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#1805356 - 04/17/13 12:59 PM Clarification needed on HOEPA & HMPL
happynow72 Offline
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Joined: Apr 2013
Posts: 21
For both HOEPA & HPML... does it apply to both purchase & refinance of the borrowers primary residence? Needing assistance as I wasn't able to locate anything in the Reg other than it stating it covers the borrowers primary residence. It's not stating whether it's only for a purchase or a refinance.

Thank you for your help!

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#1805358 - 04/17/13 01:02 PM Re: Clarification needed on HOEPA & HMPL happynow72
rlcarey Offline
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rlcarey
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Galveston, TX
For example:

§1026.35 Requirements for higher-priced mortgage loans.

(a) Definitions. For purposes of this section:

(1) "Higher-priced mortgage loan" means a closed-end consumer credit transaction secured by the consumer's principal dwelling with an annual percentage rate that exceeds............

As you said, there is no mention of purchase/refinance in the HMPL rules. The only differentiation is what lien position you might be in. It covers both.
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#1805423 - 04/17/13 02:24 PM Re: Clarification needed on HOEPA & HMPL happynow72
RR Joker Offline
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The Swamp
However, for HOEPA (and I realize Randy is giving examples of how you would determine...but if you don't know what a Residential Mortgage Transaction is, you may not realize HOEPA exempts (for now until January when the rules change)
purchase transactions.

(2) This section does not apply to the following:

(i) A residential mortgage transaction.

(24) Residential mortgage transaction means a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained in the consumer's principal dwelling to finance the acquisition or initial construction of that dwelling.
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#1805511 - 04/17/13 03:50 PM Re: Clarification needed on HOEPA & HMPL happynow72
happynow72 Offline
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Joined: Apr 2013
Posts: 21
Thank you to both of you!! I've recently started at a new place and left ALL my compliance information behind. Didn't think I'd need it as I'm not responsible for compliance here. I however have come across a few items that concerned me and so now I'm racking my brain trying to remember all the intricate details. I haven't been responsible for compliance in over 3 years. I'll try to keep my questions to a minimum!!

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#1805770 - 04/17/13 07:55 PM Re: Clarification needed on HOEPA & HMPL RR Joker
happynow72 Offline
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Joined: Apr 2013
Posts: 21
Now we aren't on the same page with the points and fees. I've read in the reg that it states a Mortgage is covered if the total points and fees payable by the consumer at or before loan consumation exceedws the GREATER of $625.00 or 8% of the total loan amount. The LOS system that is currently being used us defining that number as 5%...

Did I miss something???

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#1805776 - 04/17/13 08:07 PM Re: Clarification needed on HOEPA & HMPL happynow72
raitchjay Offline
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Under the current HOEPA rules, yes, the greater of $625 or 8% of the total loan amount. Does your LOS test your loans for HOEPA status (probably i'm guessing...just checking as here, i or sometimes a processor will test them manually using the BOL HOEPA tool)? I really have no idea where your LOS would be coming up with 5%. Do you have a copy of the BOL HOEPA worksheet? If you want to do it manually, it's a great tool for it.
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#1805781 - 04/17/13 08:17 PM Re: Clarification needed on HOEPA & HMPL raitchjay
happynow72 Offline
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Joined: Apr 2013
Posts: 21
I caught this because I asked them to implement a double-check as I noticed issues with the index that was being used. When it triggered based on fees I asked a co-worker to show me the system set up in their LOS and it shows 5% tolerance. Makes me wonder what else I will find!!

Yes, thank you! Atleast I'm able to easily find the tools that are out here on this website. I'm still so frustrated that I didn't bring all the tools I created while at my old job. Oh well! Atleast I have this forum as an option for helping me when I can't find what I need.

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#1805807 - 04/17/13 08:54 PM Re: Clarification needed on HOEPA & HMPL happynow72
Dan Persfull Online
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Dan Persfull
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Bloomington, IN
Effective 1/10/14 the percentage will be 5%. Maybe they jumped the gun.

The transaction’s points and fees exceed 5 percent of the total transaction amount or, for loans below $20,000, the lesser of 8 percent of the total transaction amount or $1,000 (with the dollar figures also adjusted annually for inflation); or
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