§3356 Exemption from appraisals of real estate located in rural areas

Summary

An appraisal is not required for certain federally related loans on rural property if all these things happen. Mortgage originator — means what that term means in section 1602 of title 15. Transaction value — means the amount of the loan, including loans that are part of a pool. The property must be in a rural area as described in 12 C.F.R. 1026.35(b)(2)(iv)(A). Within 3 days after the Closing Disclosure is given to the borrower, the mortgage originator or its agent must contact at least 3 State certified or State licensed appraisers on its approved list and record that none were available within 5 business days beyond normal fee and timing standards. The loan amount must be less than $400,000, and the mortgage originator must be supervised by a Federal financial institutions regulatory agency. The mortgage originator generally cannot sell or transfer the loan after making it without an appraisal, except if the sale is because of the originator’s bankruptcy or failure; the buyer is another federally regulated institution that keeps the loan in its portfolio; the transfer happens because of a merger or acquisition; or the loan is sold to a wholly owned subsidiary but remains an asset of the originator for regulatory accounting. The appraisal exemption does not apply if a Federal regulator requires an appraisal under 12 C.F.R. 225.63(c), 323.3(c), 34.43(c), or 722.3(e), or if the loan is a high-cost mortgage as defined in section 1602 of title 15. Each Federal regulator must check that originators making many of these loans follow the contact-and-document rules.