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#1993796 - 02/05/15 05:01 PM Small creditor QM & HPML & Escrow
Compliance Woes Offline
Junior Member
Compliance Woes
Joined: Jul 2003
Posts: 48
1026.43(b)(4) states that a small creditor QM is higher-priced if the APR exceeds the APOR by 3.5 percentage points or more, for both first and junior liens. I assume that doesn't apply to the requirement for escrow though, correct? You still must use 1.5 percentage points for first-liens to determine if the loan is HPML and therefore escrow is required for the first 5 years.?
My opinions are not necessarily the opinions of my employer.

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Escrows on Higher-Priced Mortgages
#1993857 - 02/05/15 06:29 PM Re: Small creditor QM & HPML & Escrow Compliance Woes
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
There is a definitional difference between "higher-priced covered transaction" under 1026.43 and "higher-priced mortgage loans" under 1026.35. The APOR spreads are independent of one another. So the 1.5 percentage point spread will determine whether you've got an HPML for first-lien loans that aren't jumbo loans.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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