On November 13, financial regulatory agencies including the Consumer Financial Protection Bureau (CFPB), Office of the Comptroller of the Currency (OCC), and the Federal Reserve (the Fed) collaborated to announce finalized amendments to the official interpretations for regulations implementing Section 129H of Truth in Lending Act (TILA). This section typically holds specific appraisal requirements for “higher-risk mortgages”, also referred to as “higher-priced mortgage loans” (HPMLs). These updates were introduced by global law firm Orrick, Herrington & Sutcliffe LLP.[1]
The recent amendments aim to modify TILA’s loan exemption thresholds regarding these appraisal requirements for HPMLs, resulting in increased levies. Notably, this development is part of a broader trend among financial institutions focusing on HPML regulatory standards, which reflects the increasing significance of HPMLs in mortgage lending practice and regulatory compliance.
These revisions may impact several layers of the mortgage industry, particularly for firms that utilize HPMLs as part of their lending portfolio. For lenders, an understanding of the new exemptions and their potential implications on their business operations is essential.
Legal professionals in large corporations and law firms must acquaint themselves with the nuances of these changes and how the newly-adjusted standards compare with previous TILA thresholds. This necessary knowledge will assist in advising clients accurately and thoroughly amidst the constantly evolving regulatory landscape.