Looking for validation that I am on the "right track."

HELOC - Introductory Fixed Rate for 12 Months - 2.99%

Rate after "intro" is Prime - plus .50 margin.

Rate to use for APOR calculation is: 2.99%

For what purpose?

We complete a HOEPA worksheet for every HELOC we originate - We calculate the APOR.

**Not HMDA.

For Section 32, it would be the higher of the introductory rate or the current index plus margin, unless the interest rate can change based on something beside a change in the index rate.

*unless the interest rate can change based on something beside a change in the index rate"

We have a FLOOR rate of 4.25% (which is currently higher than the Intro Rate OR Prime plus margin) and a CAP rate of 18% - is that applicable for calculating the APOR for HOEPA?

Yes, that is a problem. That means you fall under 1026.32(a)(3)(iii)

(iii) For a transaction in which the interest rate may or will vary during the term of the loan or credit plan, other than a transaction described in paragraph (a)(3)(ii) of this section, the maximum interest rate that may be imposed during the term of the loan or credit plan.

Your APR is 18%.

We used to use the HMDA rate spread calculator through the FFIEC to check the rate spreads for HPML and HOEPA (high cost) but that is all integrated into our loan operating software now. And I know it says HMDA but it's the same APOR to check for HPML and HOEPA (we are not a HMDA bank). The APOR is not something we've even contemplated calculating ourselves.

https://ffiec.cfpb.gov/tools/rate-spread/methodology

https://www.ffiec.gov/ratespread/newcalchelp.aspx#7

Sarah - I think they were asking about what APR to use - not which APOR to use. You cannot calculate the APOR - only the Fed's have the data.

*The state usury rate for loans falling under the UCCC is 18%.

**I assume we need to lower the CAP to avoid a Section 32 loan.

Oh, my bad. I was thinking we had an over achiever on our hands!