New federal rules proposed Wednesday would require all high-risk mortgage lenders to obtain property appraisals for the first time.
Under the new procedure, all mortgages deemed risky would require an appraisal by a licensed or certified appraiser, including a written inspection of the home’s interior, according to regulators including the Federal Reserve and the Consumer Financial Protection Bureau. Previously, there was no universal federal requirement that appraisals be done for all risky mortgages.
Consumers would receive more information, including a free copy of the appraisal, the agencies said.
A second appraisal would be required if the seller bought the home at a lower price in the previous six months. The provision is meant to prevent fraudulent flipping of properties using inflated appraisals.
The rule is open for public comment until Oct. 15.
REAL ESTATE
Home-builder confidence at 5-year-high in August
LOS ANGELES — U.S. home builders have become more confident in the housing recovery in August, as many reported that prospects for sales are the best they’ve been since the housing bubble burst five years ago.
The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday rose 2 points this month to 37, up from 35 in July. That’s the highest reading since March 2007.
The index, which is based on responses from 478 builders, has been trending higher since October and only dipped once since January. That suggests a turnaround in housing is solidifying after years of stagnation.
Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached that level since April 2006, the peak of the housing boom.
AIRLINES
Agency: Raises owed to some United retirees
A long-running dispute over pensions at United Airlines will end with small raises for some retirees.
The federal agency that took over United’s pensions in 2005 during its bankruptcy said Wednesday that 8,247 United retirees — about 18 percent of pensioners — will get small raises of 1 percent or less.
United retirees have long claimed that the federal Pension Benefit Guaranty Corp. undervalued the $7.3 billion in assets it got from United when it walked away from its pension plans. The agency now says it undervalued the pension assets by less than 1 percent, or $58 million.
United’s pension had some 2,000 different assets when the PBGC took it over, including swaps and options, limited partnerships, as well as the more common stocks and bonds, PBGC spokesman Marc Eiger said. The limited partnerships were the hardest to value correctly, he said.
Most United retirees are not getting raises because they were already receiving their full pension. But some workers, especially pilots, were forced to take smaller pensions than they expected. So their payouts will rise. Pilots will get an additional $33.68 per month on average, the PBGC said.
• From wire dispatches and staff reports
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