Totally confused! With the new High Cost rules relying on 5% ... or 8%.... I thought the 632 threshold was on for the first 9 days of January. Can anyone explain how it would still apply?

It depends on when you received the application. If it was received before 1/10/14, the old rules applied.

You can see the old rules and the new ones here: http://www.bankersonline.com/regs/12-1026/12-1026-032-2013.html

If the application is received on or after 1/10/14, the new rules apply.

John:

Thanks for your quick response,
that's what I thought, but listened to a webinar last Thursday and the presenter stated the 632 still applied as a floor, I didn't understand what he meant so I asked the question and he stated it still applied.

His statement doesn't make sense without context. And what's the reference to 632?

"Combined points and fees threshold that triggers HOPEA/Section 32 coverage increased to $632." That is directly from the material. While I understood that fine for all applications prior to the 10th. It's when he stated it serves as a floor and only comes in play for very small amount loans 5% or 632 whichever is less, under the new rules where he lost me.

Oh! I was hung up by the coincidence of section 32, I guess. The $632 points and fees trigger applies to loans for which the application is received before 1/10/14, regardless of when the loans finally close. The new points and fees triggers apply to loans for which the application is received on or after 1/10/14. The $632 figure is new for 2014. It was $625 last year.

So, the $632 threshold only has relevance for applications taken prior to June 10 of this year right? Then $1000 is the threshold for new applications, and it will be adjusted (i would assume up, not down) next January, correct?

Raitchjay:

That is my understanding, (which I was confident in until last Thursday)

January 10

And yes I believe they are planning annual adjustments to the new thresholds.

Oops......January 10th is what i meant.

Thanks.