If anyone has looked at the CFPBs proposed HOEPA rules, they are now including HELOCs under HOEPA rules. I have always considered our HELOC open-end credit....we have a 10 year draw and 10 year payback...all variable rate. The new proposed HOEPA states that variable rate loans for HOEPA determination will be based on the highest margin. Unlike ARMs, our HELOCs have no margins, only a rate cap. So, would our HELOC product be bound by the variable requirement or the open-end requirement? Any thoughts?

I have not read this to any extent but what I did skim over it appears HELOCs will have the APR compared to that of the closed-end credit transaction's APOR that is most comparable to the open-end plan. I'm not quite sure how they are going to do this because open-end plans do not really compare to closed-end plans in their terms, repayment or rate adjustments.

I honestly can see the community banks getting out of mortgage lending all together. The cost and risks are really beginning to get to the point they are no longer worth it to the smaller community banks.