What do other banks do if the index used to base rates changes during the underwriting process? Our index dropped putting a loan into HPML which we can't do because we do not escrow. We lowered the rate enough to get under HPML status.

How does a drop in the index rate make a loan an HPML?

The rate initially disclosed put us into HPML territory when the index rate dropped.

Oh - you mean the APOR dropped?

Sorry, wrong terminology but yes.

If it is your policy to not originate HPMLs then not sure what else you can other than reduce the rate or fees to keep the APR below the threshold.