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#37370 - 10/16/02 06:12 PM Hoepa & ARM
Jodi Online
Member
Jodi
Joined: Jun 2002
Posts: 87
Situation: 10 year adustable rate mortgage (1st), rate will be prime + 3 (7.75), floor of 6, ceiling of 18. For the Hoepa APR Test, I'm assuming you would test the APR from the initial rate of 7.75. Is this correct??????

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Lending Compliance
#37371 - 10/16/02 06:22 PM Re: Hoepa & ARM
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
Without going to the reg. I believe your are correct. If my memory serves me right, your test is based on the APR at the time of consumation.
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#37372 - 10/16/02 06:23 PM Re: Hoepa & ARM
Gotwood Offline
Platinum Poster
Joined: May 2001
Posts: 715
Yes, you are correct. The floor and ceiling rates are irrelevant for the APR test. It is what you are charging on day one that the test is based on.

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#37373 - 10/16/02 09:19 PM Re: Hoepa & ARM
redsfan Offline
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redsfan
Joined: Dec 2000
Posts: 3,455
The Pennant Race
You have to calculate the APR and go from there. The initial rate only has bearing to the extent that it impacts the APR.

Compare the APR to the 10-year constant maturity treasury yield for the 15th of the preceding month, and you have your APR test.
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