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#1282265 - 11/06/09 08:44 AM Avoiding the HPML Threshold
Cale_N_Oats Offline
Platinum Poster

Registered: 08/14/08
Posts: 741
Loc: Southern Illinois
I recently got back from a Compliance seminar and one thing that was discussed was higher priced mortgage loans. One suggestion for manuvering around the HPML threshold would be to make a first mortgage for a low amount at a lower rate and then make a second mortgage for the larger amount. This would give you a little more wiggle room since with the second lien you would be looking at a 3.5% threshold rather than the entire amount on a first lien at a 1.5% threshold. Does anyone know if the regulation prohibits this or has their been and commentary on the matter?
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Lending Compliance
#1282278 - 11/06/09 08:56 AM Re: Avoiding the HPML Threshold [Re: Cale_N_Oats]
Sinatra Fan Online
Power Poster

Registered: 07/19/02
Posts: 5343
Loc: New Jersey
As long as neither loan is an open-end loan, I think you may be OK. 12 CFR 226.35(b)(4) specificially prohibits structuring a home loan as an open-end loan to evade the requirements of the HPML section.

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#1282708 - 11/06/09 12:54 PM Re: Avoiding the HPML Threshold [Re: Sinatra Fan]
Cale_N_Oats Offline
Platinum Poster

Registered: 08/14/08
Posts: 741
Loc: Southern Illinois
Thats what i thought too. Besides totally spitting in the face of the regulation i couldn't find anything wrong with it either.
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#1282716 - 11/06/09 01:03 PM Re: Avoiding the HPML Threshold [Re: Cale_N_Oats]
Truffle Royale Offline

10K Club

Registered: 07/09/03
Posts: 14272
And I STILL don't get the big deal with HPML that it has to be manuvered around. Seriously, what are people trying to avoid and why? I'd rather make a borrower escrow than have to duck and weave around my examiners.
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#1282800 - 11/06/09 02:02 PM Re: Avoiding the HPML Threshold [Re: Truffle Royale]
Cale_N_Oats Offline
Platinum Poster

Registered: 08/14/08
Posts: 741
Loc: Southern Illinois
haha, i hear you Truffle, this was just something brought up by some old school banker that will eventually come back to bite him. I personally don't find anything wrong with escrowing, it's not hard most of it is automated.
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