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#1859228 - 10/07/13 08:22 PM Confusion - High Cost - HOEPA & High priced
Squeakers Offline
Junior Member
Joined: Jul 2013
Posts: 41
Texas
Please help? I have become sooooo confused with the high cost mortgages, HOEPA and High Priced that I can't seem to keep them straight. I could have sworn that High Cost and High Priced were the same definition but can't find it again!

Can/does anyone have a chart or cheat sheet that gives details that they may be willing to share?
I appreciate any help that can be given.

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HOEPA and Homeowner Counseling Rule
#1859235 - 10/07/13 08:30 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
manimal Offline
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manimal
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HOEPA = Section 32 = High Cost Mortgages (see 1026.32)
Higher Priced Mortgage Loans = 1026.35

I will look to see if I can find anything in chart form, but this at least can get you started in the right direction.
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#1859247 - 10/07/13 08:45 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Squeakers Offline
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Texas
Thank you Manimal, appreciate the help!

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#1859266 - 10/07/13 09:11 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
manimal Offline
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manimal
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I can't find a chart that has both sets of requirements, but if you go to BOL's alphabet soup for Reg. Z you can see the requirements are seperated by section. Sorry I couldn't help more!
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#1859270 - 10/07/13 09:15 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Squeakers Offline
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Joined: Jul 2013
Posts: 41
Texas
Appreciate your help Manimal.

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#1859504 - 10/08/13 04:47 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Squeakers Offline
Junior Member
Joined: Jul 2013
Posts: 41
Texas
To continue with my confusion......is there an updated HOEPA worksheet anywhere? I found version 3.0 created by Bankers Compliance Consulting in January 2013 here on BankersOnline, but would the information be correct for the new rules coming in January 2014?

HOEPA does not appear to be my friend...;^(

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#1859526 - 10/08/13 05:19 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Diane Dean Offline
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Joined: Oct 2012
Posts: 92
The 2013 worksheet will not be accurate for the 2014 rules. You may want to check to see if your software provider offers anything.
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#1859696 - 10/08/13 09:29 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Squeakers Offline
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Joined: Jul 2013
Posts: 41
Texas
Thanks Diane Dean, unfortunately my software provider does not. Hoping someone will take pity on me and share their worksheet.

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#1859786 - 10/09/13 02:31 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Diane Dean Offline
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Joined: Oct 2012
Posts: 92
As a member of Bankers Compliance Consulting, which developed the worksheet referenced above, I wanted to expand and clarify that at this point, we are not planning to update the HOEPA Worksheet for the January 2014 rules change regarding High Cost Mortgages (previously HOEPA loans). There are a couple of reasons behind this decision. First, the "APR test" can be completed on the FFIEC's rate spread calculator. Second, the "points and fees test" has changed and is more individualized. There are many mores ifs, ands, and buts regarding whether a charge is considered a point or fee. Thus, trying to create a "one-size-fits-all-banks" calculator would be very difficult. In our discussions with bankers in the last month, we have heard of two software providers that are adding a "points and fees" calculation tool. If your provider does not offer such a tool, you may want to consider putting in a request for one.
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#1874503 - 11/26/13 08:20 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
KTMiteComply Offline
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only if I want to....
Question...have any of you been able to find any software providers that can help with this requirement because I'm positive we are going to need some help on the points and fees testing...

Thanks!
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#1874509 - 11/26/13 08:26 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
dblack Offline
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Posts: 263
AL
We haven't found anything on the provider side, but I used the BCC HOEPA worksheet as a base and changed it around to fit our products and the new rules.
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#1874603 - 11/26/13 11:49 PM Re: Confusion - High Cost - HOEPA & High priced KTMiteComply
Reads Regs Offline
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Our Mortgage LOS has plug-ins that work with two software companies. They told us to investigate the companies and decide who we want to go with. We are going through this process now. Interthinx has a product called PredProtect and QuestSoft has a product called Compliance Eagle.
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#1876931 - 12/06/13 10:00 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Squeakers Offline
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Joined: Jul 2013
Posts: 41
Texas
Here I go again, a question has come up about the FFIEC rate spread and the Treasury rate for the high cost mortgages.

I understood that to calculate a high cost mortgage we would use the treasury rate from the federalreserve.gov BUT someone else has thought the rate should be found on the ffiec.

Help?

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#1876936 - 12/06/13 10:14 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
dblack Offline
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Prior to the new regs you used http://www.federalreserve.gov/releases/H15/default.htm
to find the rate needed for the calculation required by 1026.32

Now you use http://www.ffiec.gov/ratespread/newcalc.aspx
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#1876943 - 12/06/13 10:33 PM Re: Confusion - High Cost - HOEPA & High priced dblack
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The new HOEPA rules apply to loan applications received on or after 1/10/14. http://www.bankersonline.com/regs/12-1026/12-1026-032.html
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#1876953 - 12/06/13 10:58 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Squeakers Offline
Junior Member
Joined: Jul 2013
Posts: 41
Texas
Thank you dblack and Reads Regs!

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#1886987 - 01/15/14 05:46 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
trinna Offline
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trinna
Joined: Oct 2003
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Midwest
Now you use http://www.ffiec.gov/ratespread/newcalc.aspx

This may be a really silly question but is this rate spread calculator used for both HOEPA AND HPMLs??

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#1887008 - 01/15/14 06:11 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
dblack Offline
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It is used for: HMDA, HPML, and HCML(HOEPA).
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#1887167 - 01/15/14 08:26 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
mac444 Offline
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Joined: May 2011
Posts: 77
So for the state high cost APR test for the California is it FFIEC rate spread or the Treasury rate?

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#1887185 - 01/15/14 08:36 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
John Burnett Offline
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Cape Cod
You'll have to look at California law for that one. Some states haven't yet made the switch.
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#1890392 - 01/24/14 10:22 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Red Raiders Offline
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Compliance Land
I just noticed that when making the HOEPA APR test determination, the APR isn't the APR on the TIL. It is the interest rate from the date the interest rate was set. Yet this is referred to in the regulation as the APR but acknowledges that it is a different APR than what is on the TIL. ??????

I got this from 1026.32(a)(3)

Am I missing something? Why wouldn't they have kept the APR as the real APR instead of changing the definition for this section only????
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#1890395 - 01/24/14 10:27 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,912
Galveston, TX
You need to read that section again.

(i) Would be one and the same
(ii) Might be different if you are using a discounted or promotional rate lower than the fully indexed rate.
(iii) The maximum rate possible if the variable rate is not based on an index
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#1890400 - 01/24/14 10:32 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
dblack Offline
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Joined: Feb 2008
Posts: 263
AL
You use the interest rate as of the date the rate is set to determine your APR. For fixed rate loans this should result in the same APR as disclosed on the TIL.

Where it will differ is for ARMs. You use the fully indexed rate (if the index is not within your control) as the base to determine the APR in that instance. Here is some commentary from the preamble on the additional calculation required for ARMs.

Second, notwithstanding industrys complaints about the burdens of performing an
additional calculation, the Bureau implements in the final rule the statutory requirement to
calculate APRs for high-cost mortgage coverage pursuant to the requirements set forth in TILA
section 103(bb)(1)(B)(ii) and (iii), rather than in accordance with the rules for composite APRs
for disclosure purposes under 1026.17. The Bureau acknowledges that the final rule may
require creditors to conduct an additional calculation to determine high-cost mortgage coverage
for variable-rate transactions. However, the Bureau believes that Congress made a deliberate
decision to depart from the general APR calculation, to ensure that introductory rates not be
given undue weight in determining whether a transaction is a high-cost mortgage. Despite the
additional burden associated with a different calculation, the Bureau does not believe that
avoidance of an additional calculation is a sufficient basis to use its exception authority to depart
from the clear intent of the statute
Last edited by dblack; 01/24/14 10:34 PM.
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#1890401 - 01/24/14 10:33 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Red Raiders Offline
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Compliance Land
So it's not saying that the APR is the interest rate for (i). It is saying use that interest rate to determine what the APR is (accounting for PPFC's and what-not), right?
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#1890403 - 01/24/14 10:36 PM Re: Confusion - High Cost - HOEPA & High priced Squeakers
Red Raiders Offline
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Red Raiders
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Compliance Land
dblack I posted the same time as you but I have it now and it makes sense. I was re-reading this section and focused on the wrong part.

My head is spinning more than that girl from The Exorcist!!
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