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#1422064 - 07/30/10 03:47 PM True or False?
Laketime Offline
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Joined: Aug 2002
Posts: 554
Re: HPML loans

True or False:

As far as which weekly APOR rate to look at....it doesn't matter what the interest rate was the week the loan interest rate was actually set ( the approved rate verbally communicated to the borrower), but instead you must look at the date of loan closing and calculate the APOR rate from the previous Monday's rate table rate to determine if you have an HPML.

T or F?

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#1422066 - 07/30/10 03:48 PM Re: True or False? Laketime
CHR Offline
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CHR
Joined: Jun 2009
Posts: 122
Just go here and do the test. http://www.ffiec.gov/ratespread/newcalc.aspx

If you get anything but NA you have an HPML.
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#1422107 - 07/30/10 04:10 PM Re: True or False? CHR
Way Out West Offline
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Joined: Jun 2001
Posts: 246
San Francisco
Don't know if IRC answered the question, but I say false. The date you use is the date the rate is set or locked, not the date the loan closes. See the Commentary at section 226.35(a)(2)-3. If the rate is locked at application, the application date is the date you use. The only way you would use the closing date is if the rate floats all the way up to closing, which is typical in a lot of consumer loans (HE loans, 2nds, etc.).

If you want to get technical, I would say even the closing date is suspect. You have to draw docs a couple days before closing, so the rate has to be set then, right? For loans which float until closing, we always used to use the doc draw date as the date for determining when the rate is "set."
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#1422110 - 07/30/10 04:12 PM Re: True or False? Way Out West
CHR Offline
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CHR
Joined: Jun 2009
Posts: 122
yes you use the date the rate is locked. At least that is what we do.
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#1422143 - 07/30/10 04:32 PM Re: True or False? CHR
Laketime Offline
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Joined: Aug 2002
Posts: 554
Thanks RC and W-O-W. Your responses helped clarify it for me. The loan doc preparer is actually the employee who does our re-calculations checking for HPMLs. The APR is normally unchanged with the final loan docs (assumes there are no changes later) so really it could be calculated earlier from the ETIL cross-checked with the rate lock week from the APOR (or like RC states, just enter the correct rate lock date AND the rate lock date and we'll be fine. The employee was always using the closing date for rate lock date, but our rates on these HE closed-end loans are not floating until closing.

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