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#2244941 - 11/02/20 04:35 PM Date as Basis for Points and Fees Test - HOEPA
Annie Offline
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Joined: Sep 2018
Posts: 27
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.

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HOEPA and Homeowner Counseling Rule
#2244944 - 11/02/20 04:44 PM Re: Date as Basis for Points and Fees Test - HOEPA Annie
rlcarey Offline
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rlcarey
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Posts: 77,310
Galveston, TX
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.
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#2244945 - 11/02/20 04:46 PM Re: Date as Basis for Points and Fees Test - HOEPA Annie
Annie Offline
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Joined: Sep 2018
Posts: 27
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?

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#2244946 - 11/02/20 04:49 PM Re: Date as Basis for Points and Fees Test - HOEPA Annie
rlcarey Offline
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rlcarey
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Posts: 77,310
Galveston, TX
I am confused - what does the points and fees test have to do with either the application or rate set date?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2244947 - 11/02/20 04:54 PM Re: Date as Basis for Points and Fees Test - HOEPA Annie
Annie Offline
Junior Member
Joined: Sep 2018
Posts: 27
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?

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#2244949 - 11/02/20 05:08 PM Re: Date as Basis for Points and Fees Test - HOEPA Annie
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,310
Galveston, TX
3. Applicable threshold. For purposes of ยง 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..
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