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#1661282 - 02/06/12 09:34 PM HPML Rate Spread
MSMITH10 Offline
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Does a loan need to be secured by the borrower's PRINCIPAL residence before a rate spread might be calculated or could it be a camp or vacation home and rate spread still apply?

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Lending Compliance
#1661292 - 02/06/12 09:44 PM Re: HPML Rate Spread MSMITH10
raitchjay Offline
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Is this a HMDA question or an HPML question?
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#1661297 - 02/06/12 09:49 PM Re: HPML Rate Spread MSMITH10
raitchjay Offline
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HMDA requires you to report the rate spread if the loan is subject to Reg. Z. A loan is only subject to the HPML test if it is secured by the primary residence of the borrower.
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#1661305 - 02/06/12 09:55 PM Re: HPML Rate Spread MSMITH10
MSMITH10 Offline
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I guess it pertains to both hmda and hpml. I am scrubbing hmda and found some loans that needed to be reported that were not. I was not sure if I needed to check these for a rate spread to enter on the LAR.

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#1661307 - 02/06/12 09:58 PM Re: HPML Rate Spread MSMITH10
raitchjay Offline
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I guess it boils down to this in a way then: a loan subject to Reg. Z secured by a borrower's vacation home that had a numeric rate spread would need to have it reported for HMDA, but having a numeric rate spread that exceeded the threshold for HPML on the same loan would be irrelevant, since the loan wasn't secured by the primary residence of the borrower.
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#1661312 - 02/06/12 10:04 PM Re: HPML Rate Spread MSMITH10
MSMITH10 Offline
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Joined: Sep 2010
Posts: 160
Yikes. I am new to compliance and that just jumped right over my head. I know you report the rate spread if it is greater than 1.5 percentage points on a 1st lien and 3.5 percentage points on a 2nd lien. I also know you can use the FFIEC calculator to figure this. I cant tell from your post if I would put the rate spead on the LAR or if I would leave it off, if it would deal with principal residence or just dwelling secured.

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#1661324 - 02/06/12 10:13 PM Re: HPML Rate Spread MSMITH10
raitchjay Offline
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If your loan is subject to Reg. Z (it's consumer purpose), then report the numeric spread on your LAR. All i was trying to say was that just because you have a numeric spread reported on your LAR doesn't mean that the loan is automatically subject to HPML (if it isn't secured by the borrower's primary residence).
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#1661359 - 02/06/12 10:50 PM Re: HPML Rate Spread MSMITH10
MSMITH10 Offline
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Joined: Sep 2010
Posts: 160
Had to call my consultants but I think I have it now. Thanks so much for your help.

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