Skip to content
BOL Conferences
Learn More - Click Here!

Thread Options
#2167475 - 03/09/18 07:50 PM NYS Subprime Test
Soccer Offline
Diamond Poster
Joined: Jan 2010
Posts: 1,028
Utopia

Our adjustable rate mortgages when we test are now coming up subprime. We are thinking the 1 year treasury is what is driving this however we want to be sure that we did not miss anything.
Is anyone else experiencing this?
_________________________
Everything happens for a reason

Return to Top
#2167518 - 03/09/18 09:47 PM Re: NYS Subprime Test Soccer
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,583
Galveston, TX
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2167586 - 03/12/18 11:40 AM Re: NYS Subprime Test Soccer
Soccer Offline
Diamond Poster
Joined: Jan 2010
Posts: 1,028
Utopia
Randy:
We are aware of the links that you supplied.
Maybe I should clarify.
Our rate is a discount rate, so for the loan in question, the NYS subprime test allows a rate of 5.37 and our APR is calculating at 5.56

Index 2.06 + margin 2.875=4.935
_________________________
Everything happens for a reason

Return to Top
#2167589 - 03/12/18 01:05 PM Re: NYS Subprime Test Soccer
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,583
Galveston, TX
You have to calculate the APR the same way as you calculate the APR for Section 32 testing. This is not the APR that appears on the closing disclosure for a discounted variable rate loan.

1026.32(a)(3) Determination of annual percentage rate. For purposes of paragraph (a)(1)(i) of this section, a creditor shall determine the annual percentage rate for a closed- or open-end credit transaction based on the following:

(ii) For a transaction in which the interest rate may vary during the term of the loan or credit plan in accordance with an index, the interest rate that results from adding the maximum margin permitted at any time during the term of the loan or credit plan to the value of the index rate in effect as of the date the interest rate for the transaction is set, or the introductory interest rate, whichever is greater;
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top