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#2240570 - 08/03/20 10:08 PM HPML - a bit confused
SmallBank3 Offline
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Joined: Nov 2019
Posts: 57
I am looking for information on doing a HPML for a jumbo. We have never done one in the past and this will most likely be a one-off. It will be north of 950M so it is solid in the jumbo category. The information I found on ConsumerFinance.gov indicates a jumbo is considered HPML once it is 2.5% or more over APOR. Yet in reading our state bankers association real estate lending manual, it does not reference any difference between jumbo or standard and shows 1.5% or more for first lien and 3.5% or more for subordinate liens. Those of you who write jumbo HPMLs, what has been your practice? Also, what is the maximum you generally cap your percentage at? I do not want to give free rein for this to be abusive. Is there a percentage cap for the fees that is specific to jumbos? Again, we have never done one of these and I'm struggling to find concise information on the requirements we need to be mindful of - I really appreciate any help you all may have!

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Lending Compliance
#2240572 - 08/03/20 11:26 PM Re: HPML - a bit confused SmallBank3
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,675
Galveston, TX
See 1026.35(a)(1)(ii)


1026.35(a) Definitions. For purposes of this section:

(1) "Higher-priced mortgage loan" means a closed-end consumer credit transaction secured by the consumer's principal dwelling with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction as of the date the interest rate is set:

(i) By 1.5 or more percentage points for loans secured by a first lien with a principal obligation at consummation that does not exceed the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac;

(ii) By 2.5 or more percentage points for loans secured by a first lien with a principal obligation at consummation that exceeds the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac; or

(iii) By 3.5 or more percentage points for loans secured by a subordinate lien.
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