Federal regulators unleashed the standard appraisal requirements for higher-priced loans last week, but attorneys at Ballard Spahr say it will have little ‘practical effect,’ because there is an exemption for loans that meet qualified mortgage requirements.

“Once the ability-to-repay rule is implemented on January 10, 2014, it is anticipated that at least initially mortgage lenders will confine the loans that they make to qualified mortgages,” Ballard Spahr attorneys wrote in the firm’s financial news letter.

The firm added: “The final rule establishes requirements for obtaining an appraisal on the security property before a lender may make a higher-priced mortgage loan. The final rule uses a modified version of the current definition of ‘higher-priced mortgage loan’ under Regulation Z.”

“A loan meets this definition if it is secured by the consumer’s principal dwelling and the annual percentage rate exceeds the applicable average prime offer rate by 1.5 percentage points for a first-lien non-jumbo loan, 2.5 percentage points for a first-lien jumbo loan, or 3.5 percentage points for a junior-lien loan.”

Click here to read the full Ballard Spahr report.