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#2142622 - 08/18/17 11:25 AM Home Improvement - 9 months- HPML ESCROW-
Gr8Hoppers Offline
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Registered: 07/22/08
Posts: 83
Loc: Central Missouri
[b][/b]We have a request for a 9 month Home improvement loan secured by a first lien. The home is a second home for the customer. She will occupy more than 14 days per year. The loan is HPML- are we required to escrow on it? Does this loan qualify for temporary or is it only bridge and construction loans.


Edited by Gr8Hoppers (08/18/17 11:27 AM)
Edit Reason: more details
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Escrows on Higher-Priced Mortgages
#2142695 - 08/18/17 02:01 PM Re: Home Improvement - 9 months- HPML ESCROW- [Re: Gr8Hoppers]
Dan Persfull Offline
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Registered: 08/28/02
Posts: 44538
Loc: Bloomington, IN
HPML escrow requirements only apply to the consumer's primary residence.
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#2149970 - 10/16/17 03:38 PM Re: Home Improvement - 9 months- HPML ESCROW- [Re: Dan Persfull]
JPC Offline
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Registered: 10/22/15
Posts: 734
Let's say the same situation, except that it IS the principal dwelling of the consumer. Would such a loan be subject to the appraisal and escrow requirements, or is this considered a "temporary" loan? Based on the Official Commentary, it seems that a temporary loan really refers to a "bridge" loan to buy another property. At least the Appraisal exemption part specifies that more clearly. Is it exempt from the Escrow requirement, but not the Appraisal requirements, or would both apply because the exemption does not apply? Does it make a difference if they intend to refinance at the end of the short-term?

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#2150028 - 10/17/17 07:05 AM Re: Home Improvement - 9 months- HPML ESCROW- [Re: Gr8Hoppers]
rlcarey Offline
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Registered: 07/16/01
Posts: 65058
Loc: Galveston, TX
Any loan of 12 months or less are exempt from escrows.
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#2150056 - 10/17/17 09:56 AM Re: Home Improvement - 9 months- HPML ESCROW- [Re: Gr8Hoppers]
JPC Offline
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Registered: 10/22/15
Posts: 734
So, is your take that such loans are exempt from the Escrow piece, but not the additional appraisal requirements piece, i.e. 1026.35(c)(3) - (c)(6)?

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#2150169 - 10/17/17 04:09 PM Re: Home Improvement - 9 months- HPML ESCROW- [Re: Gr8Hoppers]
JPC Offline
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Registered: 10/22/15
Posts: 734
That makes sense that the Escrow provisions would not apply - what use would it be on a less than 12 month period?

It seems like the additional Appraisal requirements are applicable though.

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