TILA appraisal exemption for higher-priced mortgages increasing to $27,200 in January

The appraisal exemption threshold under Regulation Z (Truth in Lending Act) for higher-priced mortgage loans (HPMLs) is rising from $26,700 to $27,200 as of Jan. 1, 2020, according to a filing with the Federal Register.

The notice of final rule, along with official interpretations and commentary, is being issued jointly by the Federal Reserve Board, the Consumer Financial Protection Bureau (CFPB), and the Office of the Comptroller of the Currency (OCC) and is scheduled to publish in the Register Wednesday.

Section 129H of the Truth in Lending Act (TILA) establishes special appraisal requirements for “higher-risk mortgages,” termed “higher-priced mortgage loans” or “HPMLs” in the agencies’ regulations. The CFPB and the federal regulators of banks and credit unions issued joint final rules to implement the requirements, which took effect in January 2014. These rules exempted, among other loan types, transactions of $25,000 or less and required that this loan amount be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

According to the notice, the $500 increase in the exemption threshold for 2020 is based on the CPI-W in effect on June 1, 2019 (and which was reported May 10, 2019).

Appraisals for Higher-Priced Mortgage Loans Exemption Threshold