I am reading through the example in the reg. It seems backward to me. If the initial rate is less than 1% over APOR then you can take out 2% of the discount of the points/Fee test. But, if the initial interest rate is more than 1% of the APOR but not more than 2%, then you can only take 1% of the discount out of the points/fees test.

I am getting this right?

Daze and Confused - again!