Skip to content
BOL Conferences
Thread Options
#1255299 - 09/23/09 02:59 PM HPML & Loan Pricing Guidelines
lds1958 Offline
Platinum Poster
Joined: Oct 2006
Posts: 508
Does your bank have a loan pricing guideline that you give your loan officers for your home loans? If so, do you list the actual rates they can charge or do you put a statement on there that tells them to refer to the HPML limits?

Thanks

Return to Top
Lending Compliance
#1255524 - 09/23/09 05:25 PM Re: HPML & Loan Pricing Guidelines lds1958
CompDat Offline
Platinum Poster
Joined: Dec 2005
Posts: 553
USA
Any bank should have these. If you don't, I am not sure how you passed your fair lending reviews.

Return to Top
#1255545 - 09/23/09 05:38 PM Re: HPML & Loan Pricing Guidelines lds1958
upstateNY Offline
Platinum Poster
Joined: Apr 2003
Posts: 933
New York State
Absolutely, we have published rate sheets, from which the lenders must not vary.

Return to Top
#1255595 - 09/23/09 06:08 PM Re: HPML & Loan Pricing Guidelines upstateNY
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,351
Our lenders are given rate guidelines (can't deviate). HPML spreads are not an issue with our lenders. Since the HPML is based on the APR, rather than the loan rate, there's really no way for the lender to know if the loan has hit the HPML trigger or not.....and we're not tryng to avoid HPML. If a loan hits the trigger, it does. We already verify borrower's ability to repay with documentary proof....we already give weight to "mortgage obligations" with respect to the borrower's ability to repay. The only change we've made is that we no longer offer a 5-year balloon term...period. If a balloon loan is desired, seven years is the minimum and is generally our standard product. Then the HPML is reported on the HMDA Lar.
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#1256033 - 09/24/09 03:32 AM Re: HPML & Loan Pricing Guidelines swiggles
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,601
Ohio
We also have a rate sheet for the lenders to use. We have performed the HPML test on all the APRS on the rate sheet and currently all our products have been identified as HPML's. And like swiggles we already underwrite our loans based on the ability to repay (including escrow items even if they do not escrow) with supporting documentation. Based on our findings we only need to make two changes: 1) We will no longer offer our 1/1 and 3/1 ARM pre-payment penalty products and 2) Effective April 2010 we will start requiring escrow accounts on all loans subject to Reg Z. Which pretty much means that they will now have a savings account that they can close after the first 12 months.

We feel the 10/01/09 requirements will go smoothly within our shop. We're a bit more challenged with the 01/01/10 requirements.

Return to Top
#1256035 - 09/24/09 03:45 AM Re: HPML & Loan Pricing Guidelines jlroberts
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
"Which pretty much means that they will now have a savings account that they can close after the first 12 months"

Well, it is a little more complicated than that. You have to establish the escrow account, provide an initial statement, make the required payments on time, abide by the accounting rules for the account, provide annual statements, etc.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1256037 - 09/24/09 04:03 AM Re: HPML & Loan Pricing Guidelines rlcarey
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,601
Ohio
Not complicated at all since we are aware of our responsiblities for establising and the administration of an escrow account. smile I am glad you clarified that, especially for those creditors out there that have never had escrow accounts.

Return to Top
#1256063 - 09/24/09 12:40 PM Re: HPML & Loan Pricing Guidelines jlroberts
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
You will also need to check your state laws as some states require you to pay interest on escrow accounts.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1256167 - 09/24/09 02:14 PM Re: HPML & Loan Pricing Guidelines Dan Persfull
#Just Jay Offline
10K Club
#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
Originally Posted By: Dan Persfull
You will also need to check your state laws as some states require you to pay interest on escrow accounts.


And even set the rate for you. At least they do here.
_________________________
I don't repeat gossip, so listen closely...

Return to Top
#1256443 - 09/24/09 06:05 PM Re: HPML & Loan Pricing Guidelines #Just Jay
Runnin' on Empty Offline
100 Club
Joined: Aug 2002
Posts: 149
We would like to price our loans so that we can avoid as many HPML's as possible. To accomplish this, we need to change rates weekly, right?

If anyone has a method of automating the bank rates to avoid HPML's...please advise me.

Return to Top
#1256613 - 09/24/09 07:33 PM Re: HPML & Loan Pricing Guidelines Runnin' on Empty
Runnin' on Empty Offline
100 Club
Joined: Aug 2002
Posts: 149
Bump.

Return to Top

Moderator:  Andy_Z