these occurrences, the lender may obtain a second or subsequent appraisal report.
A higher-priced mortgage loan (HPML) is a mortgage with an annual percentage rate (APR) that's higher than the average prime offer rate (APOR) offered to well-qualified borrowers.
From January 1, 2024, through December 31, 2024, the threshold amount is $32,400. xii. From January 1, 2025, through December 31, 2025, the threshold amount is $33,500.
For first-lien HPMLs that are covered by the HPML Appraisal Rule, the disclosure requirements overlap with the ECOA Valuations Rule. The ECOA Valuations Rule implements Dodd-Frank Act amendments to ECOA, which require you to provide consumer disclosures and free copies of appraisals and other written valuations.
A real estate appraisal determines a property's value in several ways. Generally, you only need one, but it's possible to get more. Obtaining different appraisal values provides benefits as the property not only serves as security for a mortgage or loan.
Re-Use of Appraisal. Appraisals cannot be re-used after the mortgage for which the appraisal was ordered has closed. For example, an appraisal used for the purchase of a property cannot be used again for a subsequent refinance, even if the appraisal is within the 120 day validity period.
Unfortunately, not all lenders will let you skip the in-person appraisal process when you're buying a home. And without an appraisal to guide you on its market value, you might overpay for that home you're buying.
Lenders have no obligation to share or “release” an appraisal with other lenders. New lenders often need a formal “release” of an appraisal from the previous lender, whose name is on the appraisal, before the new lender can use the appraisal for lending purposes.
Dodd-Frank Act & Appraisals
The Dodd-Frank Act corrected this “loophole” with guidelines intended to ensure that home appraisals being done are accurate, fair, and realistic while also prohibiting brokers from pressuring appraisers to provide higher valuations.
Part 2 - The 91-180 day flip rule
It states that if there sale date of the property falls between 91-180 days following the seller's acquisition of the property, AND if the property is being sold for 100% or more over the price paid by the seller to acquire it, then a second appraisal of the home is required.
All federally related transactions having a transaction value of $1,000,000 or more shall require an appraisal prepared by a State certified appraiser.
The answer is it has an APR that exceeds the rate for Treasury securities with a comparable rate of maturity by 6.5 percentage points. Having an APR that exceeds the rate for Treasury securities with a comparable rate of maturity by 6.5 percentage points is not a characteristic of an HPML.
Therefore, if it is a HELOC, it's exempt from HPML as Dan said. Sec. 226.5b Requirements for home equity plans.
In real estate, securing a second appraisal entails seeking an additional valuation for a property. Moreover, ordering an appraisal is often deemed necessary when the initial appraisal's value is lower than expected.
Secondary appraisal involves people's evaluation of their resources and options for coping (Lazarus, 1991). One aspect of secondary appraisal is a person's evaluation of who should be held accountable. A person can hold herself, another, or a group of other people accountable for the situation at hand.
Primary appraisal is concerned with the evaluation of how (potentially) harmful a particular situation is. Secondary appraisal is concerned with the evaluation of whether the individual possesses the resources to successfully face the demands of the situation.