Dodd-Frank Compliancy

Appraiser Independence Compliancy: The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) is a federal statute in the United States that was signed into law on July 21, 2010. Title XIV is the Mortgage Reform and Anti-Predatory Lending Act and Section F deals with Appraisal Activities. On October 18 2010, the Federal Reserve Board announced an interim final rule to ensure appraiser independence. This rule eliminates the current appraiser independence rules in Reg Z at 226.36(b) that were added last year, but those rules will stay in effective until April 1, 2011, at which time compliance with this rule will be mandatory.

The interim rule implements new section 129E of the Truth-in-Lending Act (TILA), which was added by section 1472 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It establishes new requirements for appraisal independence for consumer credit transactions secured by the consumer's principal dwelling. The amendments are designed to ensure that real estate appraisals used to support creditors' underwriting decisions are based on the appraiser's independent professional judgment, free of any influence or pressure that may be exerted by parties that have an interest in the transaction. The amendments also seek to ensure that creditors and their agents pay reasonable and customary fees to appraisers. This rule is substantially similar to the Reg Z amendments that were effective in October 2009, except that they apply to both closed and open-end extensions of credit. These provisions apply to any consumer credit transaction that is secured by the consumer's principal dwelling, including home equity lines of credit (HELOCs). The Dodd-Frank Act mandates that the HVCC shall have no effect, once the board issued this interim final rule.

vmcSelect is the technology that ensures a lender is 100% compliant. Through our Rules Based Ordering, appraisals (or any service for that matter) are assigned based on a rotation, eliminating the loan officer from the equation ensuring complete appraiser independence. All communication is documented and complete audit trails are available for every order. A clearly defined appraisal dispute process further ensures that every appraisal is uninfluenced.

Monitoring the "reasonable and customary" fees charged by appraisers is a daunting task to handle manually, so let us do it for you. We validate fees against industry standards and can provide immediate information for a lenders GFE or HUD.