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Handling ACH Origination Exception Issues
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Required Training for Loan Originators
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#1455895 - 10/15/10 03:58 PM HPML - rate spread
odimel2 Offline
100 Club

Registered: 09/23/08
Posts: 129
Loc: Las Vegas, NV
I need a little clarification on HPMLs. If you run the FFIEC rate spread calculator and the end result rate spread is above 1.50%, is this not a High Priced Mortgage Loan?

I have seen a HPML Checklist & Worksheet where it plugs in certain numbers and it ends up stating the loan is NOT an HPML loan even though the spread is above the 1.50%

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Lending Compliance
#1455905 - 10/15/10 04:10 PM Re: HPML - rate spread [Re: odimel2]
raitchjay Online
Power Poster

Registered: 10/15/09
Posts: 4262
Loc: OK
1.5 points for a first lien; 3.5 for a subordinate lien. Maybe the loan you are looking at is a subordinate lien?
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#1455918 - 10/15/10 04:23 PM Re: HPML - rate spread [Re: raitchjay]
odimel2 Offline
100 Club

Registered: 09/23/08
Posts: 129
Loc: Las Vegas, NV
No, it is a first position mortgage.. i just wanted to know if the rate spread calculator shows the spread is over 1.5%, does this mean the loan is a HPML irregardless of any other requirements?

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#1455925 - 10/15/10 04:26 PM Re: HPML - rate spread [Re: raitchjay]
Dan Persfull Offline
10K Club

Registered: 08/28/02
Posts: 39999
Loc: Bloomington, IN
Quote:
I have seen a HPML Checklist & Worksheet


You by chance aren't using the HOEPA worksheet are you? They are two entirely different animals.

http://www.bankerscompliance.com/assets/files/documentation/HOEPA%202009-1.xls
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1455932 - 10/15/10 04:30 PM Re: HPML - rate spread [Re: odimel2]
raitchjay Online
Power Poster

Registered: 10/15/09
Posts: 4262
Loc: OK
If it's secured by the primary residence of the borrower(s), can't be exempted from Sec. 35 of Reg Z as temporary financing, or exempted from Reg Z altogether, yes.
_________________________
"There are only two rules of war. Never invade Russia. Never invade China. Never invade Russia or China."

B. Montgomery


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#1455940 - 10/15/10 04:38 PM Re: HPML - rate spread [Re: odimel2]
Dan Persfull Offline
10K Club

Registered: 08/28/02
Posts: 39999
Loc: Bloomington, IN
Originally Posted By: kthiessen2700
No, it is a first position mortgage.. i just wanted to know if the rate spread calculator shows the spread is over 1.5%, does this mean the loan is a HPML irregardless of any other requirements?


HPML - exemptions are noted in 226.35(a)(3)

1st lien - 1.5% or greater

Subordinate lien - 3.5% or greater


HOEPA - exemptions are noted in 226.32(a)(2)

1st lien - 8% or greater

Subordinate lien - 10% or greater
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1455944 - 10/15/10 04:42 PM Re: HPML - rate spread [Re: Dan Persfull]
odimel2 Offline
100 Club

Registered: 09/23/08
Posts: 129
Loc: Las Vegas, NV
so to reconfirm, if the FFIEC rate spread calculator reflects a spread that is over 1.5%, that means the loan is a HPML right?

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#1456044 - 10/18/10 08:33 AM Re: HPML - rate spread [Re: odimel2]
Carolina Blue Online
Platinum Poster

Registered: 07/22/05
Posts: 541
Loc: Lost in a regulatory fog
Yes, but just to clarify. If you plug the numbers into the FFIEC rate calculator and the calculator gives you ANY number back, then that number is the rate spread and the loan is a HPML. The calculator factors in the applicable threshold when doing the calculation so you don't have to determine. Only if you get back "N/A" is the loan then below the threshold and is not HPML.

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