I have a question about HOEPA. If a loan is done for home improvement but the property is a vacation home (not primary residence) is this subject to HOEPA? I have been reading and it appears that it would not be HOEPA, however, I submitted my HMDA data and I get a quality edit on my report that says it should be HOEPA because the rate spread is 9.37 (which I know would be HOEPA if it was a primary residence but this is a camp house). Is this HOEPA or not???

Loans not subject to Reg Z should have NA in the rate spread. (Appendix A G.1.b) Take the spread out, put NA in and you should be fine.

If the loan is secured my the consumer's primary residence then HOEPA applies.

TR, this loan was a HI loan for a vacation home, therefore it would be a consumer purpose loan subject to Reg. Z. They can't use NA in the rate spread field unless it calculates under the thresholds.

I thought it had to be primary residence for Reg Z? I'm reading the Reg again now and I don't see where it says second homes are in there. Granted, if the loan is secured by their primary residence, then I get your point, Dan, but the original poster didn't say that.

The purpose of the loan is a consumer purpose, therefore it is subject to Reg. Z and they have to put a rate spread on the LAR if one is applicable.

It does have to be the primary residence to be subject to HOEPA, but it does not to be subject to Reg. Z.

So if it has to be primary residence for HOEPA, the original poster should still put NA in the HOEPA box to clear their problem, correct?

If the loan is not secured by the primary residence then the loan is not subject to HOEPA and Code 2 (Not HOEPA) would be the appropriate entry in the HOEPA Status field.

I put Code 2 in the HOEPA field. However, the problem is that the rate spread is 9.30 so the HMDA quality edit report is telling me since my rate spread is greater than 8.00 it is HOEPA. It is subject to Reg Z correct???

Quality edits are just a reminder to make sure that your data is correct. It sounds like yours is.