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EGRPRA Report Sent to Congress; No Increase in Residential Threshold Proposed

by Jennifer Aguilar | Mar 22, 2017

The Federal Financial Institutions Examination Council (FFIEC) has sent to Congress the final report arising from the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review process. Based on “considerations of safety and soundness and consumer protection, [FFIEC does] not currently believe that a change to the current $250,000 threshold for residential mortgage loans would be appropriate.” Numerous appraisal organizations, including ASA, the National Association of Independent Fee Appraisers, and the American Society of Farm Managers and Rural Appraisers had opposed any increased in the threshold in a December 2015 letter to FFIEC as part of the EGRPRA process.

It was also noted in the report that FFIEC had consulted the Consumer Financial Protection Bureau (CFPB) for its views on the residential real estate threshold, and that CFPB responded that it had “concerns about potential risks to consumers resulting from an expansion of the number of residential mortgage transactions that would be exempt from the Title XI appraisal requirement.”  FFIEC did, as part of the process, increase the threshold for commercial real estate loans from $250,000 to $400,000, but also chose not to change the current $1 million threshold on business loans secured by real estate.

To read the original letter from numerous appraisal organizations opposing an increase in the threshold, click here. To read the full EGRPRA report, click here.