From the 8/15 Federal Register publication, we would utilize the annually-increased thresholds as of the 1/1/2015 effective date... but I'm not sure if that means applications accepted after that date (as we did with the 1/1/2014 implementation) or if it's a static date and any HOEPA tests done in 2015 would fall under the new thresholds.

I would assume the same applies to the QM threshold changes?

bump

It may be a really dumb question, but if anyone would be able to contribute as to how they are implementing this change I would greatly appreciate it.

My understanding is that with all of the Reg Z changes in the past, we just go in and update the value in the field so that the first time it's utilized in the new year the new amount will be applied/relied upon.

But since the January changes specifically said that HOEPA points and fees were effective with applications dated after the 1/10 effective date, I wanted to make sure we applied this first annual increase correctly.

I have always applied the adjustments to applications received on or after their effective dates.

I spoke with CFPB, based on their informal guidance I learned that they are applying the 'at or before consummation' language to indicate that in order to be accurate you would need to utilize the points and fees threshold in effect as of the date of final action/consummation.

This shouldn't be a major issue because when you receive an application in late December and run your HOEPA/QM points and fees tests in 2104, if it is under the threshold it will continue to be under the 2015 threshold (as it has increased).

But I can envision a situation where the loan narrowly exceeds the 2014 allowable points and fees (initially designated as a high-cost/non-QM loan in 2014) but upon further review in 2015 would actually pass under the increased threshold.

Obviously any application received after 1/1/2015 will be clean-cut, but my recommendation to staff will be that they re-run the points and fees test on loans closing in early 2015 with an application dated the prior year. This will become more of an issue with the proposed HMDA changes!