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Truth in Lending: Amendment History

[66 Fed. Reg. 65,620 (Dec. 20, 2001); 73 Fed. Reg. 44,610 (July 30, 2008); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 78 Fed. Reg. 6967 (Jan. 31, 2013); 78 Fed. Reg. 30,739 (May 23, 2013); 78 Fed. Reg. 60,382 (Oct. 1, 2013); 78 Fed. Reg. 63,006 (Oct. 23, 2013); 81 Fed. Reg. 84,369 (Nov. 22, 2016); 82 Fed. Reg. 18,975 (Apr. 25, 2017); 83 Fed. Reg. 6364 (Feb. 13, 2018)]

Truth in Lending: 1. Principal dwelling

1. Principal dwelling.453 Section 1026.35(b)(1) applies to principal dwellings, including structures that are classified as personal property under State law. For example, an escrow account must be established on a higher-priced mortgage loan secured by a first lien on a manufactured home, boat, or trailer used as the consumer’s principal dwelling. See the commentary under §§ 1026.2(a)(19) and(24), 1026.15, and 1026.23.

Truth in Lending: 35(b)(1) Requirement to escrow for property taxes and insurance.

Editor’s Note454

1. Administration of escrow accounts.455 Section 1026.35(b)(1) requires creditors to establish an escrow account for payment of property taxes and premiums for mortgage-related insurance required by the creditor before the consummation of a higher-priced mortgage loan secured by a first lien on a principal dwelling. Section 6 of RESPA, 12 U.S.C. 2605, and Regulation X, 12 CFR 1024.17, address how escrow accounts must be administered.

Truth in Lending: 35(b)(3) Cancellation.

Editor’s Note497

1. Termination of underlying debt obligation.498 Section 1026.35(b)(3)(i) provides that, in general, an escrow account required by § 1026.35(b)(1) may not be cancelled until the underlying debt obligation is terminated or the consumer requests cancellation at least five years after consummation. Methods by which an underlying debt obligation may be terminated include, among other things, repayment, refinancing, rescission, and foreclosure.

Truth in Lending: 35(c)(1)(i) Certified or Licensed Appraiser.

Editor’s Note501

1. USPAP.502 The Uniform Standards of Professional Appraisal Practice (USPAP) are established by the Appraisal Standards Board of the Appraisal Foundation (as defined in 12 U.S.C. 3350(9)). Under § 1026.35(c)(1)(i), the relevant USPAP standards are those found in the edition of USPAP and that are in effect at the time the appraiser signs the appraiser’s certification.

Truth in Lending: 35(c)(3)(i) In General.

Editor’s Note528

Editor’s Note529

1. Written appraisal—electronic transmission.530 To satisfy the requirement that the appraisal be “written,” a creditor may obtain the appraisal in paper form or via electronic transmission.

Truth in Lending: 35(c)(3)(ii) Safe Harbor.

Editor’s Note531

1. Safe harbor.532 A creditor that satisfies the safe harbor conditions in § 1026.35(c)(3)(ii)(A) through (D) complies with the appraisal requirements of § 1026.35(c)(3)(i). A creditor that does not satisfy the safe harbor conditions in § 1026.35(c)(3)(ii)(A) through (D) does not necessarily violate the appraisal requirements of § 1026.35(c)(3)(i).

Truth in Lending: 35(c)(4)(i) In General.

Editor’s Note538

1. Appraisal from a previous transaction.539 An appraisal that was previously obtained in connection with the seller’s acquisition or the financing of the seller’s acquisition of the property does not satisfy the requirements to obtain two written appraisals under § 1026.35(c)(4)(i).

Truth in Lending: 35(c)(4)(iii) Relationship to General Appraisal Requirements.

Editor’s Note547

1. Safe harbor.548 When a creditor is required to obtain an additional appraisal under § 1026(c)(4)(i), the creditor must comply with the requirements of both § 1026.35(c)(3)(i) and § 1026.35(c)(4)(ii) through (v) for that appraisal. The creditor complies with the requirements of § 1026.35(c)(3)(i) for the additional appraisal if the creditor meets the safe harbor conditions in § 1026.35(c)(3)(ii) for that appraisal.

Truth in Lending: 35(c)(4)(v) No Charge for Additional Appraisal.

Editor’s Note551

1. Fees and mark-ups.552 The creditor is prohibited from charging the consumer for the performance of one of the two appraisals required under § 1026.35(c)(4)(i), including by imposing a fee specifically for that appraisal or by marking up the interest rate or any other fees payable by the consumer in connection with the higher-priced mortgage loan.

Truth in Lending: 35(c)(5)(i) In General.

Editor’s Note565

Editor’s Note566

1. Multiple applicants.567 When two or more consumers apply for a loan subject to this section, the creditor is required to give the disclosure to only one of the consumers.

Truth in Lending: 35(c)(6)(i) In General.

Editor’s Note569

Editor’s Note570

1. Multiple applicants.571 When two or more consumers apply for a loan subject to this section, the creditor is required to give the copy of each required appraisal to only one of the consumers.

Truth in Lending: 35(c)(6)(iv) No Charge for Copy Of Appraisal.

Editor’s Note575

1. Fees and mark-ups.576 The creditor is prohibited from charging the consumer for any copy of an appraisal required to be provided under § 1026.35(c)(6)(i), including by imposing a fee specifically for a required copy of an appraisal or by marking up the interest rate or any other fees payable by the consumer in connection with the higher-priced mortgage loan.

Truth in Lending: Amendment History

[73 Fed. Reg. 44,613 (July 30, 2008); 76 Fed. Reg. 11,324 (Mar. 2, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 78 Fed. Reg. 4754 (Jan. 22, 2013); 78 Fed. Reg. 10,444 (Feb. 13, 2013); 78 Fed. Reg. 30,745 (May 23, 2013); 78 Fed. Reg. 60,382 (Oct. 1, 2013); 78 Fed. Reg. 78,585 (Dec. 26, 2013); 78 Fed. Reg. 79,286 (Dec. 30, 2013); 79 Fed. Reg. 77,855 (Dec. 29, 2014); 79 Fed. Reg. 78,296 (Dec. 30, 2014); 80 Fed. Reg. 59,944 (Oct. 2, 2015); 80 Fed. Reg. 73,943 (Nov. 27, 2015); 80 Fed. Reg. 79,674 (Dec. 23, 2015); 81 Fed. Reg. 16,074 (Mar. 25, 2016); 81 Fed. Reg. 84,369 (Nov. 22, 2016); 81 Fed.