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New High Cost Mortgage Trigger

The Home Ownership and Equity Protection Act of 1994 requires the Federal Reserve Board to adjust the total amount of "total points and fees" paid by the borrower that triggers the additional disclosures under Truth in Lending. The additional disclosures for these loans, which are often referred to as "high cost mortgages," are contained in Section 226.32 of Regulation Z.

Effective January 1, 1997, the new trigger amount is $424. The adjustments are made based on the Consumer Price Index (CPI). The rate for 1995 was $400; the rate for 1996 was $412. The increase to $424 for 1997 reflects increases in the CPI.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 20, 12/96

First published on 12/01/1996

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