When calculating the points and fees for purposes of HOEPA coverage, should the lender base the calculation off the threshold amounts in effect as of the application date or the lock date? I'm thinking specifically of a case where the application date is in one year, but the lock date is established in the next year.

High-cost mortgages include closed- and open-end consumer credit transactions 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 by the specified amount.

I understand the rate test, but I'm uncertain about the points and fees test. Are you saying that a lender should use the rate set date for the points and fees threshold as well?

I am confused - what does the points and fees test have to do with either the application or rate set date?

Sorry. I'll try to be clearer. Let's say the lender takes a loan application in one year, but it will not close until the next year. This is a small dollar loan. To determine whether the loan is a HOEPA loan as it relates to the limits on points and fees, should the lender use the threshold amounts that were in effect as of the date of application?

3. Applicable threshold. For purposes of § 1026.32(a)(1)(ii), a creditor must determine the applicable points and fees threshold based on the face amount of the note (or, in the case of an open-end credit plan, the credit limit for the plan when the account is opened).

Date of closing, as you are not going to know the note amount before that..